`Tel: 571-272-7822
`
`Paper 8
`Entered: November 23, 2015
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00129
`Patent 7,942,317 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
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`CBM2015-00129
`Patent 7,942,317 B2
`
`INTRODUCTION
`
`A. Background
`Petitioner, Google Inc. (“Google”), filed a Petition (Paper 3, “Pet.”)1
`to institute a covered business method patent review of claims 7, 12, and 17
`of U.S. Patent No. 7,942,317 B2 (Ex. 1001, “the ’317 patent”) pursuant to
`§ 18 of the Leahy-Smith America Invents Act (“AIA”).2 Patent Owner,
`Smartflash LLC (“Smartflash”), filed a Preliminary Response (Paper 7,
`“Prelim. Resp.”).
`We have jurisdiction under 35 U.S.C. § 324(a), which provides that a
`covered business method patent review may not be instituted “unless . . . it is
`more likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.”
`After considering the Petition and Preliminary Response, we
`determine that the ’317 patent is a covered business method patent. We
`further determine that Google has demonstrated that it is more likely than
`not that challenged claims 7 and 12 are unpatentable. We deny review of
`claim 17 pursuant to 35 U.S.C. § 325(d). Accordingly, we institute a
`covered business method review of claims 7 and 12 (“the challenged
`claims”), as discussed below.
`
`
`1 Google filed two versions of the Petition: Paper 2, which is sealed and
`accessible to the parties and Board only, and Paper 3, which is a public
`version of the Petition containing a small portion of redacted text. For
`purposes of this Decision, we refer only to the public version of the Petition.
`2 Pub. L. No. 112–29, 125 Stat. 284, 296–307 (2011).
`
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`B. Asserted Ground
`Google contends that claims 7, 12, and 17 are unpatentable under 35
`U.S.C. § 101, as being directed to patent-ineligible subject matter. Pet. 1.
`Google provides the declaration of Douglas Tyler, Ph.D., in support of its
`petition. Ex. 1002.
`
`C. Related Matters
`The parties indicate that the ’317 patent is the subject of the following
`district court cases: Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435
`(E.D. Tex.); Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D.
`Tex.); Smartflash LLC v. Samsung Electronics Co. Ltd., Case No. 6:13-cv-
`448 (E.D. Tex.); Smartflash LLC v. Amazon.Com, Inc., Case No. 6:14-cv-
`992 (E.D. Tex.); and Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145
`(E.D. Tex.). Pet. 10; Paper 6, 4–5.
`Apple Inc. previously filed four petitions requesting covered business
`method patent review of the ’317 patent: CBM2014-00112, CBM2014-
`00113 (consolidated with CBM2014-00112), CBM2015-00018, and
`CBM2015-00124. Pet. 10–11. A final written decision has issued in
`CBM2014-00112, determining claims 1, 6–8, 12, 13, 16, and 18 of the ’317
`patent are unpatentable pursuant to 35 U.S.C. § 103. Apple Inc. v.
`Smartflash LLC, Case CBM2014-00112, slip op. at 29 (PTAB Sept. 25,
`2015) (Paper 48). Trial was instituted in CBM2015-00018 with respect to
`claim 18 under 35 U.S.C. § 101. Apple Inc. v. Smartflash LLC, Case
`CBM2015-00018, slip op. at 13 (PTAB Apr. 10, 2015) (Paper 15). Lastly,
`trial was instituted in CBM2015-00124 with respect to claims 2–5, 9–11, 14,
`15, 17, and 19 under 35 U.S.C. § 101. Apple Inc. v. Smartflash LLC, Case
`CBM2015-00124, slip op. at 25 (PTAB Nov. 10, 2015) (Paper 7).
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`Google and other Petitioners have filed additional petitions requesting
`covered business method patent reviews of related patents. See Paper 6, 2–
`4.
`
`D. The ’317 Patent
`The ’317 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored,” and the “corresponding methods and computer programs.”
`Ex. 1001, 1:18–23. Owners of proprietary data, especially audio recordings,
`have an urgent need to address the prevalence of “data pirates,” who make
`proprietary data available over the internet without authorization. Id. at
`1:38–51. The ’317 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:55–2:3. This combination allows data owners to make their data
`available over the internet without fear of data pirates. Id. at 2:3–11.
`As described, the portable data storage device is connected to a
`terminal for internet access. Id. at 1:55–63. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from a data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 1:64–67.
`The ’317 patent makes clear that the actual implementation of these
`components is not critical and the alleged invention may be implemented in
`many ways. See, e.g., id. at 25:49–52 (“The skilled person will understand
`that many variants to the system are possible and the invention is not limited
`to the described embodiments.”).
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`E. Challenged Claims
`Google challenges claims 7, 12, and 17 of the ’317 patent. Claim 7
`depends from claim 1. Claims 12 and 17 are independent. Claim 12 is
`illustrative of the claimed subject matter and is reproduced below:
`12. A data access system comprising:
`a data supply computer system for forwarding data from
`a data provider to a data access terminal;
`an electronic payment system for confirming an
`electronic payment;
`a data access terminal for communicating with the data
`supply system to write data from the data supply system
`onto a data carrier; and
`a data carrier for storing data from the data supply system
`and payment data;
`wherein data is forwarded from the data provider to the
`data carrier on validation of payment data provided from
`the data carrier to the electronic payment system.
`
`ANALYSIS
`
`A. Claim Construction
`In a covered business method patent review, claim terms are given
`their broadest reasonable interpretation in light of the specification in which
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`of the ’317 patent according to their ordinary and customary meaning in the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this decision, we
`determine that “payment data” is the only term requiring an express
`construction in order to conduct properly our analysis.
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`Google asserts that “the Board should construe ‘payment data’ to
`mean: ‘any information that can be used in connection with the process of
`making a payment for content.’” Pet. 15 (citing Ex. 1002 ¶¶ 37–39).
`The plain and ordinary meaning of the two words that make up the
`term—“payment” and “data”—do not incorporate any notion of time and
`nothing about their combination changes that determination. As used in the
`’317 patent, “payment data” encompasses data relating to future, current,
`and past payments. For example, the ’317 patent states that “payment data
`for making a payment to the system owner is received from the smart Flash
`card by the content access terminal and forwarded to an e-payment system.”
`Ex. 1001, 20:59–62. This language indicates that payment data exists prior
`to the payment being made for the requested content. The ’317 patent also
`explains that “payment data received may either be data relating to an actual
`payment made to the data supplier, or it may be a record of a payment made
`to an e-payment system.” Id. at 6:57–60. This indicates that “payment data”
`includes data for payments that have already been made.
`Moreover, the plain and ordinary meaning of data does not implicate
`changes in character based on when it is used in a transaction. For example,
`a credit card number may qualify as “data relating to payment” before the
`number is processed, while the number is being processed, and after the
`number is processed. Thus, without an express description to the contrary,
`we presume that “payment data” retains the same meaning before, during,
`and after the payment operation. Neither party points to any such contrary
`description. In fact, the ’317 patent describes “payment data” in several
`instances as data relating to payment for the requested data item. Id. at
`10:5–6, 10:27–28, 10:38–39.
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`For purposes of this Decision, we determine that the broadest
`reasonable interpretation of “payment data” as used in the ’317 patent is
`“data relating to payment for the requested data item.”
`
`B. Covered Business Method Patent
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. A “covered
`business method patent” is a patent that “claims a method or corresponding
`apparatus for performing data processing or other operations used in the
`practice, administration, or management of a financial product or service,
`except that the term does not include patents for technological inventions.”
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
`claim directed to a covered business method to be eligible for review. See
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule,
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`We previously have determined that the ’317 patent is a “covered
`business method patent.” See, e.g., CBM2014-00112, Paper 7, 8–12
`(determining that the ’317 patent is eligible for covered business method
`patent reviewed based on claim 18); CBM2015-00018, Paper 15, 5–9
`(same); and CBM2015-00124, Paper 7, 9–13 (determining that the ’317
`patent is eligible for covered business method patent reviewed based on
`claim 8). In this case, Google asserts that claim 12 also qualifies the ’317
`patent for covered business method patent review. Pet. 4.
`
`1. Financial Product or Service
`Google asserts that because “[c]laim 12 explicitly describes storing
`payment data, an electronic payment system for confirming an electronic
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`payment, and providing purchased data only once payment data provided to
`the electronic payment is validated,” it claims activities that are financial in
`nature. Pet. 6–7. Based on this record, we agree with Google that the
`subject matter recited by claim 12 is directed to activities that are financial in
`nature, namely “an electronic payment system for confirming an electronic
`payment,” “payment data,” and “wherein data is forwarded . . . on validation
`of payment data provided from the data carrier to the electronic payment
`system,” limitations which are recited in the claim. The transfer of data
`relating to payment, payment validation, and providing data in response to
`data relating to payment are financial activities, and providing for such
`transfers amounts to a financial service. This is consistent with the
`Specification of the ’317 patent, which confirms claim 12’s connection to
`financial activities by stating that the invention “relates to a portable data
`carrier for storing and paying for data.” Ex. 1001, 1:18–20. The
`Specification also states repeatedly that the disclosed invention involves
`managing access to data based on payment validation. See, e.g., id. at 1:55–
`63, 2:12–26, 3:22–30, 3:51–56, 7:59–8:6, 8:18–31.
`Smartflash disagrees that claim 123 satisfies the financial in nature
`requirement of AIA § 18(d)(1), arguing that that section should be
`interpreted narrowly to cover only technology used specifically in the
`financial or banking industry. Prelim. Resp. 35–36. Smartflash cites to
`
`
`3 Smartflash also refers to claim 18 (Prelim. Resp. 33), but Google focuses
`on claim 12 in its Petition, and states that the Board previously has
`determined that claim 18 qualifies the ’317 patent for a covered business
`method patent review (Pet. 4–10).
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`various portions of the legislative history as support for its proposed
`interpretation. Id.
`The Federal Circuit has expressly determined, however, that “the
`definition of ‘covered business method patent’ is not limited to products and
`services of only the financial industry, or to patents owned by or directly
`affecting the activities of financial institutions, such as banks and brokerage
`houses.” Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1325
`(Fed. Cir. 2015). Rather, “it covers a wide range of finance-related
`activities.” Id. Further, contrary to Smartflash’s view of the legislative
`history, the legislative history overall indicates that the phrase “financial
`product or service” is not limited to the products or services of the “financial
`services industry” and is to be interpreted broadly. CBM Rules, 77 Fed.
`Reg. at 48,735–36. For example, the “legislative history explains that the
`definition of covered business method patent was drafted to encompass
`patents ‘claiming activities that are financial in nature, incidental to a
`financial activity or complementary to a financial activity.’” Id. (citing 157
`Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`In addition, Smartflash asserts that claim 12 is not directed to an
`apparatus or method that is financial in nature because claim 12 “omit[s] the
`specifics of how payment is made.” Prelim. Resp. 38. We are not
`persuaded by this argument because § 18(d)(1) of the AIA does not include
`such a requirement, nor does Smartflash point to any other authority that
`makes such a requirement. Id. We determine that because claim 12 recites
`“payment data” and the transfer of payment data, for example, as Smartflash
`acknowledges (id.), the financial in nature requirement of § 18(d)(1) is
`satisfied.
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`For the reasons stated above, and based on the particular facts of this
`proceeding, we conclude that the ’317 patent includes at least one claim that
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`Google asserts that claim 12 does not fall within § 18(d)(1)’s
`exclusion for “technological inventions.” Pet. 7–10. In particular, Google
`argues that claim 12 “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.’” Id. at 7 (quoting 37 C.F.R.
`§ 42.301(b)).
`We are persuaded that claim 12 as a whole does not recite a
`technological feature that is novel and unobvious over the prior art. The
`’317 patent makes clear that the asserted novelty of the invention is not in
`any specific improvement of software or hardware, but in the method of
`controlling access to data. For example, the ’317 patent states that “there is
`an urgent need to find a way to address the problem of data piracy” (Ex.
`1001, 1:50–51), while acknowledging that the “physical embodiment of the
`system is not critical and a skilled person will understand that the terminals,
`data processing systems and the like can all take a variety of forms” (id. at
`12:29–32). For example, the ’317 patent provides the example of a “smart
`Flash card” for a “data carrier,” referring to “the ISO (International
`Standards Organization) series of standards, including ISO 7810, ISO 7811,
`ISO 7812, ISO 7813, ISO 7816, ISO 9992 and ISO 10102” (id. at 17:6–8,
`11–15) for further details on smart cards. Thus, we determine that claim 12
`recites merely known technological features, which indicates that it is not a
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`patent for a technological invention. See Office Patent Trial Practice Guide,
`77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).
`Smartflash also argues that claim 12 falls within § 18(d)(1)’s
`exclusion for “technological inventions” because it is directed towards
`solving the technological problem of “reading payment data from a data
`carrier and writing data from a data supplier into the same data carrier, e.g.,
`as part of a convenient, legitimate acquisition of data from a data supplier”
`with the technological solution of “a data carrier from which payment data is
`read and to which retrieved data from a data supplier is written.’” Prelim.
`Resp. 39. We are not persuaded by this argument because, as Google
`argues, the problem being solved by claim 12 is a business problem—data
`piracy. Pet. 9. For example, the Specification states that “[b]inding the data
`access and payment together allows the legitimate owners of the data to
`make the data available themselves over the internet without fear of loss of
`revenue, thus undermining the position of data pirates.” Ex. 1001, 2:7–11.
`Therefore, based on the particular facts of this proceeding, we conclude that
`claim 12 does not recite a technological invention.
`
`3. Conclusion
`In view of the foregoing, we conclude that the ’317 patent is a covered
`business method patent under AIA § 18(d)(1) and is eligible for review
`using the transitional covered business method patent program.
`
`C. Section 101 Patent-Eligible Subject Matter
`Google challenges claims 7, 12, and 17 as directed to patent-ineligible
`subject matter under 35 U.S.C. § 101. Pet. 20–39. Google argues that the
`challenged claims are directed to an abstract idea without additional
`elements that transform it into a patent-eligible application of that idea (id. at
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`22–36), triggers preemption concerns (id. at 37–38), and fails the machine-
`or-transformation test (id. at 38).
`Smartflash disagrees, arguing that the limitations of each of the
`challenged claims, taken as a combination, “recite specific ways of using
`distinct memories, data types, and use rules that amount[s] to significantly
`more than the underlying abstract idea” (Prelim. Resp. 17 (quoting Ex.
`2049, 19)), and that the claims do not result in inappropriate preemption (id.
`at 17–26). Smartflash also asserts that (1) section 101 is not a ground that
`may be raised in a covered business method patent review (id. at 27–30); (2)
`the Office is estopped from revisiting the issue of § 101, which was
`inherently reviewed during examination (id. at 30); and (3) invalidating
`patent claims via covered business method patent review is unconstitutional
`(id. at 30–32).
`1. Abstract Idea
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`2014). Here, each of the challenged claims recites a “machine,” i.e., a
`“computer system” (claims 7 and 17) or a “data access system” (claim 12).
`Section 101, however, “contains an important implicit exception to subject
`matter eligibility: Laws of nature, natural phenomena, and abstract ideas are
`not patentable.” Alice Corporation Pty. Ltd. V. CLS Bank Int’l., 134 S. Ct.
`2347, 2354 (2014) (citing Assoc. for Molecular Pathology v. Myriad
`Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal quotation marks and
`brackets omitted)). In Alice, the Supreme Court reiterated the framework set
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`forth previously in Mayo Collaborative Services v. Prometheus
`Laboratories, 132 S. Ct. 1289, 1293 (2012) “for distinguishing patents that
`claim laws of nature, natural phenomena, and abstract ideas from those that
`claim patent-eligible applications of these concepts.” Alice, 134 S. Ct. at
`2355. The first step in the analysis is to “determine whether the claims at
`issue are directed to one of those patent-ineligible concepts.” Id.
`Google argues that the challenged claims are directed to the abstract
`idea of “controlling access based on payment.” Pet. 23. Smartflash does not
`dispute that the challenged claims are directed to an abstract idea. See
`Prelim. Resp. 8–26.
`We are persuaded that the challenged claims are more likely than not
`drawn to a patent-ineligible abstract idea. As discussed above, the ’317
`patent discusses addressing recording industry concerns of data pirates
`offering unauthorized access to widely available compressed audio
`recordings. Ex. 1001, 1:27–51. The ’317 patent proposes to solve this
`problem by restricting access to data on a device based upon satisfaction of
`use rules linked to payment data. Id. at 9:4–22. The ’317 patent makes clear
`that the heart of the claimed subject matter is restricting access to stored data
`based on supplier-defined access rules and payment data. Id. at 1:55–2:11,
`Abstract. We are, thus, persuaded, on this record, that the challenged claims
`are directed to an abstract idea. See Alice, 134 S.Ct. at 2356 (holding that
`the concept of intermediated settlement at issue in Alice was an abstract
`idea); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d
`1336, 1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a
`system claim to be “generating tasks [based on] rules . . . to be completed
`upon the occurrence of an event”).
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`2. Inventive Concept
`Turning to the second step of the analysis, we look for additional
`elements that can “transform the nature of the claim” into a patent-eligible
`application of an abstract idea. Mayo, 132 S. Ct. at 1297. On this record,
`we are not persuaded that the challenged claims of the ’317 patent add an
`inventive concept sufficient to ensure that the patent in practice amounts to
`significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct.
`at 2355; see also Accenture Global Servs., 728 F.3d at 1345 (holding claims
`directed to the abstract idea of “generating tasks [based on] rules . . . to be
`completed upon the occurrence of an event” to be unpatentable even when
`applied in a computer environment and within the insurance industry).
`Smartflash argues that the challenged claims are patentable because
`they “recite specific ways of using distinct memories, data types, and use
`rules that amount[s] to significantly more than the underlying abstract idea.”
`Prelim. Resp. 17 (quoting Ex. 2049, 19). Smartflash, however, does not
`elaborate as to how these claim limitations amount to significantly more than
`the underlying abstract idea.
`The Specification, as discussed above, treats as well-known all
`potentially technical aspects of the claim, including the “content synthesis
`code,” “data access terminal,” “electronic payment system,” “data carrier,”
`“data store,” “program store,” “processor,” “code to receive” and “code
`responsive to.” For example, the Specification states that the payment
`validation system “may be part of the data supplier’s computer systems or it
`may be a separate system such as an e-payment system.” Ex. 1001, 8:18–22;
`see id. at 8:60–63. Further, with respect to the recited “data store,” the
`Specification discloses that “[t]he data storage means is based on a standard
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`smart card.” Id. at 11:28–30; see also id. at 14:25–29 (“[l]ikewise data stores
`136, 138 and 140 may comprise a single physical data store or may be
`distributed over a plurality of physical devices and may even be at
`physically remote locations from processors 128-134 and coupled to these
`processors via internet 142.”), Fig. 6. Moreover, on this record, Smartflash
`has not shown sufficiently that any of the other potentially technical
`additions to the claims performs a function that is anything other than
`“purely conventional.” Alice, 134 S. Ct. at 2359. The use of a data store and
`the linkage of existing hardware devices to existing payment validation
`processes appear to be “‘well-understood, routine, conventional activit[ies]’
`previously known to the industry.” Alice, 134 S. Ct. at 2359; Mayo, 132 S.
`Ct. at 1294.
`Smartflash also asserts that the challenged claims are like those in
`DDR Holdings, which the Federal Circuit held were directed to statutory
`subject matter because “they claim a solution ‘necessarily rooted in
`computer technology in order to overcome a problem specifically arising in
`the realm of computer networks.’” Prelim. Resp. 2 (quoting DDR Holdings,
`LLC v. Hotels.Com, LP., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). According
`to Smartflash, the challenged claims overcome the problem of “digital data
`piracy,” “‘a challenge particular to the Internet.’” Prelim. Resp. 10–11
`(quoting DDR Holdings, 773 F.3d at 1257).
`We are not persuaded that the challenged claims are like those at issue
`in DDR Holdings. In DDR Holdings, the Federal Circuit found that the
`challenged claims were directed to patentable subject matter because they
`“specif[ied] how interactions with the Internet are manipulated to yield a
`desired result—a result that overrides the routine and conventional aspects
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`of the technology.” 773 F.3d at 1258. We are not persuaded that the
`challenged claims specify interactions that depart from the routine use of the
`recited devices. Instead, we determine, based on the current record, that the
`claims merely apply conventional computer processes to restrict access to
`data based on payment.
`The differences between the challenged claims and those at issue in
`DDR Holdings are made clear by Smartflash in its tables mapping the
`challenged claims of the ’317 patent to claim 19 of the patent at issue in
`DDR Holdings. Prelim. Resp. 11–17. For example, claim 1, from which
`challenged claim 7 depends, of the ’317 patent recites “code to transmit the
`read data to the requester over the communications interface.” There is no
`language in this, or any other, limitation of claims 1 or 7, in any of the other
`challenged claims, or in the specification of the ’317 patent, that
`demonstrates that the generic computer components—“code to transmit
`. . . ,” “data,” and “communications interface”—function in an
`unconventional manner or employ sufficiently specific programming.
`Instead, the limitations, for example, like all the other limitations of the
`challenged claims, are “specified at a high level of generality,” which the
`Federal Circuit has found to be “insufficient to supply an inventive concept.”
`Ultramercial, 772 F.3d at 716.
`The limitation of claim 19 in DDR Holdings that Smartflash contends
`corresponds to the “code to transmit the read data to the requester over the
`communications interface” limitation from claim 1 of the ’317 patent, recites
`“using the data retrieved, automatically generate and transmit to the web
`browser a second web page that displays: (A) information associated with
`the commerce object associated with the link that has been activated, and (B)
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`the plurality of visually perceptible elements visually corresponding to the
`source page.” Prelim. Resp. 13–14. It was this limitation from claim 19 in
`DDR Holdings, according to the Federal Circuit, that specifies “how
`interactions with the Internet are manipulated to yield a desired result—a
`result that overrides the routine and conventional sequence of events
`ordinarily triggered by the click of a hyperlink.” 773 F.3d at 1258.
`Importantly, the Federal Circuit identified this limitation as differentiating
`the DDR Holdings claims from those held to be unpatentable in
`Ultramercial, which “broadly and generically claim ‘use of the Internet’ to
`perform an abstract business practice (with insignificant added activity).”
`Id. We are persuaded, at this point in the proceeding, that the challenged
`claims are closer to the claims at issue in Ultramercial than to those at issue
`in DDR Holdings. The claims at issue in Ultramercial, like the challenged
`claims of the ’317 patent, were also directed to a method for distributing
`media products. Similar to restricting data based on payment, as in the
`challenged claims, the Ultramercial claims restricted access based on
`viewing an advertisement. Ultramercial, 772 F.3d at 712.
`Thus, on this record, we are persuaded that Google has shown that it
`is more likely than not that the challenged claims do not add an inventive
`concept sufficient to ensure that the patent in practice amounts to
`significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct.
`at 2355; see also Accenture, 728 F.3d at 1345 (holding claims directed to the
`abstract idea of “generating tasks [based on] rules . . . to be completed upon
`the occurrence of an event” to be unpatentable even when applied in a
`computer environment and within the insurance industry).
`
`17
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`CBM2015-00129
`Patent 7,942,317 B2
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`However, because we already instituted a covered business method
`patent review of claim 17 under 35 U.S.C. § 101 in CBM2015-00124 (Paper
`7, 25), and because whether these claims are directed to patent-eligible
`subject matter is an issue of law, we exercise our discretion under 35 U.S.C.
`§ 325(d) to decline to institute a covered business method patent review of
`claim 17 under this ground in this case. We further decline to exercise our
`discretion to deny review of claims 7 and 12 under § 325(d), as requested by
`Smartflash (Prelim. Resp. 7–8), because we have not yet instituted a review
`of claims 7 and 12 under § 101. See CBM2015-00018, Paper 15, 13;
`CBM2015-00124, Paper 7, 25.
`3. Preemption
`Google argues that the challenged claims trigger preemption concerns
`because “[t]he 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 payment.” Pet. 37. Smartflash
`responds that the challenged claims do not result in inappropriate
`preemption. Prelim. Resp. 17–26. According to Smartflash, the challenged
`claims of the ’317 patent recite “specific ways of managing 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 use rules.” Id. at 20 (quoting Ex. 2049, 20). Smartflash
`also asserts that the existence of a large number of non-infringing
`alternatives shows that the claims of the ’317 patent do not raise preemption
`concerns. Id. at 22.
`Smartflash’s preemption argument does not alter our § 101 analysis.
`The Supreme Court has described the “pre-emption concern” as
`
`18
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`CBM2015-00129
`Patent 7,942,317 B2
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`“undergird[ing] our § 101 jurisprudence.” Alice, 134 S.Ct. at 2358. The
`concern “is a relative one: how much future innovation is foreclosed relative
`to the contribution of the inventor.” Mayo, 132 S. Ct. at 1303. “While
`preemption may signal patent ineligible subject matter, the absence of
`complete preemption does not demonstrate patent eligibility.” Ariosa
`Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
`Importantly, the preemption concern is addressed by the two part test
`considered above. After all, every patent “forecloses ... future invention” to
`some extent, Mayo, 132 S. Ct. at 1292, and, conversely, every claim
`limitation beyond those that recite the abstract idea limits the scope of the
`preemption. See Ariosa, 788 F.3d at 1379 (“The Supreme Court has made
`clear that the principle of preemption is the basis for the judicial exception to
`patentability. . . . For this reason, questions on preemption are inherent in
`and resolved by the § 101 analysis.”).
`The two-part test elucidated in Alice and Mayo does not require us to
`anticipate the number, feasibility, or adequacy of non-infringing alternatives
`to gauge a paten