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`UNITED STATES PATENT AND TRADEMARK
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`OFFICE BEFORE THE PATENT TRIAL AND
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`APPEAL BOARD
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`APPLE INC.
`Petitioner
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`v.
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`PERSONALIZED MEDIA COMMUNICATIONS, LLC
`Patent Owner
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`Case No.: IPR2016-01520
`Patent No.: 8,559,635
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`PATENT OWNER’S REPLY IN SUPPORT OF MOTION TO AMEND
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`Table of Contents
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`Page
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`I. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §101 ............ 1
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`II. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §112 ............ 2
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`III. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §§102-103 ... 9
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`IV. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER PRIOR ART ........... 12
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`I.
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`SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §101
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`Petitioner directs its §101 arguments to U.S. Patent 7,801,304 (“’304”), not at
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`issue here. Contrary to Petitioner’s assertions, the Substitute Claims are not
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`“strikingly similar” to claim 1 of the ’304 patent, and may be distinguished by at
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`least the following concrete features. Claims 41-45, 47 and 48 all require the
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`concrete step of choosing from amongst a plurality of cipher algorithms
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`preprogrammed at a subscriber station. Claim 41 includes at least a “first instruct
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`signal,” at least a “second instruct signal,” and “a code or datum,” all of which must
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`be received by the “remote transmitter station.” Claim 44 requires receipt and use
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`of “executable instructions” and “unique digital data.” Claim 45 requires storing
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`“subscriber specific digital data” at the “receiver station” to customize output
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`information, decrypting a portion having a “first decrypted portion” and a “second
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`decrypted portion,” and the “second decrypted portion” having “unique digital data”
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`that is “communicated to a remote site.” Claims 46 and 47 require storage of a
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`“computer file with a file extension,” which contains “unique digital data specific to
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`a subscriber” resulting from subscriber input that is stored prior to receipt of a
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`digital information transmission that instructs usage of the stored data. Claim 46
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`also requires “presenting a shopping list customized dependent on [the] computer
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`file.” Claim 47 also requires “outputting computer information” that is “customized
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`dependent on [the] computer file.” Claim 48 requires storing “subscriber specific
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`1
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`digital data” and customizing “a shopping list” dependent on the storing. These
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`claim limitations require the concrete steps of at least storing subscriber specific
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`data, choosing an algorithm to decrypt received information, and customizing and
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`outputting the decrypted information based on that stored data.
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`Claims 42 and 43 depend from claim 2 and therefore require at least a “first
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`decryptor” and a “second decryptor,” while the ’304 patent claims only a single
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`decryptor. These claims also include the concrete step of “passing said encrypted
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`digital information portion of said programming and the decrypted control signal
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`portion to a second decryptor at said subscriber station,” which results in the
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`concrete benefit of making it more difficult to hack a system. (Ex. 2213 at ¶¶ 161-
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`62; Contingent Motion to Amend (“CMTA”) at 5.)
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`Moreover, the method claims in the Substitute Claims were not conventional.
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`While the use of decryptors may have been conventional, at least the passing of
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`signals, the number of decryptors, and the personalized outputs were not
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`conventional.
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`Contrary to Apple’s assertions, PMC did not suggest in its CMTA that Judge
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`Payne’s decision is controlling on the Board. However, Judge Payne’s decision,
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`made based on the same legal standard as is appropriate in this proceeding, is highly
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`persuasive authority and should be carefully considered by the Board.
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`II.
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`SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §112
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`2
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`In its CMTA, PMC relies on a single embodiment—the embodiment in
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`Example #7—to support each original claim and its proposed amendment. It is the
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`specification itself that points to disclosures of other Examples such as Example #4
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`to fill in gaps in Example #7. (Ex. 2208 at 291:3-4 in original.) It is also the
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`specification itself that points to disclosures of other Examples, such as Example
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`#7, in the Exotic Meals illustration. (Id. at 478:1-4.) Further, the Exotic Meals
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`illustration (id. at Fig. 7F) uses decryptor 224, and Example #7 uses decryptor 224
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`(id. at Fig. 4), making Example #7 the obvious choice to fill in the gaps in the
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`Exotic Meals illustration.
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`Apple’s written description arguments are mostly directed to limitations
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`found in the original claims; written description of these claim limitations is not at
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`issue in this proceeding. (35 USC § 311(b) “A petitioner in an inter partes review
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`may request to cancel as unpatentable 1 or more claims of a patent only on a ground
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`that could be raised under section 102 or 103 …”). Respironics, cited by Petitioner,
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`does not instruct otherwise. Respironics requires that the additional claim
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`limitations are supported when in combination with the original limitations; it does
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`not require a Patent Owner to show support for the original limitation. Regardless,
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`for completion, PMC here replies to all of Apple’s written description arguments.
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`Apple argues Claim 41 requires “receiving a control signal at a first location”
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`and “communicating from the first location.” (Petitioner’s Opposition to CMTA
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`3
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`(“Opp.”) at 8-9.) Apple has mis-quoted the claim, which does not require “a first
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`location” for both receiving and communicating. Even worse, the claim requires
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`“communicating …to said remote transmitter station” (the remote transmitter
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`station is the ITS), and not “from” any recited location. The specification supports
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`the claim as written. (See Ex. 2223 at 33, explaining that the ’413 Application
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`discloses an originating studio transmits a control signal to an ITS with the claimed
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`function.)
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`Apple’s expert argues the “second instruct signal” is not both received and
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`transmitted by the ITS. (Opp. at 9.) Apple asserts that a signal is received and a
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`message is transmitted by the ITS. PMC agrees. However, the transmitted message
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`includes a signal, specifically the “enable-WSW instructions,” that was received by
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`the ITS. The message incorporates that signal with other information and then
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`transmits it. (Ex. 2223 at 39.) Therefore, the ITS both receives and transmits a
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`signal. The “incorporate” instructions use station-specific data to transform the
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`generic “enable-WSW instructions” into specific instructions. For example, a
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`specific key (e.g., key Ca or Ta) is incorporated into the “enable-WSW
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`instructions.” (Id. at 40.) While a new “message” may be created, the signal is
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`received, then incorporated with specific information into the instructions, resulting
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`in the transmission of “local-cable-enabling-message (#7).” (Id. at 43.)
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`For Claims 42-43, Apple argues “local-cable-enabling-message (#7)” is
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`4
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`completely absent any encrypted portion. Apple has taken Dr. Dorney’s statement
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`made regarding a different patent with different claims (Ex. 1059 at 12, 23, 34,
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`regarding IPR2017-00755) out of context. According to Apple, Dr. Dorney stated
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`that the “local-cable-enabling-message” is entirely not encrypted. Dr. Dorney’s
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`statement, properly understood in context, was that the “local-cable-enabling-
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`message” included an unencrypted portion. He did not say that the entire message
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`is not encrypted. In any event, that statement is irrelevant to the claim term at issue
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`here. Regarding the disclosure for the correct claims, Dr. Dorney stated in his
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`declaration in IPR2016-00754 on the patent at issue in this case that “As shown
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`above, local-cable-enabling- message (#7), processed according to ‘the fashion in
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`which information of first message of example #4’, comprises both unencrypted and
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`encrypted digital information.” (Ex. 2224 at 14-15.)
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`Indeed, in a passage often quoted by Apple (see, e.g., Opp. at 10-11) from
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`within Example #7 regarding the WSW program, Harvey et al. discloses control
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`processor 39J causes the transfer of information to controller 20 “in the fashion in
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`which information of first message of example #4 is transferred … to decryptor,
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`39K.” (Ex. 2208 at 291:33-292:6, emphasis added.) There would be no reason to
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`transfer the information to a decryptor unless that information is encrypted.
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`Further, Example #4, referenced in this section of Example #7 and also regarding
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`the WSW program, clearly discloses both encrypted and not encrypted information:
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`5
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`“the first message of example #4 is only partially encrypted.” (Ex. 2208 at 198:10-
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`26, emphasis added.)
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`Also regarding claims 42 and 43, Apple argues “digital video” is not enabled
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`in the ’413 Application and was nascent in 1981. Apple’s argument is inapposite to
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`the Substitute Claims, which claim priority to 1987. As of 1987, digital video was
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`not “nascent;” Apple’s expert Mr. Wechselberger published a document in 1983
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`regarding the tradeoffs for cost and quality of digital video, which could not be
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`known without working systems. (Ex. 2006 at 4 in “ENCRYPTION IMPLIES
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`DIGITAL”.) And PMC’s expert Prof. Weaver provides multiple sources teaching
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`“digital video” (Ex. 2023 at ¶¶166-168).
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`For Claims 44, 45, 47, and 48, Apple argues “identifying a cipher algorithm”
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`is not supported by the ’413 Application. Apple is not correct: the specification
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`discloses that the “Exotic Meals of India” second message can be encrypted using
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`“any of the methods described above.” (Ex. 2208 at 478:1-5, Fig. 7F.) Regardless
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`of chosen encryption embodiment, Harvey et al. discloses selection of at least
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`cipher algorithms A, B, or C, or decryptor 39K, which has its own cipher algorithm.
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`(Ex. 2208 at 286:34-287:7, 198:10-16, 206:32-207:9; CMTA at 9-10, B-36 to 38.)
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`To decrypt properly, the receiver station must perform “identifying a cipher
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`algorithm” to determine how to decrypt because a plurality of cipher algorithms
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`exist at the receiver station. Apple’s arguments regarding the decryptor 39K
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`6
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`algorithm do not address that, regardless of whether choosing a “key” is the same as
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`choosing an “algorithm” (it is not),1 a choice must still be made from between
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`algorithms A, B, C, or the decryptor 39K algorithm.
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`In Claims 45-48, Apple argues receiving an “encrypted digital information
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`transmission … unaccompanied by any non-digital information transmission” is
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`unsupported. As explained in PMC’s CMTA (p. 14-15), Fig. 7C of the ’413
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`Application discloses cable converter box 222 outputting “one digital data channel.”
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`Fig. 7F, regarding the “Exotic Meals of India” embodiment, discloses the same
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`converter box 222 used with All signal decoder (shown in Fig. 7C, and described
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`with respect to Fig. 7F) and outputs to digital decryptor 224 (Fig. 7F) that decrypts
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`the digital second message. The converter 222 output in Fig. 7F must therefore be a
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`digital data channel. (Ex. 2223 at 83-88.)
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`Respecting claims 44-48, Apple asserts that there is no support for the term
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`“communicating … unique digital data to a remote site.” As explained (Ex. 2223 at
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`1 The decryptor 39K algorithm, which decrypts without “altering the number of
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`bits,” is selected by matching particular message bits to invoke “decrypt-with-[key]-
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`at-39K-instructions” using keys such as G, J, or Z. (Ex. 2208 at 45:4-46:16, 228:1,
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`200:34-203:35; Ex. 2223 at 72-73, 95-96.) Simply identifying a decryption key is
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`insufficient to identify a cipher algorithm.
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`7
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`75-76), this term is supported by the “Exotic Meals of India” embodiment,
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`specifically the “unit code identification information” (Ex. 2208 at 473:3-13, 471:6-
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`13) which enables a fee to be charged (CMTA at 10) by transmission of the meter-
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`monitor information to a billing station (Ex. 2223 at 76-78). The cited portions of
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`the specification all discuss the transmission of information regarding billing a
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`subscriber for his content consumption and are therefore properly considered
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`together.
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`In Substitute Claim 48, contrary to Apple’s argument, Example #7 discloses a
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`headend transmitting a message to a receiver station in one of several possible
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`formats. It is the header that informs the receiving station which format and which
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`“selection criteria” are appropriate to understand the pieces of a given transmission.
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`(Ex. 2223 at 197; Ex. 2208 at 291:9-292:30, 45:4-20.) Example #7 supports the
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`claim because the inventors allow decryption using “any of the methods described
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`above.” (Ex. 2208 at 478:1-5.)
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`With respect to Apple’s assertion that Dr. Dorney is not an expert in the field,
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`PMC points the Board to Dr. Dorney’s CV at Ex. 2206. Among his other
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`credentials and experience, Dr. Dorney has a Ph.D. in Electrical and Computer
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`Engineering from Rice University. Dr. Dorney certainly is “qualified in the
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`pertinent art.” See Husky Injection Molding Systs. v. Plastic Engineering and
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`Technical Svcs., Inc., IPR2016-00431, Paper 41 at 13 (P.T.A.B. Jun. 15, 2017) (“A
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`8
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`person need not be a person of ordinary skill in the art in order to testify as an
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`expert under Fed. R. Evid. 702, but rather must be “qualified in the pertinent art.”)
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`III. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER 35 USC §§102-103
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`PMC addressed the prior art in its CMTA. Although Apple points to a
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`number of prior art references listed on the ’635 patent, the Board has narrowed the
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`field to the best three references that Apple relied on in its petition for IPR. PMC
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`addressed these three references, Campbell, Seth-Smith, and Chandra, in its CMTA
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`and explained how the Substitute Claims are patentable over these references. PMC
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`also put together its best shot argument (see CMTA at 23-24) after reviewing all the
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`prior art and explained how the Substitute Claims are patentable over this prior art.
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`For Substitute Claim 41, Apple argues a “PHOSITA would have known …
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`Campbell could be used to deliver digital programming” (Opp. at 18-19), but
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`Campbell is completely silent as to any digital video or audio. Apple’s challenge
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`relies on an argument that just because digital video was known, a PHOSITA would
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`have been motivated to substitute digital video for Campbell’s analog video. This is
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`a classic case of hindsight bias. The CAFC has warned that an analysis based on
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`expert testimony that “based on the ‘modular’ nature of the claimed components,” a
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`PHOSITA would have known how to combine references and would have been
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`motivated to do so is “fraught with hindsight bias.” In re ActiveVideo Networks,
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`Inc., 694 F.3d 1312, 1327 (Fed.Cir.2012).
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`9
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`Apple’s hindsight continues by combining Campbell’s scrambled TV system
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`(excluded by amended claim 41) with Pailen’s mainframe/terminal system for
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`computer programs. Apple simply inserts Pailen’s cipher algorithm for an APEC
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`mainframe into Campbell’s scrambled TV subscriber’s converter. (Opp. at 19-20.)
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`A computer system is not synonymous with a TV system, and a mainframe is not
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`synonymous with a subscriber station. Further, Pailen’s terminals 18 may be
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`similar to a subscriber station in some ways, but switch 52 prevents them from
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`being involved in an authorization. (Ex. 1062 at 7:33-46, Fig. 1B.)
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`Apple asserts that Seth-Smith renders Claims 42 and 43 obvious. But, Seth-
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`Smith teaches only scrambled analog video (Ex. 1043 Fig. 17), pay-per-listen
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`digital audio with no video component (id. at 9:46-55), and closed captioning
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`textual information absent any graphics (id. at 2: 53-58; NAPLPS, Ex. 2101).
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`Apple provides only hindsight analysis to arrive at the encrypted digital video as
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`required by the claims, contrary to Fed. Cir. precedent in ActiveVideo.
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`Further the claims require a computer file and Seth-Smith is silent as to a
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`computer file, and instead repeatedly stores the fixed-size packets directly into
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`RAM 124 without a computer file system. (Ex. 1043 at 39:64-40:68, 29:11-32.)
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`Apple also argues that “authorized tiers” are “subscriber specific data”, but tier data
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`is at most decoder-specific and lacks information corresponding to a subscriber.
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`Moreover, with respect to Claims 42-43, Seth-Smith does not teach two-way
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`10
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`communications, and instead teaches an explicitly one-way system: “no uplink
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`facility at the user's station need be provided.” This teaches away from a two-way
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`communication. Citations in Seth-Smith to a “telephone” indicate human-to-human
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`transactions, and not machine-to-machine transactions. Indeed, Seth-Smith states
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`that “the user will only need to communicate with the broadcaster sporadically”
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`(Ex. 1043 at 9:38-40, 10:19-27, emphasis added), further dissuading any need for a
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`complicated and costly two-way communication system. Any combination of Seth-
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`Smith with Pailen is forbidden hindsight. See ActiveVideo.
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`With respect to Apple’s combination of Chandra and Thomas for claims 44-
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`48, Chandra prefers that all software media be identical (Ex. 1041 at 8:45-60) while
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`Thomas requires individual software serial number 17. (Ex. 1064 at 5:49-54.)
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`Further, neither reference meets the limitation requiring the “unique digital data” to
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`be in decrypted form and then communicated to a remote site. Thomas transfers
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`serial numbers that were never decrypted (Ex. 1064 at 5:49-54), and Chandra
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`requires the encrypted token “must be kept physically secure” (Ex. 1041 at 5:20-23,
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`7:22-57).
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`With respect to Apple’s reliance on Bergland, Bergland does not teach the
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`required receiver station with storage for “subscriber specific data” and the ability
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`to execute instructions/code. Bergland teaches terminals that receive only “data and
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`voice” (Ex. 1065 Fig. 3 & pg. 2.) Bergland’s terminals don’t receive instructions;
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`11
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`therefore, the food service program must be executed at the central (Tandem)
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`computer and cannot be executed at the home terminal. (Ex. 1065 Fig. 2 & pg. 1.)
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`Chandra is designed to prevent piracy while Bergland’s Prestel hardware is a closed
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`system, hosted elsewhere, and therefore already prevents piracy. Thus Chandra and
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`Bergland cannot be combined.
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`Pailen teaches terminals, but they are without a plurality of cipher algorithms.
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`Chandra teaches away from transmitting decrypted information. Thus, their
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`combination cannot teach “a plurality of preprogrammed cipher algorithms” at the
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`user terminals 18 (supra); and Chandra is silent as to transmission of any token
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`information.
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`IV. SUBSTITUTE CLAIMS ARE PATENTABLE UNDER PRIOR ART
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`Apple offers Exs. 1021, 1026, and 1079-1081 as additional prior art without
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`comment. These exhibits all fail to even suggest at least choosing from plural
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`cipher algorithms at a receiver station, communication to a remote site of decrypted
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`unique digital data, and outputting information customized by subscriber specific
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`digital data stored at a receiver station prior in time to receiving the information.
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`These additional prior art references are cumulative to the prior art already known
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`to PMC.
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`12
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`Respectfully submitted,
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`
`
`/ Thomas J. Scott, Jr. /
`By
`Thomas J. Scott, Jr.
`Registration No.: 27,836
`Senior Vice President & General Counsel
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`Personalized Media
`Communications, LLC
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`11491 Sunset Hills Road, Suite 340
`Reston, Virginia 20190
`Telephone: (281) 201-2213
`tscott@pmcip.com
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`Dated: August 31, 2017
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`CERTIFICATE OF SERVICE
`The undersigned hereby certifies that a copy of the foregoing PATENT
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`OWNER’S REPLY IN SUPPORT OF MOTION TO AMEND, EXHIBIT
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`2224 and SUBSTITUTE EXHIBIT 2208 was served on August 31, 2017 to the
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`following attorneys of record by electronic transmission:
`
`Marcus E. Sernel, Joel R. Merkin, and Eugene Goryunov
`KIRKLAND & ELLIS LLP
`300 North LaSalle Street
`Chicago, Illinois 60654
`P: (312) 862-2000; F: (312) 862-2200
`marc.sernel@kirkland.com
`joel.merkin@kirkland.com
`eugene.goryunov@kirkland.com
`Apple-PMC-PTAB@kirkland.com
`
`Gregory S. Arovas
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, New York 10022
`P: (212) 446-4800; F: (212) 446-4900
`greg.arovas@kirkland.com
`
`Date: August 31, 2017
`
`
`
`/ Thomas J. Scott, Jr. /
`Thomas J. Scott, Jr.
`
`
`
`
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