Paper No. 1
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`APPLE INC.
`Petitioner
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.
`Patent Owner
`
`
`
`CBM2015-00160
`
`
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`U.S. PATENT NO. 7,774,280 UNDER 35 U.S.C. § 321 AND § 18 OF THE
`LEAHY-SMITH AMERICA INVENTS ACT
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`

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`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`INTRODUCTION ........................................................................................... 1
`
`OVERVIEW OF THE '280 PATENT AND PETITIONER’S
`CHALLENGE ................................................................................................. 1
`
`III. MANDATORY NOTICES ............................................................................. 6
`
`IV. GROUNDS FOR STANDING (37 C.F.R. § 42.304(a)) ................................. 9
`
`A.
`
`The ’280 Patent is Directed to a Covered Business Method............... 10
`
`1.
`
`2.
`
`The ’280 Patent claims methods and systems used in
`financial services ....................................................................... 10
`
`The ’280 Patent is not directed to a technological
`invention .................................................................................... 16
`
`i.
`
`ii.
`
`The claimed subject matter as a whole does not
`recite a technological feature that is novel and
`unobvious over the prior art ............................................ 17
`
`The claimed subject matter does not solve a
`technical problem using a technical solution ................. 21
`
`V.
`
`CLAIMS FOR REVIEW ............................................................................... 26
`
`VI.
`
`IDENTIFICATION OF THE CHALLENGE ............................................... 26
`
`VII. CLAIM CONSTRUCTION .......................................................................... 26
`
`A. Meta-right ............................................................................................ 28
`
`B.
`
`C.
`
`D.
`
`E.
`
`Right(s) ................................................................................................ 31
`
`License ................................................................................................. 32
`
`State variable ....................................................................................... 33
`
`Repository ........................................................................................... 34
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`VIII. FULL STATEMENT OF THE REASONS FOR RELIEF
`REQUESTED ................................................................................................ 37
`
`Page
`
`A.
`
`The § 101 Grounds .............................................................................. 37
`
`1.
`
`[Ground 1] Claims 1, 5, 11, 12 and 22 of the ’280 Patent
`are Invalid Under 35 U.S.C. § 101 as Being Directed to
`Non-Statutory Subject Matter ................................................... 37
`
`i.
`
`ii.
`
`iii.
`
`Patent-eligibility framework ........................................... 38
`
`The ’280 Patent claims are directed to an
`unpatentable abstract idea ............................................... 40
`
`The ’280 Patent’s claims add nothing to the
`abstract idea except use of known and general
`purpose computers .......................................................... 47
`
`iv. No further meaningful method or system elements
`beyond the abstract idea are claimed .............................. 53
`
`B.
`
`[Ground 2] Claims 1, 5, 11, 12 and 22 Are Invalid Under 35
`U.S.C. § 102 In View of the ’012 Patent ............................................ 57
`
`1.
`
`2.
`
`3.
`
`The ’012 Patent is Prior Art to the ’280 Patent Under 35
`U.S.C. § 102(a) and (b) ............................................................. 57
`
`The Teaching of the ’012 Patent ............................................... 57
`
`Every element of the challenged claims of the ’280
`Patent is anticipated or rendered obvious by the ’012
`Patent ......................................................................................... 62
`
`C.
`
`[Ground 2] Element-By-Element Anticipation Analysis .................... 63
`
`1.
`
`2.
`
`Claim 1, Preamble, “A computer-implemented method
`for transferring rights adapted to be associated with items
`from a rights supplier to a rights consumer, the method
`comprising:” .............................................................................. 63
`
`Claim 1, Element A, “obtaining a set of rights associated
`with an item, the set of rights including a meta-right
`specifying a right that can be created when the meta-right
`
`
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`Page
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`is exercised, wherein the meta-right is provided in digital
`form and is enforceable by a repository;” ................................. 64
`
`Claim 1, Element B, “determining, by a repository,
`whether the rights consumer is entitled to the right
`specified by the meta- right;” .................................................... 66
`
`Claim 1, Element C, “and exercising the meta-right to
`create the right specified by the meta-right if the rights
`consumer is entitled to the right specified by the meta-
`right, wherein the created right includes at least one state
`variable based on the set of rights and used for
`determining a state of the created right.”: ................................. 69
`
`Claim 5, “The method of claim 1, wherein the state
`variable is updated upon exercise of a right associated
`with the state variable.” ............................................................. 70
`
`Claim 11, “The method of claim 1, further comprising
`generating a license including the created right, if the
`rights consumer is entitled to the right specified by the
`meta-right.” ............................................................................... 71
`
`Claim 12, Preamble, “A system for transferring rights
`adapted to be associated with items from a rights supplier
`to a rights consumer, the system comprising:” ......................... 72
`
`Claim 12, Element A, “means for obtaining a set of rights
`associated with an item, the set of rights including a
`meta-right specifying a right that can be created when the
`meta-right is exercised, wherein the meta-right is
`provided in digital form and is enforceable by a
`repository;” ................................................................................ 72
`
`Claim 12, Element B, “means for determining whether
`the rights consumer is entitled to the right specified by
`the meta-right; and” .................................................................. 73
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`9.
`
`10. Claim 12, Element C, “means for exercising the meta-
`right to create the right specified by the meta-right if the
`rights consumer is entitled to the right specified by the
`meta-right, wherein the created right includes at least one
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`state variable based on the set of rights and used for
`determining a state of the created right.” .................................. 73
`
`11. Claim 22, “The system of claim 12, further comprising
`means for generating a license including the created
`right, if the rights consumer is entitled to the right
`specified by the meta-right.” ..................................................... 74
`
`D.
`
`[Ground 3] Claims 1, 5, 11, 12 and 22 Are Invalid Under 35
`U.S.C. § 103 in View of the ’012 Patent and the Knowledge of
`a Person of Ordinary Skill in the Art .................................................. 75
`
`IX. CONCLUSION .............................................................................................. 77
`
`iv
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`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Accenture Global Servs. v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013) (Ex. 1014, ¶ 55.) .............................................. 56
`
`Alice Corp. v. CLS Bank Int’l,
`573 U.S. .......................................................................................................passim
`
`In re Am. Acad. Of Sci. Tech. Ctr.,
`367 F.3d 1359 (Fed. Cir. 2004) .......................................................................... 27
`
`Bancorp Services, L.L.C. v. Sun Life Assurance Co. of Canada
`(U.S.), 687 F.3d 1266 (Fed. Cir. 2012) ................................................... 37, 40, 51
`
`Bilski v. Kappos,
`130 S. Ct. 3218 (2010) .................................................................................passim
`
`Cochrane v. Deener,
`94 U.S. 780 (1976) .............................................................................................. 48
`
`ContentGuard Holdings, Inc. v. Amazon.com Inc. et al.,
`No. 2:13-cv-01112-JRG (E.D. Tex.), filed ........................................................... 7
`
`ContentGuard Holdings, Inc. v. DirecTV, LLC,
`No. 2:15-cv-00128-JRG (E.D. Tex.) .................................................................... 7
`
`ContentGuard Holdings, Inc. v. Google Inc.,
`No. 2:14-cv-00061-JRG- RSP (E.D. Tex.), filed ................................................. 6
`
`CyberSource Corp. v. Retail Decisions,
`654 F.3d 1366 (Fed. Cir. 2011) .................................................................... 47, 50
`
`Dealertrack, Inc. v. Huber,
`674 F.3d 1315 (Fed. Cir. 2012) .......................................................................... 51
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ............................................................................................ 24
`
`DyStar Textilfarben GmbH & Co. v. C.H. Patrick Co.,
`464 F.3d 1356 (Fed. Cir. 2006) .......................................................................... 75
`v
`
`
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`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`Google Inc. v. ContentGuard Holdings, Inc.,
`No. 3:14-cv-00498-WHA (N.D. Cal.) .................................................................. 7
`
`Page
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) .............................................................................................. 48
`
`Graham v. John Deere Co.,
`383 U.S. 1, 148 USPQ 459 (1966) ..................................................................... 75
`
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ............................................................................................ 75
`
`In re Lund,
`376 F.2d 982 (C.C.P.A. 1967) ...................................................................... 14, 35
`
`Mayo v. Prometheus,
`132 S. Ct. 1289 (2012) .................................................................................passim
`
`Parker v. Flook,
`437 U.S. 584 (1978) ............................................................................................ 48
`
`In re Paulsen,
`30 F.3d 1475 (Fed. Cir.1994) ............................................................................. 27
`
`In re Translogic Tech., Inc.,
`504 F.3d 1249 (Fed. Cir. 2007) .......................................................................... 27
`
`In re Van Geuns,
`988 F.2d 1181 (Fed. Cir. 1993) .......................................................................... 27
`
`Statutes
`
`35 U.S.C. §101 ..................................................................................................passim
`
`35 U.S.C. § 102 ........................................................................................................ 57
`
`35 U.S.C. § 102(a) and (b) ................................................................................. 26, 57
`
`35 U.S.C. § 103 .................................................................................................. 26, 75
`
`35 U.S.C. § 321 ........................................................................................................ 79
`
`
`
`
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`vi
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`Other Authorities
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`Page
`
`37 C.F.R. § 1.57(b)(1) ........................................................................................ 14, 35
`
`37 C.F.R. § 42.6(e) ................................................................................................... 79
`
`37 C.F.R. § 42.8(b)(1) ................................................................................................ 6
`
`37 C.F.R. § 42.8(b)(2) ................................................................................................ 6
`
`37 C.F.R. § 42.8(b)(3) ................................................................................................ 8
`
`37 C.F.R. § 42.8(b)(4) ................................................................................................ 8
`
`37 C.F.R. § 42.105(a) ............................................................................................... 79
`
`37 C.F.R. § 42.300(b) .............................................................................................. 27
`
`37 C.F.R. § 42.301 ................................................................................................... 10
`
`37 C.F.R. § 42.301(a) ............................................................................................... 16
`
`37 C.F.R. § 42.301(b) .............................................................................................. 16
`
`37 C.F.R. § 42.302(a) ................................................................................................. 9
`
`37 C.F.R. § 42.302(b) ................................................................................................ 9
`
`37 C.F.R. § 42.302(c) ................................................................................................. 9
`
`37 C.F.R. § 42.304(A)................................................................................................ 9
`
`37 C.F.R. § 42.15(a) ................................................................................................. 78
`
`vii
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`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`EXHIBIT LIST
`
`Description
`
`U.S. Patent No. 7,774,280 to Nguyen et al. (“the ’280 Patent”)
`
`U.S. Patent No. 5,634,012 to Stefik et al. (“the ’012 Patent”)
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347 (June 19, 2014)
`
`Complaint, ContentGuard Holdings, Inv. V. Google Inc., Case
`No. 2:14-cv-00061-JRG-RSP (E.D. Tex.), Dkt. No. 1
`SAP America, Inc. v. Versata Dev. Group, Inc., CBM2012-00001,
`Paper 36 (Jan. 9, 2013)
`Office Patent Trial Practice Guide, 77 Fed. Reg. 157 (August 14,
`2012)
`Congressional Record – Senate, 157 Cong. Rec. S1360-1394 (daily ed.
`March 8, 2011) (Sen. Schumer)
`Volusion, Inc. v. Versata Software, Inc. et al., CBM2013-00017,
`Paper No. 8 (October 24, 2013)
`Salesforce.com, Inc. v. Virtualagility, Inc., CBM2013-00024, Paper
`No. 47 (Sept. 16, 2014)
`Google Inc. v. Inventor Holdings, LLC, CBM2014-00002, Paper No.
`16 (April 1, 2014)
`Experian Marketing Solutions, Inc. v. RPost Communications Ltd.,
`CBM2014-00010, Paper No. 20 (April 22, 2014)
`Apple Inc. v. Sightsound Techs., LLC, CBM2013-00019, Paper No. 17
`(October 8, 2013)
`Hulu, LLC v. Intertainer, Inc. Case CBM2014-00053, Paper 11 (June
`23, 2014)
`Declaration of Benjamin Goldberg, Ph.D.
`
`Bray et al., “Extensible Markup Language (XML) 1.0,” W3C
`Recommendation, February 10, 1998
`Reserved
`
`Bloomberg Inc. et al. v. Markets-Alert PTY LTD, CBM2013-00005,
`Paper No. 18 (Mar. 29, 2013)
`Definition of “Meta,” Oxford English Dictionary
`www.oxforddictionaries.com/definition/english/meta
`
`viii
`
`Apple
`Exhibit #
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`
`
`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`Apple
`Exhibit #
`1019
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`1030
`
`1031
`
`
`
`
`
`Description
`
`Definition of “Right,” Merriam-Webster Online Dictionary, available
`at http://www.merriam-webster.com/dictionary/right
`Definition of “Variable,” The Free Dictionary, available at
`http://www.thefreedictionary.com/variable+%28computer+science%29
`ZTE Corp. and ZTE (USA) Inc. v. ContentGuard Holdings,
`IPR2013-00133, Paper No. 61 (July 1, 2014)
`File History for U.S. Patent No. 7,774,280, March 29, 2010 Notice of
`Allowance
`EBay, Inc. v. Paid, Inc., CBM2014-00125, Paper No. 15 (Sept. 30,
`2014)
`File History for U.S. Patent No. 7,774,280, December 29, 2008 Non-
`Final Rejection
`File History for U.S. Patent No. 7,774,280, May 28, 2009 Applicant
`Response to Final Rejection
`Reserved
`
`Reserved
`
`Reserved
`
`Ultramercial, Inc. et al. v. Hulu, LLC et al., 2010-1544 (Fed Cir.
`November 14, 2014)
`U.S. Patent No. 5,629,980 to Stefik et al. (“the ‘980 Patent”)
`
`Complaint, ContentGuard Holdings, Inv. v. Amazon.com Inc., et al.,
`Case No. 2:13-cv-01112-JRG-RSP (E.D. Tex.), Dkt. No. 1
`
`ix
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`

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`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`I.
`
`INTRODUCTION
`
`Apple Inc. (“Apple” or “Petitioner”) petitions for Covered Business Method
`
`Patent Review (“Petition”), seeking cancellation of claims 1, 5, 11, 12 and 22 of
`
`U.S. Patent No. 7,774,280 to Nguyen et al. (“the ’280 Patent”) (See Ex. 1001),
`
`owned by ContentGuard Holdings, Inc. (“ContentGuard” or “Patent Owner”). As
`
`explained in the concurrently filed motion for joinder, this petition is substantively
`
`identical to the petition filed by Google Inc. in CBM2015-00040, which also
`
`involves the ’280 patent, and Apple seeks to be joined to that proceeding.
`
`II. OVERVIEW OF THE '280 PATENT AND PETITIONER’S
`CHALLENGE
`
`The ’280 Patent is directed generally to digital rights management (“DRM”)
`
`and specifically to the concept of transferring “usage rights” that grant one or more
`
`users access to digital content, like a movie or an eBook. (See Ex. 1001, 1:36-51;
`
`2:51-64; 12:41-46; 13:65-14:43.) The ’280 Patent describes known ways of
`
`implementing DRM over the internet, where content owners or distributors attach
`
`prescribed usage rights to digital content. (See Ex. 1001, 2:14-29.) The usage rights
`
`define one or more manners of use, i.e., how a recipient of the content may use the
`
`digital content. (See id., 2:14-16.) For example, an owner or distributor of digital
`
`content may grant the recipient of the digital content the usage rights for “viewing
`
`only.” (Id., 2:16-18; see also id., 2:9-14.) Conditions on use may also be included
`
`with the usage rights such that “usage rights can be contingent on payment or other
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`conditions.” (Id., 2:18-19.) The ’280 Patent describes known, prior art DRM
`
`concepts like “authentication, authorization, accounting, payment and financial
`
`clearing, rights specification, rights verification, rights enforcement, and document
`
`protection” that are described in U.S. Patent No. 5,634,012 (“the ’012 Patent”),
`
`which is incorporated by reference into the ’280 Patent specification. (See Ex.
`
`1001, 1:34-43; 2:9-16; Ex. 1014, ¶¶ 20, 21.)
`
`The ’280 Patent specification describes two drawbacks of the prior art. First,
`
`it says that content owners cannot control the use of content by downstream users
`
`unless the content owners remain a party to the transaction:
`
`DRM systems have facilitated distribution of digital content by
`permitting the content owner to control use of the content. However,
`known business models for creating, distributing, and using digital
`content and other items involve a plurality of parties. For example, a
`content creator may sell content to a publisher who then authorizes a
`distributor to distribute content to an on-line storefront who then sells
`content to end-users. Further, the end users may desire to share or
`further distribute the content. In such a business model, usage rights
`can be given to each party in accordance with their role in the
`distribution chain. However, the parties do not have control over
`downstream parties unless they are privy to any transaction with the
`downstream parties in some way. For example, once the publisher
`noted above provides content to the distributor, the publisher cannot
`readily control rights granted to downstream parties, such as the
`first or subsequent users unless the publisher remains a party to the
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`downstream transaction. This loss of control combined with the ever
`increasing complexity of distribution chains results in a situation
`which hinders the distribution of digital content and other items.
`
`(Ex. 1001, 2:22-42 (emphasis added).) In addition to the issue of downstream
`
`control of content, the ’280 Patent also notes that the prior art fails to provide a
`
`facility for allowing a downstream party to grant rights that are different from the
`
`rights held by the downstream party itself:
`
`Further, the publisher may want to prohibit the distributor and/or the
`storefront from viewing or printing content while allowing an end user
`receiving a license from the storefront to view and print. Accordingly,
`the concept of simply granting rights to others that are a subset of
`possessed rights is not adequate for multi-party, i.e. multi-tier,
`distribution models.
`
`(Ex. 1001, 2:42-48; Ex. 1014, ¶ 22.)
`
`The ’280 Patent purports to address these shortcomings by the claimed use
`
`of “meta-rights” and “state variables.” Meta-rights are usage rights that permit the
`
`granting of rights to others, i.e., meta-rights are rights that allow a recipient of the
`
`right to create a new usage right and send that new usage right on to another party.
`
`(Ex. 1001, 5:47-56.) State variables track dynamic state conditions. (Id., 8:3-16.)
`
`(Ex. 1014, ¶ 23.)
`
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`As an example, as shown by Figure 12 of the ’280 Patent, a creator of digital
`
`
`
`media (1201) offers usage rights to a distributor of digital media (1202 and 1203).
`
`The usage rights provided by the content creator to the distributors include meta-
`
`rights, which grant the distributor the rights to provide “play” right to users of the
`
`digital content further down the distribution chain in the form of licenses (1204,
`
`1205 and 1206). State variables track the “play” right exercised by the user (e.g.,
`
`Alice, Bob and Cathy). The “play” right is limited to 5 concurrent plays for each
`
`organization (urn:acme:club, urn:foo:club) and the play uses are tracked by the
`
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`respective state variables. (Id., 12:57-13:8.) Here, state variables are counters
`
`where a state represents the number of times the “play” right is exercised. (Id.,
`
`13:9-17; 13:54-64.) (Ex. 1014, ¶ 24.)
`
`As will be fully described by this Petition, the ’012 Patent, which is
`
`incorporated by reference into the ’280 Patent and issued more than four years
`
`before the earliest priority date of the ’280 Patent, describes every element of the
`
`challenged claims. The ’012 Patent describes usage rights in which a “Next-Set-of-
`
`Rights” may be specified. (See Ex. 1002; Fig. 15; Element 1509.) Like a meta-
`
`right, this “Next-Set-of-Rights” allows a creator of usage rights to specify a set of
`
`usage rights that the receiver of the rights may create and provide to a next party.
`
`Further, the ’012 Patent describes the use of state variables that can track changing
`
`conditions relating to a created right, such as the “Copies-in-Use” and “Copy-
`
`Count” variables, that count and limit the number of “copies” of the work that may
`
`be exercised simultaneously for the right. (Id., 10:51-54; 22:2-5.)
`
`As demonstrated by this Petition, the challenged claims of the ’280 Patent
`
`are anticipated and/or rendered obvious by the prior art ’012 Patent that is
`
`incorporated by reference into the specification of the ’280 Patent. The ’280 patent
`
`does not claim priority and has no direct relationship to the ’012 Patent.
`
`This Petition will also show that the ’280 Patent claims subject matter that is
`
`not patentable under 35 U.S.C. §101. During the prosecution of the ’280 Patent,
`
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`the examiner twice rejected the pending claims based on “101 issues.” In response
`
`to the examiner’s rejection, the Patent Owner amended the independent claims to
`
`recite use of “a repository,” “a computer-implemented method” and to recite that
`
`meta-rights are in “digital form,” to render the claims patentable under the then-
`
`dispositive “machine or transformation” test. However, the Supreme Court and
`
`Federal Circuit’s recent decisions involving Section 101 have made clear that the
`
`“machine or transformation” test applied by the ’280 Patent examiner is no longer
`
`controlling; and those decisions vitiate Patent Owner’s attempts to secure claims
`
`covering abstract ideas simply by adding language reciting generic and well-
`
`known computer processing steps and devices. For this additional reason, the
`
`challenged claims are invalid. (See generally Ex. 1003.)
`
`III. MANDATORY NOTICES
`Real Party-in-Interest: In accordance with 37 C.F.R. § 42.8(b)(1), the Real
`
`Party-in-Interest is Apple Inc. located at One Infinite Loop, Cupertino, CA 95014.
`
`Related Matters: In accordance with 37 C.F.R. § 42.8(b)(2), Petitioner
`
`identifies the following related proceedings:
`
`1) ContentGuard Holdings, Inc. v. Google Inc., No. 2:14-cv-00061-JRG-
`
`RSP (E.D. Tex.), filed February 5, 2014;
`
`
`
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`Apple CBM Petition for U.S. Patent No. 7,774,280
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`2) Google Inc. v. ContentGuard Holdings, Inc., No. 3:14-cv-00498-WHA
`
`(N.D. Cal.)1, filed January 31, 2014;
`
`3) ContentGuard Holdings, Inc. v. Amazon.com Inc. et al., No. 2:13-cv-
`
`01112-JRG (E.D. Tex.), filed December 18, 2013 (referred to hereafter as
`
`“the Litigation”);
`
`4) ContentGuard Holdings, Inc. v. DirecTV, LLC, No. 2:15-cv-00128-JRG
`
`(E.D. Tex.), severed from the Litigation on February 2, 2015 (see Dkt.
`
`No. 1);
`
`5) Google’s Petition for Covered Business Method Review for U.S. Patent
`
`No. 7,774,280 (CBM2015-00040);
`
`6) Google’s Petition for Covered Business Method Review for U.S. Patent
`
`No. 8,001,053 (CBM2015-00043);
`
`7) Apple’s Petitions for Inter-Partes Review for U.S. Patent No. 7,774,280
`
`(IPR2015-00351, 352, 353, 354);
`
`8) Apple’s Petitions for Inter-Partes Review for U.S. Patent No. 8,001,053
`
`(IPR2015-00355, 356, 357, 358);
`
`9) Pending U.S. Patent Applications related to U.S. Patent No. 7,774,280
`
`(U.S. Application No. 13/296,599);
`
`1 Google did not challenge the validity of the ’280 Patent in this declaratory
`
`judgment action.
`
`
`
`7
`
`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`10) Pending U.S. Patent Applications related to U.S. Patent No. 8,001,053
`
`(U.S. Application No. 13/162,826);
`
`11) Issued U.S. Patents related to U.S. Patent No. 7,774,280 (U.S.
`
`8,078,542); and
`
`12) ZTE’s Petitions for Inter-Partes Review of patents related to the ’012
`
`patent (IPR2013-00133, 134, 137, 138, 139, 454);
`
`13) Apple’s Petitions for Inter-Partes Review of patents related to the ’012
`
`patent (IPR2015-00440 to -00458).
`
`Designation of Lead and Back-Up Counsel: In accordance with 37 C.F.R.
`
`§ 42.8(b)(3):
`
`Lead: Jeffrey P. Kushan (Reg. No. 43,401), Sidley Austin LLP, 1501 K
`
`Street, N.W., Washington, D.C. 20005, 202-736-8914 (telephone).
`
`Backup: Michael Franzinger, (Reg. No. 46,335), Sidley Austin LLP, 1501
`
`K Street, N.W., Washington, D.C. 20005, 202-736-8583 (telephone); Thomas A.
`
`Broughan, III (Reg. No. 66,001), Sidley Austin LLP, 1501 K Street, N.W.,
`
`Washington, D.C. 20005, 202-736-8314 (telephone).
`
`Notice of Service Information: In accordance with 37 C.F.R. § 42.8(b)(4),
`
`please direct all correspondence to lead and back-up counsel at the above address.
`
`Petitioners consent to email service at iprnotices@sidley.com.
`
`
`
`8
`
`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`IV. GROUNDS FOR STANDING (37 C.F.R. § 42.304(A))
`The undersigned and Apple certify that the ’280 Patent is available for post-
`
`grant review because the ’280 Patent constitutes a covered business method patent
`
`as defined by Section 18 of the America Invents Act. See AIA § 18(a)(1)(A). The
`
`AIA defines covered business method patents as patents that relate to financial
`
`products or services and are not directed towards a technological invention. AIA
`
`§ 18(d)(1). For the reasons described below, the ’280 Patent satisfies both of these
`
`requirements.
`
`Further, Apple meets all standing requirements and maintains full eligibility
`
`to file this petition. A petitioner may not file a petition to institute a covered
`
`business method review unless the petitioner has been sued for patent
`
`infringement. 37 C.F.R. § 42.302(a). Here, ContentGuard has sued Apple for
`
`infringement of the ’280 Patent in Civ No. 2:13-cv-01112-JRG (E.D. Tex.). (See
`
`Ex. 1031.) Thus, Apple has standing to file the present petition.
`
`Also, a petitioner may not file a petition for covered business method review
`
`where the petitioner is estopped from challenging the claims. 37 C.F.R.
`
`§ 42.302(b). Apple certifies that it is not estopped from challenging the claims of
`
`the ’280 Patent on the grounds herein. Neither Petitioner, nor any party in privity
`
`with Petitioner, has filed a civil action challenging the validity of any claim of the
`
`’280 patent. 37 C.F.R. § 42.302(c).
`
`
`
`9
`
`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`A. The ’280 Patent is Directed to a Covered Business Method
`The ’280 Patent is eligible for CBM review. The ’280 Patent is directed to a
`
`covered business method because the claims are used in financial services and are
`
`not directed to a technological invention.
`
`1.
`
`The ’280 Patent claims methods and systems used in financial
`services
`
`The AIA defines a covered business method patent as 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 …” AIA § 18(d)(1); see also 37 C.F.R. § 42.301. Under covered
`
`business method review, “financial product or service” is “broadly interpreted and
`
`encompass[es] patents claiming activities that are financial in nature, incidental to
`
`a financial activity or complementary to a financial activity.” (See Ex. 1005 at 21-
`
`22 (citing Ex. 1006 at 2-3).) In this context, financial “is an adjective that simply
`
`means relating to monetary matters.” (See Ex. 1005 at 23.) The “presence of a
`
`single claim is sufficient to institute a covered business method review.” (Id. at
`
`26.) The U.S.P.T.O. noted that the AIA’s legislative history demonstrates that
`
`“financial product or service” should be “interpreted broadly,” encompassing
`
`patents claiming activities that are “financial in nature, incidental to a financial
`
`activity or complementary to a financial activity.” (See Ex. 1006 at 3.) Of
`
`particular pertinence to the ’280 Patent, Sen. Schumer, co-author of § 18, stated
`
`
`
`10
`
`

`
`Apple CBM Petition for U.S. Patent No. 7,774,280
`
`“[t]o meet this [eligibility] requirement, the patent need not recite a specific
`
`financial product or service. Rather, the patent claims must only be broad enough
`
`to cover a financial product or service.” (See Ex. 1007 at 6 (emphasis added).) In
`
`Volusion v. Versata (See Ex. 1008 at 6), the PTAB ruled that although the claims
`
`merely recited a method of representing a plurality of items in a database, the
`
`specification pointed out that the invention could be used in the field of e-
`
`commerce and were therefore eligible for Covered Business Method review. (See
`
`Ex. 1008 at 7-8; see also Ex. 1009 at 7-8 (finding that items displayed to a user
`
`may be associated with a financial service).) Thus, a claim need not map directly to
`
`a monetary or financial activity to qualify for covered business method review, but
`
`need only have claims that encompass embodiments that are financial in nature,
`
`incidental to financial activity or complementary to a financial activity. (See Ex.
`
`1010 at 8.)
`
`The claims of the ’280 Patent encompass embodiments that facilitate the use
`
`or distribution of digital content based on the payment of fees by users, thus
`
`rendering the claims, at the very least, incidental and complementary to financial
`
`activity. The ’280 Patent claims describe the purported invention using economic
`
`terms - the claimed system and method facilitate the transfer of rights between a
`
`rights “supplier” and a rights “consumer.” (