`Tel: 571-272-7822
`
`
`
`
`
`
`Paper 8
`Entered: September 21, 2016
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`PERSONALIZED MEDIA COMMUNICATIONS LLC,
`Patent Owner.
`_______________
`
`Case IPR2016-00754
`Patent 8,559,635 B1
`_______________
`
`
`Before KARL D. EASTHOM, TRENTON A. WARD, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`WARD, Administrative Patent Judge.
`
`
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 1
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`I.INTRODUCTION
`
`A. Background
`Apple Inc. (“Petitioner”) filed a petition to institute an inter partes
`review of claims 1–4, 7, 13, 18, 20, 21, 28–30, 32 and 33 (“challenged
`claims”) of U.S. Patent No. 8,559,635 B1 (Ex. 1003, “the ’635 patent”)
`pursuant to 35 U.S.C. §§ 311–319. Paper 1 (“Pet.”). Personalized Media
`Communications LLC (“Patent Owner”) filed a preliminary response.
`Paper 7 (“Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 314(a),
`which provides that an inter partes review may not be instituted “unless . . .
`there is a reasonable likelihood that the petitioner would prevail with respect
`to at least 1 of the claims challenged in the petition.”
`Upon consideration of the Petition, Patent Owner’s Preliminary
`Response, and the associated evidence, we conclude Petitioner has
`established a reasonable likelihood it would prevail with respect to at least
`one of the challenged claims. Accordingly, for the reasons that follow, we
`institute an inter partes review.
`
`B. Additional Proceedings
`Petitioner informs us that the ’635 patent is the subject of a lawsuit:
`Personalized Media Communications, LLC v. Amazon.com, Inc., No. 2:15-
`cv-1366-JRG–RSP (E.D. Tex. filed July 30, 2015). Pet. 59. Petitioner also
`lists a number of related patents involved in district court cases and other
`related patents involved in inter partes reviews. Id. at 59.
`
`
`
`
`
`2
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 2
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`C. The ’635 Patent
`The ’635 patent is titled “Signal Processing Apparatus and Methods”
`and generally relates to a unified system of programming communication.
`Ex. 1003, Abstr. The challenged claims relate to methods of controlling the
`decryption of programming at a subscriber station or receiver station.
`Claim 2 is reproduced below:
`2. A method for controlling the decryption of programming at a
`subscriber station, said method comprising the steps of:
`receiving programming, said programming having a first
`encrypted digital control signal portion and an encrypted digital
`information portion;
`detecting said first encrypted digital control signal portion of said
`programming;
`passing said first encrypted digital control signal portion of said
`programming to a first decryptor at said subscriber station;
`decrypting said first encrypted digital control signal portion of
`said programming using said first decryptor at said subscriber
`station;
`passing said encrypted digital information portion of said
`programming and the decrypted control signal portion to a
`second decryptor at said subscriber station;
`decrypting said encrypted digital information portion of said
`programming using said second decryptor at said subscriber
`station based on the decrypted control signal portion; and
`presenting said programming.
`Id. at 286:7–28.
`The ’635 patent describes access control to transmitted content at a
`receiver station. Ex. 1003, Abstr. Figure 4 of the ’635 patent, reproduced
`below, illustrates a receiver station:
`
`3
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 3
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`
`
`As shown above in Figure 4, the ’635 patent discloses a receiver station
`having signal processor 200 to control tuners 214, 215, and 223, the
`switching of matrix switch 258, and decrypting by decryptors 107, 224, and
`230. Id. at 148:30–35. In one example described in the Specification, the
`“Wall Street Week” program is transmitted to the receiver station by a cable
`television head end. Id. at 149:23–26. Prior to transmission, the cable head
`end “encrypts the digital audio information of said transmission, in a fashion
`well known in the art, using particular cipher algorithm C and cipher key Ca,
`then transmits the information of said program on cable channel 13.” Id. at
`149:26–30. Furthermore, a SPAM message consisting of an “01” header,
`local-cable-enabling-message (#7), is transmitted with instructions that
`enable the “Wall Street Week” programming. Id. at 150:24–33. Executing
`the instructions causes controller 20 to receive the cable channel
`transmission, select the information of a cipher key Ca from among the
`
`4
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 4
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`information portion, and transfer the cipher key to decryptor 107. Id. at
`152:10–16, 44–48. Once the cipher key is received by decryptor 107,
`decryptor 107 then decrypts “using said key information and selected
`decryption cipher algorithm C, and output[s] the decrypted information of
`the audio portion of the ‘Wall Street Week’ program transmission.” Id. at
`152:48–51.
`Subsequently, a second SPAM message that consists of an “01”
`header provides “1st-stage-enable-WSW-program” instructions as the
`information segment information. Id. at 153:38–43. Executing the “1st-
`stage-enable-WSW-program” instructions causes controller 20 to affect a
`first stage of decrypting the video information of the “Wall Street Week”
`program transmission. Id. at 153:66–154:2. Controller 20 selects the
`decryption cipher key Ba and transfers it to selected decryptor 224. Id. at
`154:28–30. Controller 20 causes decryptor 224 to commence decrypting the
`received information using decryption cipher key Ba and decryption cipher
`algorithm B. Id. at 154:28–33.
`A third SPAM message provides “2nd-WSW-program enabling-
`message” instructions, causing the controller to affect a second stage of
`decrypting the digital video information of “Wall Street Week.” Id. at
`156:62–157:5. The second stage of decrypting the video information of the
`“Wall Street Week” program transmission is completed using the decryption
`cipher key Aa. Id. at 158:22–29. Finally, controller 20 causes the receiver
`station to commence the transfer of the decrypted television information of
`the “Wall Street Week” program to microcomputer 205 and monitor 202M.
`Id. at 159:55–59.
`
`5
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 5
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`D. The Asserted Grounds of Unpatentability
`Petitioner challenges the patentability of claims 1–4, 7, 13, 18, 20, 21,
`28–30, 32 and 33 of the ’635 patent based on the following grounds:
`Reference(s)
`Basis
`Claims Challenged
`Guillou1
`§ 102 1–3, 7, 21, and 29
`Guillou
`§ 103 4, 13, 18, 20, 28, 30, 32, and 33
`Aminetzah2
`§ 103 3, 21, and 28–30
`Aminetzah in view of Bitzer3
`§ 103 1, 2, 4, 7, 18, 20, and 33
`
`
`II. ANALYSIS
`
`A. Claim Construction
`Consistent with the statute and the legislative history of the Leahy-
`Smith America Invents Act,4 the Board will interpret claims of an unexpired
`patent using the broadest reasonable construction in light of the
`Specification of the patent. 37 C.F.R. § 42.100(b); Cuozzo Speed Techs.,
`LLC v. Lee, 136 S. Ct. 2131, 2144–46 (2016) (upholding the use of the
`broadest reasonable interpretation standard as the claim interpretation
`standard to be applied in inter partes reviews).
`Petitioner and Patent Owner dispute several claim terms that require
`construction. Most of the terms do not require express construction at this
`stage. See Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803
`(Fed. Cir. 1999) (only those terms which are in controversy need to be
`construed and only to the extent necessary to resolve the controversy). On
`
`
`1 US Patent No. 4,337,483, filed Jan. 31, 1980 (Ex. 1006) (“Guillou”).
`2 US Patent No. 4,388,643, filed Apr. 6, 1981 (Ex. 1008) (“Block”).
`3 US Patent No. 3,743,767, issued July 3, 1973 (Ex. 1009) (“Bitzer”).
`4 Pub. L. No. 112-29,125 Stat. 284 (2011).
`
`6
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 6
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`this preliminary record, the issues presented show that the following terms
`or phrases require express construction.
`1. “decrypt”
`Patent Owner argues that the term “decrypt” should be construed to
`exclude descrambling of an analog television transmission. Prelim. Resp. 8
`(citing Ex. 2001 ¶ 47). Petitioner argues to the contrary that a person of
`ordinary skill in the art would have understood “decrypt” and “descramble”
`as interchangeable terms that would apply to both analog and digital data.
`Pet. 4 (citing Ex. 1001 ¶¶ 62–65). Petitioner notes that in the previous and
`related inter partes review proceedings, the Board rejected Patent Owner’s
`similar proposals to construe “decrypting” to exclude descrambling. Pet. 3
`(citing. Ex. 1011, IPR2014-01533, Decision on Institution, Paper 7, 7–11;
`Ex. 1013, IPR2014-01532, Decision on Institution, Paper 8, 25–26).
`Additionally, Petitioner notes that the District Court for the Eastern District
`of Texas rejected Patent Owner’s argument that decrypting excludes
`descrambling. Pet. 4 (citing Ex. 1017, Personalized Media Communication,
`LLC v. Motorola, Inc., No. 2:08-cv-70, 2011 WL 4591898 (E.D. Tex. Sept.
`30, 2011), 29).
`The parties have proffered these same arguments in many of the
`previous proceedings, and we have determined consistently that the term
`“decryptor” includes a descrambler. See e.g., Amazon.com, Inc. v.
`Personalized Media Communication, LLC, Case No. IPR2014-01532 (“the
`’1532 IPR”), slip op. at 7–10 (PTAB March 29, 2016) (Paper 57) (“’1532
`Final Decision”). We see no reason to depart from that conclusion in this
`case. Our analysis primarily rest upon the passage from the specification of
`the ’635 patent reproduced below:
`
`7
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 7
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`For example, the decryption cipher key information and/or
`algorithm instructions and/or the location or locations of said
`key information and/or instructions may be computed in other,
`more complex or less complex, fashions. And for example, the
`transmitted programming may be processed through fewer than
`three steps of decryption or more than three. And for example,
`the “Wall Street Week” transmission may be of conventional
`analog television, and the decryptors, 107, 224, and 231, may
`be conventional descramblers, well known in the art, that
`descramble analog television transmissions and are actuated by
`receiving digital key information.
`Ex. 1003, 160:45–55 (emphasis added). Contrary to Patent Owner’s
`argument, the ’635 patent describes that even the analog television
`transmission can be actuated by receiving digital key information. See id.
`Despite Patent Owner’s many citations to related patents and related
`litigation, Patent Owner fails to cite to any evidence in the record directed
`specifically to the ’635 patent of a disavowal or waiver of the express
`statement in specification of the ’635 patent that decryptors may be
`descramblers. Accordingly, we construe the term “decrypt” with respect to
`the ’635 patent to include descrambling.
`2. “processor”
`Petitioner argues that in the ’1532 IPR, the Board correctly construed
`“processor” to mean “a device that operates on data.” Pet. 5 (citing Ex.
`1013, 7–8). On the other hand, Patent Owner argues that term processor
`should mean “a digital electronic device that processes information by
`operating on data according to instructions.” Prelim. Resp. 13. Patent
`Owner’s arguments are similar to those previously made and dismissed by
`the Board in the related inter partes review proceedings. See e.g., Prelim.
`Resp. 13–15; ’1532 Final Decision, 11–12.
`
`8
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 8
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`Petitioner points out that in related district court litigation, Patent
`Owner previously proposed construing the term “processor” as “any device
`capable of performing operations on data.” Pet. 5 (citing Ex. 1016, 12). The
`disclosures discussed above support Patent Owner’s district court
`construction. We also incorporate-by-reference our construction of processor
`in the ’1532 IPR, which relies on the same 1987 specification in a related
`patent. See ’1532 Final Decision, 11–12. Patent Owner fails to persuade us
`that there is any reason to depart from our previous construction of
`“processor.” Accordingly, consistent with our construction in the ’1532
`Final Decision, we determine that the broadest reasonable construction of
`“processor” is “a device that operates on data.”
`
`
`3. “at least one encrypted digital information transmission is
`unaccompanied by any non-digital information
`transmission”
`Petitioner proposes that the claim limitation “at least one encrypted
`digital information transmission is unaccompanied by any non-digital
`information transmission” recited in claim 18, and similarly in claims 20, 32,
`and 33, should be construed to mean “a digital information transmission,
`unaccompanied by any non-digital information transmission, at least a
`portion of which is encrypted.” Pet. 5. Patent Owner proposes that the
`limitation should be construed to mean “receiving information in at least one
`encrypted digital information transmission that does not include any analog
`component.” Prelim. Resp. 16 (citing Ex. 2001 ¶¶ 83–85).
`Patent Owner argues that that this limitation is not satisfied by the
`receiving of an analog transmission that includes digital signals, because
`such a transmission includes analog components. Id. (citing Ex. 2001 ¶ 84).
`
`9
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 9
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`Patent Owner also contends that it inserted this limitation during prosecution
`to distinguish the claimed invention from a prior art system that receives a
`composite analog/digital transmission. Id. (citing Ex. 2016, 1331).
`Specifically, Patent Owner argued during the prosecution of the ’635 patent
`that the prior art reference of Davidson failed to teach the claimed invention
`because Davidson’s “transmission is always a composite of analog and
`digital components.” Ex. 2016, 1331.
`In view of the plain language of the claim limitation, we determine
`that the “at least one encrypted digital information transmission” must not
`include any non-digital information in at least one transmission.
`Accordingly, we determine the broadest reasonable construction of the
`limitation “at least one encrypted digital information transmission is
`unaccompanied by any non-digital information transmission” recited in
`claim 18, and similarly in claims 29, 32, and 33 to mean “the at least one
`encrypted digital information transmission does not include non-digital
`information such as analog information.”
`
`B. Principles of Law
`A claim is unpatentable under 35 U.S.C. § 103(a) if the differences
`between the subject matter sought to be patented and the prior art are such
`that the subject matter as a whole would have been obvious at the time the
`invention was made to a person having ordinary skill in the art to which said
`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`(2007). The question of obviousness is resolved on the basis of underlying
`factual determinations, including: (1) the scope and content of the prior art;
`(2) any differences between the claimed subject matter and the prior art;
`
`10
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 10
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`(3) the level of skill in the art; and (4) objective evidence of nonobviousness,
`i.e., secondary considerations. See Graham v. John Deere Co., 383 U.S. 1,
`17–18 (1966).
`“In an [inter partes review], the petitioner has the burden from the
`onset to show with particularity why the patent it challenges is
`unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed.
`Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (requiring inter partes review
`petitions to identify “with particularity . . . the evidence that supports the
`grounds for the challenge to each claim”)). This burden never shifts to
`Patent Owner. See Dynamic Drinkware, LLC v. Nat’l Graphics, Inc., 800
`F.3d 1375, 1378 (Fed. Cir. 2015) (citing Tech. Licensing Corp. v. Videotek,
`Inc., 545 F.3d 1316, 1326–27 (Fed. Cir. 2008)) (discussing the burden of
`proof in inter partes review). Furthermore, Petitioner cannot satisfy its
`burden of proving obviousness by employing “mere conclusory statements.”
`In re Magnum Oil Tools Int’l, Ltd., 2016 WL 3974202, No. 2015-1300, slip
`op. at 25 (Fed. Cir. July 25, 2016).
`Thus, to prevail in an inter partes review, Petitioner must explain how
`the proposed combinations of prior art would have rendered the challenged
`claims unpatentable. At this preliminary stage, we determine whether the
`information presented in the Petition shows there is a reasonable likelihood
`that Petitioner would prevail in establishing that one of the challenged
`claims would have been obvious over the proposed combinations of prior
`art.
`
`We analyze the challenges presented in the Petition in accordance
`with the above-stated principles.
`
`
`11
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 11
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`C. Level of Ordinary Skill in the Art
`According to Petitioner’s Declarant, Mr. Wechselberger, a person of
`ordinary skill in the art relevant to the ’635 patent would have “bachelor’s
`degree in electrical engineering, or equivalent experience, and two to four
`years of experience in the broadcast or cablecast television transmission
`fields.” Ex. 1001 ¶ 81. Similarly, Patent Owner’s Declarant Dr. Weaver
`defines a person of ordinary skill in the art relevant to the ’635 patent to
`have a “bachelor’s degree or equivalent in digital electronics, electrical
`engineering, computer engineering, computer science, or a related technical
`degree, with 2-5 years of post-degree work experience in system engineering
`(or equivalent).” Ex. 2001 ¶ 31.
`Based on our review of the ’635 patent, the types of problems and
`solutions described in the ’636 patent and cited prior art, and the testimony
`of Petitioner’s declarant and Patent Owner’s declarant, we adopt, for
`purposes of this decision, Patent Owner’s definition of a person of ordinary
`skill in the art at the time of the claimed invention. Based on the stated
`qualifications of Mr. Wechselberger (Ex. 1006 ¶¶ 9–24) and Dr. Weaver
`(Ex. 2001 ¶¶ 2–15), we determine Petitioner’s Declarant meets the
`requirements of this definition and Patent Owner’s Declarant meets the
`requirements of this definition. We note that the applied prior art also
`reflects the appropriate level of skill at the time of the claimed invention.
`See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001).
`
`
`
`
`
`12
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 12
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`
`D. Asserted Anticipation and Obviousness Ground Based on Guillou
`1. Overview of Guillou
`Guillou is titled “Text Video-Transmission System Provided With
`Means For Controlling Access To The Information” and describes a system
`having an information emitting center, including an encryption means using
`an operating key, and receiving stations, which provides a decryption means
`using the operating key. Ex. 1006, Abstr. Figure 7 of Guillou illustrates one
`embodiment of system, and is reproduced below:
`
`
`As shown above in Figure 7, Guillou discloses emitting center 2, including
`automatic encryption means 24, and receiving station 4, including automatic
`decryption means 38. Id. at 10:3–42. Guillou discloses that automatic
`decryption means 38 includes discriminator 42, adapted to distinguish
`
`13
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 13
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`among coded octets, and logic circuit 46 to output the decoded octets dj to
`display means 20. Id. at 10:41–56. Additionally, Guillou discloses restoring
`circuit 110 for restoring the operating key K from message Mi. Id. at 16:1–
`7. Message forming circuit 102 forms messages Mi using the subscriber’s
`keys Ci and the operating key K according to an algorithm, Mi = FCi(K). Id.
`at 15:51–57. Additionally, restoring circuit 110 in receiving station 4
`receives the messages Mi and relies upon an algorithm, K = GCi(Mi), to
`restore the signal corresponding to the operating key K used in the emitting
`station. Id. at 16:1–10. Guillou also discloses that “[a]s soon as a
`distribution centre generates a new operating key K, it calculates, for each
`current subscribers’ key in use Ci for this service, a message Mi by means of
`an algorithm Mi = FCi(K), with the keys Ci acting as parameters.” Id. at
`8:44–48.
`
`
`2. Analysis of Asserted Anticipation by Guillou and Obviousness
`over Guillou
`Petitioner argues that claims 1–3, 7, 21, and 29 are anticipated by
`Guillou. Pet. 11–40. Petitioner also argues that claims 4, 13, 18, 20, 28, 30,
`32, and 33 would have been obvious over Guillou. Pet. 11–40.
`
`
`a. Alleged Anticipation of Claims 1 and 2
`Petitioner contends that for many of the same reasons Guillou
`anticipates claims 1 and 2. Pet. 9–16, 17–18. As the Petitioner focuses its
`analysis on claim 2, we will begin with an analysis of claim 2. Generally,
`Petitioner argues that claim 2 of the ’635 patent is virtually identical to claim
`1 of ’304 patent previously at issue in the ’1532 IPR. Id. at 11. In the ’1532
`Final Decision, we determined that claim 1 of ’304 patent had been shown
`
`14
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 14
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`by Petitioner to be unpatentable as obvious in view of Guillou. See ’1532
`Final Decision, 64. Petitioner argues that the only element of claim 1 of
`’304 patent that Patent Owner previously disputed was whether Guillou
`disclosed two decryptors instead of the claimed single decryptor, and
`Petitioner argues that claim 2 in the ’635 patent here recites the use of a first
`and second decryptor. Pet. 11 (citing Ex. 1010, 52; Ex. 1001 ¶ 114).
`Petitioner argues that Guillou discloses the method recited in claim 2
`by disclosing a method for controlling the decryption of programming (i.e.,
`teletext programming) at a subscriber station (i.e., receiving station 4),
`including a video transmission system that uses a “double-key” encryption
`scheme to control access to teletext programming at a receiver. Pet. 11
`(citing Ex. 1001 ¶¶ 115, 100–102; Ex 1006, Abstract, 1:7–12, 8:15–9:12,
`9:48–10:66, 15:42–16:17). Petitioner argues that the claimed “receiving
`programming, said programming having a first encrypted digital control
`signal portion and an encrypted digital information portion” is met by the
`disclosure of Guillou’s message Mi and encrypted teletext data Dj. Pet. 12
`(citing Ex. 1001 ¶¶ 116, 103–106). Specifically, Petitioner argues that
`Guillou discloses that teletext data dj is encrypted using operating key K at
`emitting center 2 to form encrypted teletext data Dj and operating key K is
`encrypted using each subscriber key Ci to form a set of encrypted messages
`Mi. Pet. 12 (citing Ex. 1006, 5:30–57, 8:39–48, 14:20–31, 15:42–64, Fig. 7;
`Ex. 1001 ¶¶ 104, 106).
`Furthermore, Petitioner argues that the claimed “detecting said first
`encrypted digital control signal portion of said programming” is met by the
`disclosure of Guillou’s of video-data separator 142, selection circuit 143,
`and decoding circuit 145 detecting and extracting encrypted message Mi and
`
`15
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 15
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`encrypted teletext data Dj. Pet. 13 (citing Ex. 1006, 15:64–16:10, 19:4–15,
`19:55–20:17, 20:42–52, Fig. 9; Ex. 1001 ¶¶ 107–108). Petitioner argues that
`the claimed “passing said first encrypted digital control signal portion of said
`programming to a first decryptor at said subscriber station” is met by
`Guillou’s disclosure of passing encrypted message Mi to a first decryptor, K
`restoring circuit 110 at the subscriber station. Pet. 13 (citing Ex. 1006,
`15:64–16:10, 19:55–20:17, 20:40–52, Fig. 10; Ex. 1001 ¶ 109). Petitioner
`also argues that the claimed “decrypting said first encrypted digital control
`signal portion of said programming using said first decryptor at said
`subscriber station,” is met by Guillou’s disclosure that K restoring circuit
`110 decrypts the appropriate message Mi using the subscriber’s key Ci to
`restore operating key K. Pet. 13–14 (citing Ex. 1006, 15:64–16:10, 20:53–
`21:14, Fig. 10; Ex. 1001 ¶ 110).
`Petitioner relies upon Guillou’s disclosure of passing the encrypted
`teletext data Dj and the operating key K to the second decryptor, including
`decoding octet generator 26’, discriminator 42, and XOR gate 46 for the
`limitation of “passing said encrypted digital information portion of said
`programming and the decrypted control signal portion to a second decryptor
`at said subscriber station” recited in claim 2. Pet. 14 (citing Ex. 1006 10:41–
`56, 20:29–39, Fig. 10; Ex. 1001 ¶¶ 120–121). Petitioner argues that the
`second decryptor in Guillou, including decoding octet generator 26’,
`discriminator 42, and XOR gate 46, performs the claimed step of
`“decrypting said encrypted digital information portion of said programming
`using said second decryptor.” Pet. 15 (citing Ex. 1006, 10:41–56, 20:29–39,
`Fig. 10; Ex. 1001 ¶¶ 122, 111–112). Finally, Petitioner argues that Guillou’s
`disclosure regarding presenting the teletext to the subscriber via display
`
`16
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 16
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`means 20 meets the claimed limitation of “presenting said programming.”
`Pet. 16 (citing Ex. 1006, 1:7–12, 18:61–19:3, Fig. 7; Ex. 1001 ¶¶ 123, 113).
`Patent Owner does not present separate arguments specifically
`directed at Petitioner’s challenges that Guillou anticipates claims 1 and 2.
`Based on the foregoing discussion and preliminary record, Petitioner
`establishes a reasonable likelihood of prevailing in showing that Guillou
`anticipates claims 1 and 2.
`
`
`b. Alleged Obviousness of Claim 3
`Claim 3 recites “receiving a control signal which operates at the
`remote transmitter station to control the communication of a unit of
`programming and one or more first instruct signals and communicating said
`control signal to said remote transmitter station.” With respect to claim 3,
`Petitioner argues that Guillou discloses the claimed method of controlling a
`remote transmitter station (emitting center 2) to communicate program
`material (encrypted teletext data) to a subscriber station (receiving station 4)
`and controlling the subscriber station to process or output a unit of
`programming (teletext programming). Pet. 36–37 (citing Ex. 1001 ¶¶ 124–
`126). Petitioner argues that Guillou discloses these claim limitations by
`disclosing a control signal (operating key K) which operates at the remote
`transmitting station (emitting center 2) to control the communication of a
`unit of programming (teletext programming) and a first instruct signal
`(encrypted messages Mi) and communicating the control signal to the remote
`transmitter station. Pet. 37 (citing Ex. 1001 ¶¶ 127–131).
`Patent Owner argues that Guillou fails to disclose “receiving a control
`signal which operates at the remote transmitter station to control the
`
`17
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 17
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`communication of a unit of programming and one or more first instruct
`signals,” because operating key K does not operate at the emitting center 2
`to control the communication and programming of encrypted messages Mi
`(the alleged one or more first instruct signals). Prelim. Resp. 44 (citing
`Ex. 2001 ¶¶ 108–110). More particularly, Patent Owner argues that
`operating key K does not control Guillou’s emitting center to communicate
`the teletext programming and has no effect on the transmission of teletext
`programming. Prelim. Resp. 44. Patent Owner’s Declarant Dr. Weaver
`testifies that “Guillou’s emitting center transmits teletext programming in
`cycles, regardless of when the operating key K is generated.” Ex. 2001 ¶
`108 (citing Ex. 1006, 2:27–42 (emitting center transmits teletext “cyclically
`with a periodicity of 4 seconds.”)). Dr. Weaver further states that the
`generation of a new operating key K only causes the components of the
`emitting center to transmit an updated access control page to the receiver
`station and does not cause the transmitting of teletext. Id. Petitioner’s
`Declarant Dr. Wechselberger, however, opines that Guillou’s operating key
`K satisfies this claim 3 limitation because “[o]perating key K operates to
`control the communication of teletext data dj by controlling access to the
`data through encryption.” Ex. 1001 ¶ 130. Patent Owner’s Declarant
`Dr. Weaver disagrees and states “[c]ontrolling the receiver’s access to the
`data by encrypting the teletext data dj does not ‘control the communication’
`of teletext dj.,” because “the data dj is communicated to the subscriber
`stations irrespective of which operating key K is being used.” Ex. 2001 ¶
`109.
`
`We have reviewed the arguments from Petitioner and Patent Owner,
`as well as testimony of both Mr. Wechselberger and Dr. Weaver. Under
`
`18
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 18
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`Rule 37 CFR § 42.108(c), any genuine issues of material fact should be
`viewed in the light most favorable to the petitioner solely for purposes of
`deciding whether to institute an inter partes review. Even viewing
`Mr. Wechselberger’s testimony in the light most favorable to Petitioner, we
`determine Petitioner fails to sufficiently establish that Guillou discloses the
`claimed “receiving a control signal.” We are persuaded at this stage of the
`proceeding by Patent Owner’s contention, as supported by Dr. Weaver’s
`testimony, that the cited portion of Guillou fails to disclose the claimed
`“receiving a control signal” because Guillou describes that emitting center 2
`transmits teletext “cyclically with a periodicity of 4 seconds,” while the
`emitting center 2 generates and transmits an operating key K using a much
`longer interval, in the order of “a few minutes.” Ex. 1006, 2:27–42, 10:4–7.
`Thus, we are not persuaded, based on this record, that operating key K
`controls emitting center 2 to communicated teletext programming.
`Based on the record before us, and in view of these deficiencies in the
`application of Guillou to independent claim 3 in Petitioner’s challenge, we
`determine that Petitioner fails to demonstrate a reasonable likelihood of
`prevailing in its challenge to claim 3 as being anticipated by Guillou.
`
`
`c. Alleged Obviousness of Claim 4
`Claim 4 requires “said programming further includes encrypted
`video,” which Petitioner argues is taught by the disclosure in Guillou of a
`“video-transmission” system with encrypted teletext programming that
`includes text and simple graphics that may be non-static. Pet. 16 (citing Ex.
`1006, 1:7–62; Ex. 1001 ¶ 141). Patent Owner counters that Guillou’s
`disclosure of teletext does not teach the claim 4 requirement of “video”
`
`19
`
`APPLE EXHIBIT 1054
`APPLE v. PMC
`IPR2016-01520
`Page 19
`
`
`
`IPR2016-00754
`Patent 8,559,635 B1
`
`because teletext is static, whereas video shows movement and changes
`within an image. Prelim. Resp. 60 (citing Ex. 2001 ¶ 122).
`Contrary to Patent Owner’s argument, Declarant Mr. Wechselberger
`states that it “was well known that [] digital programming services included
`text and/or graphics used to generate visuals for a variety of programming,
`including news programs, weather services, educational programs, etc.”
`Ex. 1001 ¶ 281. As Mr. Wechselberger describes “[s]uccessive frames of
`text and/or graphics presented on the display means 20 constitutes video.”
`Id. Accordingly, we are not persuaded by Patent Owner’s argument. Based
`on the foregoing discussion and prel