UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2015-00130
`
`Patent 8,118,221 B2
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2015-00130
`
`Patent 8,118,221 B2
`
`____________
`
`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 .................................. 9
`
`OVERVIEW OF U.S. PATENT NO. 8,118,221 ............................................ 6
`
`
`IV. THE CLAIMS OF THE ‘221 PATENT ARE STATUTORY ...................... 12
`A.
`The Two-Part Test for Statutory Subject Matter ................................ 12
`The Claims Are Statutory Under Mayo and Alice .............................. 12
`B.
`C.
`The Claims Do Not Result in Inappropriate Preemption .................... 25
`Preemption under DDR Holdings ............................................. 25
`1.
`Preemption under Mayo and Alice ............................................ 29
`2.
`3.
`Non-Infringing Alternatives Confirm of Preemption ............... 31
`4. The Challenged Claims are Distinguishable from the Claims in
`Ariosa Diagnostics .................................................................... 32
`
`
`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.................................................. 36
`
`
`VI. CLAIM 22 IS DEFINITE .............................................................................. 38
`A. Claim 22 .............................................................................................. 38
`B.
`Petitioner’s Expert is Uncrossed and Not Proven to be Reliable ........ 40
`
`
`
`
`
`- i -
`
`
`
`VII.
`
`SECTION 101 IS NOT A GROUND THAT MAY BE RAISED IN
`
`VII. SECTION 101 IS NOT A GROUND THAT MAY BE RAISED IN
`COVERED BUSINESS METHOD PATENT REVIEW ............................. 41
`
`COVERED BUSINESS METHOD PATENT REVIEW ........................... ..41
`
`VIII.
`
`THE USPTO IS ESTOPPED FROM REVISITING THE ISSUES OF
`
`
`VIII. THE USPTO IS ESTOPPED FROM REVISITING THE ISSUES OF
`WHETHER THE CLAIMS ARE DIRECTED TO STATUTORY SUBJECT
`MATTER AND ARE DEFINITE ................................................................. 43
`
`WHETHER THE CLAIMS ARE DIRECTED TO STATUTORY SUBJECT
`
`MATTER AND ARE DEFINITE ............................................................... ..43
`
`
`IX.
`
`IX.
`
`
`X.
`
`INVALIDATING PATENT CLAIMS VIA CBM REVIEW IS
`
`INVALIDATING PATENT CLAIMS VIA CBM REVIEW IS
`UNCONSTITUTIONAL ............................................................................... 44
`
`UNCONSTITUTIONAL ............................................................................. . .44
`
`THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`
`THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`FINANCIAL PRODUCT OR SERVICE ...................................................... 46
`
`FINANCIAL PRODUCT OR SERVICE .................................................... ..46
`
`
`XI. THE CHALLENGED CLAIMS OF THE ‘221 PATENT ARE
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW .... 50
`
`XI.
`
`THE CHALLENGED CLAIMS OF THE ‘221 PATENT ARE
`
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW....5O
`
`
`XII. CONCLUSION .............................................................................................. 51
`
`CONCLUSION ............................................................................................ ..51
`
`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
`
`2058
`
`
`
`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.),
`
`- iii -
`
`
`
`Exhibit Number
`
`Exhibit Description
`
`and Smartflash LLC, et al. v. Amazon, Inc., et al., Case No.
`6:14-CV-992 (E.D. Tex.) dated May 29, 2015
`
`2059-2067
`
`Reserved
`
`2068
`
`Deposition Transcript of Anthony J. Wechselberger dated
`May 28, 2015 taken in CBM2015-00015, -00016, -00017
`and -00018
`
`2069-2072
`
`Reserved
`
`2073
`
`2074
`
`2075
`
`Apple’s Preliminary Claim Constructions and Extrinsic
`Evidence filed in Smartflash LLC, et al. v. Apple Inc., et al.,
`Case No. 6:13-cv-447-MHS-KNM (E.D. Tex.)
`
`Reserved
`
`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.
`
`2076-2081
`
`Reserved
`
`2082
`
`Trial Transcript from Virnetx Inc. v. Apple Inc., Case No.
`6:10-cv-417 (E.D. Tex.) dated November 2, 2012.
`
`2083-2088
`
`Reserved
`
`2089
`
`Declaration of Emily E. Toohey in Support of Patent
`
`
`
`- iv -
`
`
`
`Exhibit Number
`
`Exhibit Description
`
`Owner’s Preliminary Response
`
`
`
`
`
`- v -
`
`
`
`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 8,118,221 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 3-
`
`10, 12-31, and 33 of U.S. Patent No. 8,118,221 (“the ‘221 Patent”). Petition, Paper
`
`2 at 1.
`
`On March 28, 2014, Apple filed two earlier petitions, in CBM2014-00102
`
`and -00103, seeking CBM review of claims 1, 2, 11-14, and 32 of the ‘221 patent
`
`on §§ 102 and 103 grounds. Claims 12, 13, and 14, at issue here, were also put at
`
`issue in the 00102/00103 petitions. The PTAB granted review of 1, 2, and 11–14
`
`on 35 U.S.C. § 103 obviousness grounds but denied review of claim 32. Apple Inc.
`
`v. Smartflash LLC, Cases CBM2014-00102 and -00103, Paper 8 at 23-25 (PTAB
`
`September 30, 2014) (hereinafter “00102/00103 Institution Decision”).
`
`On September 26, 2014, another petitioner, Samsung Electronics America,
`
`Inc. (“Samsung”), filed two petitions in CBM2014-00194 and -00199 seeking
`
`
`
`- 1 -
`
`
`
`CBM review of claims of claims 2, 11, and 32 of the ‘221 Patent on § 101 and
`
`§ 103 grounds (CBM2014-00194, Corrected Petition, Paper 4 at 1, 3) and on § 102
`
`grounds (CBM2014-00199, Corrected Petition, Paper 4 at 1, 4).
`
`On October 30, 2014 Petitioner Apple filed another petition, in CBM2015-
`
`00015, seeking review of ‘221 Patent claims 1, 2, 11, and 32 as unpatentable under
`
`§ 101. CBM2015-00015, Corrected Petition, Paper 9 at 1.
`
`On March 30, 2015 the Board instituted covered business method patent
`
`review under 35 U.S.C. § 101 as to claims 2, 11, and 32 of the ‘221 Patent
`
`(CBM2014-00194, Paper 9 at 20) and on April 10, 2015 the Board instituted
`
`covered business method patent review under 35 U.S.C. § 101 as to independent
`
`claim 1 of the ‘221 Patent (CBM2015-00015 Paper 23 at 21).
`
`On May 7, 2015, yet another Petitioner, Google Inc., filed a petition in
`
`CBM2015-00126 seeking CBM review of claim 3 of the ‘221 Patent as
`
`unpatentable under § 101. CBM2015-00126, Redacted Petition, Paper 3 at 1.
`
`In the instant petition – Apple’s fourth CBM petition, and the seventh CBM
`
`petition against the ‘221 Patent – Apple raises a 35 U.S.C. § 101 non-statutory
`
`subject matter challenge to claims 3-10, 12-31, and 33, as well as a 35 U.S.C.
`
`§ 112 indefiniteness / lack of antecedent basis challenge to claims 6, 22, and 29.
`
`Petition, Paper 2 at 1, 34.
`
`
`
`- 2 -
`
`
`
`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 3-10, 12-31, and 33 on Apple’s § 101 unpatentable subject matter
`
`grounds and claims 6, 22, and 29 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 ‘221 patent claims. 37 C.F.R. § 42.1(b).
`
`Specifically, the instant Petition seeks review of dependent claims (claims 3-10) of
`
`the ‘221 Patent on the same grounds (§ 101) for which their independent claim
`
`(claim 1) and two other dependent claims (claims 2 and 11) were already instituted
`
`by the Board in CBM2015-00015 and CBM2014-00194. Similarly, the Petition
`
`seeks review of dependent claim 33 on the same grounds (§ 101) for which its
`
`independent claim (claim 32) was instituted by the Board in CBM2014-00194.
`
`The Board should exercise its discretion and decline to institute a covered business
`
`method patent review given the § 101 CBM reviews already instituted on the ‘221
`
`Patent in CBM2015-00015 and CBM2014-00194.
`
`Claims 3-10 (like claim 1 from which they depend), claims 12-31, and 33
`
`(like claim 32 from which it depends) of the ‘221 Patent are directed to statutory
`
`
`
`- 3 -
`
`
`
`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, claim 3 of the ‘221 Patent addresses the
`
`problem of data content piracy on the Internet by providing for legitimate
`
`acquisition of content data by storing payment data on a data carrier, retrieving
`
`data content from a data content supplier, and writing the retrieved content data to
`
`the data carrier in response to payment validation data. Ex. 1001, ‘221 Patent at
`
`25:54-56, 59-61. In other words, claim 3 of the ‘221 Patent is directed to a system
`
`that combines on the data carrier both the digital content and payment data, and
`
`additional content can be legitimately obtained in response to payment validation
`
`data.
`
`As demonstrated below, evidence in CBM2015-00015 shows that the claims
`
`of the ‘221 Patent do not result in inappropriate preemption, nor is there any
`
`evidence that a disproportionate amount of future innovation is foreclosed by the
`
`claims of the ‘221 Patent.
`
`Additionally, in February 2015, Petitioner lost in Federal Court the purely
`
`legal issue of whether claims 2, 11 and 32 of the ‘221 Patent 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
`
`
`
`- 4 -
`
`
`
`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. Claims 2
`
`and 11, which like claims 3-10 put at issue here depend from claim 1, were found
`
`to be statutory in District Court. Claim 33, put at issue here, depends from claim
`
`32, which was found to be statutory in District Court.
`
`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
`
`questions of whether the challenged claims comport with 35 U.S.C. § 101 and 35
`
`U.S.C. § 112 ¶ 2 during the prosecution of the ‘221 patent. The USPTO is
`
`
`
`- 5 -
`
`
`
`estopped from re-litigating these purely legal issues 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. 8,118,221
`
`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 ‘221 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.” ‘221 Patent at 1:20-28.
`
`Preferred embodiments described in the ‘221 Patent at 15:53-62 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
`
`
`
`- 6 -
`
`
`
`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. ‘221 Patent at 16:5-17.
`
`Referring to preferred embodiments, the ‘221 Patent discloses that a data
`
`supply system may provide users with a seamless purchase and content delivery
`
`experience. ‘221 Patent at 23:61-66. 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, ‘221 Patent at
`
`13:60-67. 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, ‘221 Patent at
`
`4:64-5:8. 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, ‘221 Patent at 8:3-6. 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,
`
`‘221 Patent at 8:6-9.
`
`
`
`- 7 -
`
`
`
`The ‘221 Patent at 24:14-16 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.” The ‘221 Patent at 9:20-22 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.” The ‘221 Patent at 4:64-5:8 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 ‘221 Patent at 9:33-35, “use status data [is retrieved] from
`
`the data carrier [to] indicat[e] past use of the stored data.” Thus, as described in
`
`‘221 Patent at 5:29-33, “[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 the digital content and payment data, access control to the digital
`
`content can be continuously enforced prior to access to the digital content and
`
`additional content can be purchased. By comparison, unlike a system as claimed,
`
`
`
`- 8 -
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`
`
`when a DVD was physically rented for a rental period there was no mechanism
`
`associated with the DVD to purchase additional content.
`
`
`
`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 3-10, 12-
`
`31, and 33 of the ‘221 Patent as being directed to ineligible subject matter under 35
`
`U.S.C. § 101 and claims 6, 22, and 29 as being indefinite under 35 U.S.C. § 112.
`
`This is Apple’s fourth covered business review petition filed against the ‘221
`
`Patent. Apple filed CBM2014-00102 and 103 on March 28, 2014 and CBM2015-
`
`00015 on October 30, 2014. CBM2015-00015 also raises challenges to the ‘221
`
`Patent under § 101, including against independent claims 1 and 32 whose
`
`dependent claims 3-10 and 33 are challenged in the instant petition. 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. The Petition
`
`is repetitive, untimely, and results in expensive and inefficient piecemeal
`
`proceedings. Instituting covered business method review here will not secure the
`
`just, speedy, and inexpensive resolution of Apple’s challenges to the ‘221 Patent.
`
`
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`- 9 -
`
`
`
`“[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 ‘221 Patent. CBM2015-
`
`00015 also challenges the ‘221 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 3-10, 12-31,
`
`and 33 when it filed CBM2015-00015 on October 30, 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.
`
`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
`
`
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`- 10 -
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`
`
`explanation for why this purely legal issue, based solely on claim language that
`
`was available to Apple when it filed CBM2015-00015, 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 ‘221 Patent petitions,
`
`including CBM2015-00015.
`
` 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 October 30, 2014 CBM2015-00015 petition, 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 ‘221 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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`
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`- 11 -
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`
`
`IV. THE CLAIMS OF THE ‘221 PATENT 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 ‘221 Patent, from non-statutory
`
`claims. In DDR Holdings, the Federal Circuit analyzed claims, like the ‘221 Patent
`
`claims 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
`
`
`
`- 12 -
`
`
`
`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. The claims of the ‘221 Patent are not directed to
`
`mental processes or processes performed using pen and paper, rather the claims are
`
`directed to particular devices that can download and store digital content into a
`
`data carrier. By using a system that combines on the data carrier both the digital
`
`content and payment data that can be forwarded to a payment validation system,
`
`
`
`- 13 -
`
`
`
`and by responding to payment validation data when obtaining digital content, the
`
`claimed data access terminals enable digital content to be obtained effectively and
`
`legitimately.
`
`Thus, the claims 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.” Id. 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.
`
`Report and Recommendation at 19, lines 7-12 (quoting DDR Holdings, 773 F.3d at
`
`1257) (internal citation omitted).
`
`
`
`
`
`
`
`
`
`1.
`
`Claim 1
`
`Independent claim 1 of the ‘221 Patent meets the requisites of § 101 under
`
`DDR Holdings. Challenged claims 3-10 depend from claim 1, and if claim 1 is
`
`statutory, then so too are challenged claims 3-10. Claim 1 recites a data access
`
`
`
`- 14 -
`
`
`
`terminal (a system) that parallels the structure of the statutory claim 19 in DDR
`
`Holdings. The table below sets forth a mapping of claim 1 of the ‘221 Patent to
`
`claim 19 of the patent in DDR Holdings and shows that claim 1 is directed to
`
`statutory subject matter.
`
`Claim element from DDR Holding
`
`Similar claim element from claim 1
`
`19. A system useful in an outsource
`
`“1. 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
`
`plurality of first web pages; (i) wherein
`
`implementable by a processor;”
`
`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
`
`
`
`- 15 -
`
`
`
`Claim element from DDR Holding
`
`Similar claim element from claim 1
`
`associated with a buying opportunity of
`
`a selected one of a plurality of
`
`merchants; and (iii) …
`
`(b) a computer server at the outsource
`
`“…and a processor, coupled to the first
`
`provider, which computer server is
`
`interface, to the data carrier interface
`
`coupled to the computer store and
`
`and to the program store for
`
`programmed to:
`
`implementing the stored code, the code
`
`comprising:”
`
`(i) receive from the web browser of a
`
`“code to read payment data from the
`
`computer user a signal indicating
`
`data carrier and to forward the payment
`
`activation of one of the links displayed
`
`data to a payment validation system;”
`
`by one of the first web pages;
`
`
`
`(ii) automatically identify as the source
`
`“code to receive payment validation
`
`page the one of the first web pages on
`
`data from the payment validation
`
`which the link has been activated;
`
`system;”
`
`(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…”
`
`page; and
`
`
`
`- 16 -
`
`
`
`Claim element from DDR Holding
`
`Similar claim element from claim 1
`
`(iv) using the data retrieved,
`
`“code responsive to the payment
`
`automatically generate and transmit to
`
`validation data to… to write the
`
`the web browser a second web page that
`
`retrieved data into the data carrier”
`
`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.
`
`
`
`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).
`
`
`
`- 17 -
`
`
`
`
`
`
`
`
`
`
`
`1.
`
`Claim 17
`
`Independent claim 17 of the ‘221 Patent meets the requisites of § 101 under
`
`DDR Holdings. Challenged claims 18-23 depend from claim 17, and if claim 17 is
`
`statutory, then so too are challenged claims 18-23. Claim 17 recites a data access
`
`device (a system) that parallels the structure of the statutory claim 19 in DDR
`
`Holdings. The table below sets forth a mapping of claim 17 of the ‘221 Patent to
`
`claim 19 of the patent in DDR Holdings and shows that claim 17 is directed to
`
`statutory subject matter.
`
`Claim element from DDR Holding
`
`Similar claim element from claim 17
`
`19. A system useful in an outsource
`
`“A data access device for retrieving
`
`provider serving web pages offering
`
`stored data from a data carrier, the
`
`commercial opportunities, the system
`
`device comprising::”
`
`comprising:
`
`(a) a computer store containing data, for
`
`“a user interface;
`
`each of a plurality of first web pages,
`
`a data carrier interface;
`
`defining a plurality of visually
`
`a program store storing code
`
`perceptible elements, which visually
`
`implementable by a processor;”
`
`perceptible elements correspond to the
`
`plurality of first web pages; (i) wherein
`
`each of the first web pages belongs to
`
`
`
`- 18 -
`
`
`
`Claim element from DDR Holding
`
`Similar claim element from claim 17
`
`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 th
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