UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLEINC.,
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00124
`Patent 7,942,317 B2
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`LEcHHd12YHL102
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLEINC.,
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00124
`Patent 7,942,317 B2
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`LEcHHd12YHL102
`
`
`
`Notice is hereby given, pursuant to 37 C.F.R. § 90.2(a), that Patent Owner
`
`Smartflash LLC appeals to the United States Court of Appeals for the Federal
`
`Circuit from the Final Written Decision entered on November 7, 2016 (Paper 31),
`
`the Decision Denying Rehearing entered on January 27, 2017 (Paper 33) and from
`
`all underlying orders, decisions, rulings and opinions regarding U.S. Patent No.
`
`7,942,317 (‘the ‘317 Patent”) including the Decision - Institution of Covered
`
`Business Method Patent Review entered on November10, 2015 (Paper7).
`
`For the limited purpose of providing the Director with the information
`
`requested in 37 C.F.R. § 90.2(a)(3)(ii), Patent Owneranticipates that the issues on
`
`appeal mayinclude the following, as well as any underlying findings,
`determinations, rulings, decisions, opinions, or other related issues:
`
`e Whether the Board erred in finding that claims 2-5, 9-11, 14, 15, 17,
`
`and 19 of the °317 Patent are unpatentable under 35 U.S.C. § 101;
`
`e Whether the Board erred in finding that claim 19 of the ‘317 Patentis
`
`unpatentable as being indefinite under 35 U.S.C. § 112;
`
`e Whether the Board erred in denying Patent Owner’s Motion to
`
`Exclude (Paper 24); and
`
`e Whether the Board erred in finding that the subject matter of the ‘317
`
`Patentis directed to activities that are financial in nature and in
`
`instituting Covered Business Method review of the ‘317 Patent.
`
`
`
`Copies of this Notice ofAppeal are being filed simultaneously with the
`
`Director, the Patent Trial and Appeal Board, and the Clerk of the United States
`
`Court of Appeals for the Federal Circuit.
`
`Any required fees may be charged to Deposit Account No. 501860.
`
`Dated March 27, 2016
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No, 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned herebycertifies that this PATENT OWNER’S NOTICE
`OF APPEAL wasfiled with the Patent Trial and Appeal Board using the E2E
`System and wasserved, by agreementof the parties, by emailing copies to counsel
`for the Petitioner as follows:
`
`Gabrielle E. Higgins (gabrielle-higgins@ropesgray.com)
`James R. Batchelder (james.batchelder@ropesgray.com)
`ApplePTABService-SmartF lash@ropesgray.com
`
`The undersigned hereby further certifies that on March 27, 2017 this
`PATENT OWNER’S NOTICE OF APPEAL (andits three attached decisions)
`were filed with the Federal Circuit via CM/ECF (along with one courtesy copy by
`hand delivery) and two (2) copies were served on the U.S. Patent and Trademark
`Office via in-hand delivery as follows:
`
`Director of the United States Patent and Trademark Office
`c/o Office of the General Counsel
`Madison Building East, 10B20
`600 Dulaney Street
`Alexandria, VA 22314-5793
`
`Dated: March 27, 2017
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`|
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 33
`Entered: January 27, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLEINC.,
`Petitioner,
`
`Vv.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00124
`Patent 7,942,317 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,and
`JEREMY M. PLENZLER,Administrative Patent Judges.
`
`ELLURU,Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 CFR. § 42.71
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`INTRODUCTION
`
`AppleInc. (“Petitioner”), filed a Petition to institute covered business
`
`method patent review of claims 1-17 and 19 of U.S. Patent No. 7,942,317
`
`B2 (Ex. 1001, “the ?317 patent”) pursuant to § 18 of the Leahy-Smith
`America Invents Act (“AIA”). Paper 2 (“Pet.”).! On November 10, 2015,
`
`we instituted a covered business method patent review (Paper7, “Institution
`
`Decision”or “Inst. Dec.”) based upon Petitioner’s assertion that claims 2-5,
`
`9-11, 14, 15, 17, and 19 (‘the challenged claims’) are directed to patent
`ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 25”. Subsequent
`to institution, Smartflash LLC (“Patent Owner’’)filed a Patent Owner
`
`Response(Paper 17, “PO Resp.”) and Petitionerfiled a Reply (Paper21,
`“Pet. Reply”) to Patent Owner’s Response. Patent Owner, with
`
`authorization, filed a Notice of Supplemental Authority. Paper 28
`
`(“Notice”). Petitioner filed a Response to Patent Owner’s Notice. Paper 29
`
`(“Notice Resp.”’).
`
`In our Final Decision, we determined Petitioner had established, by a
`
`preponderanceofthe evidence, that claims 2-5, 9-11, 14, 15, 17, and 19 of
`the 317 patent are directed to patent ineligible subject matter under 35
`
`U.S.C. § 101. Paper 31 (“Final Dec.”), 3, 35. Patent Owner requests
`
`rehearing of the Final Decision with respect to patent ineligibility of the
`challenged claims under § 101. Paper 32 (“Request” or “Req. Reh’g”).
`
`' Pub. L. No. 112-29, 125 Stat. 284, 296-07 (2011).
`
`2 Wealsoinstituted a review of claim 19 as being indefinite under 35 U.S.C.
`§ 112, second paragraph. Jd. Because a final written decision determining
`that claims 1, 6-8, 12, 13, and 16 of the ’317 patent are unpatentable under
`§ 103 had already issued in CBM2014-001 12, we declinedto institute a
`review of claims 1, 6— 8, 12, 13, and 16 in this proceeding.Jd. at 6-7.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`Having considered Patent Owner’s Request, we decline to modify our Final
`
`Decision.
`
`STANDARD OF REVIEW
`
`In covered business methodreview,the petitioner has the burden of
`
`showing unpatentability by a preponderanceof the evidence. 35 U.S.C.
`
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`
`C.F.R. § 42.71(d), which states:
`
`The burden of showing a decision should be modified lies with
`the party challenging the decision. The request mustspecifically
`identify all matters the party believes the Board misapprehended
`or overlooked, and the place where each matter was previously
`addressed in a motion, an opposition,or a reply.
`
`ANALYSIS
`
`Patent Owner’s Request is based on a disagreementwith our
`
`determination that the challenged claimsare directed to patent-ineligible
`
`subject matter. Req. Reh’g 3.
`
`In its Request, Patent Ownerinitially presents arguments directed to
`
`alleged similarities between the challenged claims and those at issue in DDR
`Holdings’, Enfish*, and Bascom. Id. at 4-11. Those cases were each
`addressed in the Patent Owner Response or Patent Owner’s Notice, as well
`
`as in our Final Decision. As noted above,our rules require that the
`
`requesting party “specifically identify all matters the party believes the
`
`3 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
`4 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
`> BASCOM Global Internet Services, Inc. v. AT&T Mobility, LLC, 827 F.3d
`1341 (Fed. Cir. 2016).
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`Board misapprehended or overlooked, and the place where each matter was
`
`previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
`
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`
`identify any specific matter that we misapprehendedor overlooked.
`Although Patent Owner repeatedly states that the Board “misapprehends”
`
`Smartflash’s argument(see, e.g., Req. Reh’g 5, 10), it does not offer
`
`sufficient explanation as to how we misapprehendedor overlooked any
`
`particular “matter [that] was previously addressed in a motion, an
`opposition, or a reply.” Rather than providing a proper request for
`rehearing, addressing particular matters that we previously allegedly
`
`misapprehendedor overlooked, Patent Owner’s Request provides new
`
`briefing by expounding on argument already made.
`
`To the extent portions of the Request are supported by Patent Owner’s
`
`argumentin the Patent Owner Responseor in Patent Owner’s Notice, we
`
`considered those arguments in our Final Decision, as Patent Owner
`
`acknowledges. See, e.g., Req. Reh’g 5, 7, 9 (noting that the Board
`
`“rejected” Smartflash’s argument with respect to each of DDR Holdings,
`Enfish, and Bascom). OurFinal Decision, as noted above, addresses Patent
`Owner’s arguments related to DDR Holdings (Final Dec. 17-21), Enfish (id.
`at 12-13), and Bascom (id. at 21-23). Patent Owner’s Request is simply
`based on disagreement with our Final Decision, whichis not a proper basis
`
`for rehearing.
`
`Patent Owneralso presents new arguments directed to alleged
`similarities between the challenged claims and those addressed in McRO®
`
`6 McRO, Inc. v. Bandai Namco Games Am.Inc., 837 F.3d 1299 (Fed.Cir.
`2016).
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`and Amdocs’, which were issued after Patent Owner’s Notice wasfiled.
`
`Req. Reh’g 11-15. Patent Owneralleges that we overlooked the Federal
`
`Circuit’s decisions in McRO and Amdocs. Id. at 2. The decisions in those
`
`cases issued before our Final Decision and, althoughnotspecifically
`
`referenced, were considered when we determinedthat the challenged claims
`
`are patent-ineligible.
`
`Whenaddressing McRO,Patent Ownerdoeslittle, if anything, to
`
`analogize those claimsto the challenged claims, other than summarizing the
`
`discussion in McRO (id. at 11-13), and concludingthat
`
`[b]ecause the challenged claims are a technological improvement
`overthe then-existing systems, and limit transfer and retrieval of
`content based on payment and/or access rules in a process
`specifically designed to achieve an improved technologicalresult
`in conventional industry practice, the challenged claims are not
`directed to an abstract idea.
`
`Id. at 13 (citing Ex. 1001, 22:36-57 (claim 11), 26:4—7 (claim 2-5), 26:58—
`
`27:17 (claims 14, 15), 28:16—23 (claim 17)). But McRO does not stand for
`
`the general proposition that use of rules or conditions, such as payment,to
`
`achieve an improvedtechnological result, alone, removes claims from the
`
`realm of abstract ideas. In McRO, the Court explainedthat “the claimed
`
`improvement[was] allowing computers to produce ‘accurate and realistic lip
`
`synchronization and facial expressions in animated characters’ that
`
`previously could only be produced by human animators.” Jd. at 1313
`(citation omitted). The Court explained that the claimed rules in McRO
`transformedatraditionally subjective process performed by humanartists
`
`into a mathematically automated process executed on computers(i.e., the
`
`7 Amdocs(Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir.
`2016).
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`processes were fundamentally different). Jd. at 1314. The Court explained
`that “it [was] the incorporation of the claimed rules, not the use of the
`computer,that ‘improved [the] existing technological process’ by allowing
`the automation offurther tasks.” Jd. at 1314 (alteration in original) (quoting
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347, 2358 (2014)). The
`
`Court distinguished this from situations “where the claimed computer-
`
`automated process and the prior method were carried out in the same way.”
`
`Id. (citing Parker v. Flook, 437 U.S. 584, 585-86 (1978); Bilski v. Kappos,
`
`561 U.S. 593, 611 (2010); Alice, 134 S. Ct. at 2356)).
`As explained in our Final Decision, the challenged claims “merely
`implementan old practice in a new environment.” Final Dec. 12 (quoting
`FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1094 (Fed. Cir.
`2016)). The challenged claimsare similar to the claims found ineligible in
`
`FairWarning, which the Court distinguished from those at issue McRO.
`FairWarning, 839 F.3d at 1094-95. In FairWarning, the Court explained
`that “[t]he claimed rules ask .
`.
`. the same questions .
`.
`. that humansin
`analogoussituations .
`.
`. have asked for decades,if not centuries” andthat it
`is the “incorporation of a computer, not the claimed rule, that purportedly
`‘improve[s] [the] existing technological process.’” Jd. at 1095 (citing Alice,
`134 S. Ct. at 2358). This is similar to the challenged claims, where the
`“payment data” in claim 17 and the “userule data” in claim 14, for example,
`are merely conditions for “determin[ing] what access is permitted to data
`stored on the datacarrier,” that the °317 patent explains “will normally be
`
`dependent upon payments made for data stored on the datacarrier”(i.e.,
`allowing access when the data has been purchased). Ex. 1001, 9:17—-21.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`With respect to Amdocs, after generally summarizing that case, Patent
`
`Ownerconcludesthat “the challenged claims of the ’317 Patent are like the
`
`eligible claim in Amdocs because they solve a problem unique to computer
`
`. and use[] an unconventional technological approach.” Req.
`.
`networks .
`Reh’g 14-15 (citing PO Resp. 17, 39-40)®. We disagree.
`In Amdocs, the Court held that “[claim 1] is eligible under step two
`
`becauseit contains a sufficient ‘inventive concept.” Amdocs, 841 F.3d at
`1300. The claim at issue recited “computer code for using the accounting
`information with which the first network accounting record is correlated to
`
`enhancethe first network accounting record.” Jd. The Court explained that
`
`the “claim entails an unconventional technological solution (enhancing data
`
`in a distributed fashion) to a technological problem (massive record flows
`which previously required massive databases).” Id. The Court notedthat,
`although the solution requires generic computer components,“the claim’s
`
`enhancinglimitation necessarily requires that these generic components
`
`operate in an unconventional mannerto achieve an improvementin
`computerfunctionality.” Jd. at 1300-1301. When determiningthat the
`claim was patent-eligible, the Court explained that the “enhancing limitation
`necessarily involves the arguably generic gatherers, network devices, and
`other components working in an unconventionaldistributed fashion to solve
`a particular technological problem.” Jd. at 1301. The Court distinguished
`the claim from the claim held unpatentable in Content Extraction &
`
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed.
`
`Cir. 2014) on the groundsthat the “enhancinglimitation .
`
`.
`
`. necessarily
`
`8 ‘This is the only instance where one of Patent Owner’spapersis cited in
`the Request with respect to arguments directed to Amdocs.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`incorporatesthe invention’s distributed architecture—an architecture
`
`providing a technological solution to a technological problem,” which
`“provides the requisite ‘something more’ than the performanceof ‘well-
`understood, routine, [and] conventional activities previously knownto the
`
`industry.’” Jd. (citations omitted).
`Weare not persuaded that we misapprehended Amdocs. As noted in
`
`our Final Decision, “[t]he ’°317 patent treats as well-knownall potentially
`
`technical aspects of the challenged claims, which simply require generic
`
`computer components.” Final Dec. 15. Unlike the generic componentsat
`
`issue in Amdocs, the generic componentsrecited in claims 2-5, 9-11, 14, 15,
`
`17, and 19 of the ’317 patent do not operate in an unconventional mannerto
`
`achieve an improvementin computer functionality. See id. at 17-21. The
`challenged claims of the ’317 patent simply recite generic memories, data
`
`types, processors, and “code to” perform well-known functions with no
`
`description of the underlying implementation or programming. See id. at
`
`14-17.
`
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`
`reason to modify our Final Decision.
`
`ORDER
`
`Accordingly,it is:
`
`ORDEREDthat Patent Owner’s Requestis denied.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`PETITIONER:
`
`J. Steven Baughman
`Megan F. Raymond
`James R. Batchelder
`ROPES & GRAY LLP
`steven.baughman@ropesgray.com
`megan.raymond@ropesgray.com
`james.batchelder@ropesgray.com
`
`PATENT OWNER:
`
`Michael R. Casey
`Wayne Helge
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`smartflash-cbm@dbjg.com
`whelge@davidsonberquist.com
`
`
`
`ry
`
`aN
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 31
`Entered: November 7, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLEINC.,
`Petitioner,
`
`Vv.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00124
`Patent 7,942,317 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU,Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`35 US.C. § 328(a) and 37 CFR. § 42.73
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`INTRODUCTION
`
`A. Background
`AppleInc. (“Petitioner”), filed a Petition to institute covered business
`
`method patent review of claims 1-17 and 19 of U.S. Patent No. 7,942,317
`B2 (Ex. 1001, “the ’317 patent”) pursuant to § 18 ofthe Leahy-Smith
`America Invents Act (“AIA”). Paper 2 (“Pet.”).! Smartflash LLC (“Patent
`
`Owner”) filed a Preliminary Response. Paper 5 (“Prelim. Resp.”). On
`
`November10, 2015, we instituted a covered business method patent review
`
`(Paper 7,“Institution Decision”or “Inst. Dec.) based upon Petitioner’s
`
`assertion that claims 2—5, 9-11, 14, 15, 17, and 19 (“the challenged claims”)
`
`are directed to patent ineligible subject matter under 35 U.S.C. § 101 and
`
`claim 19 as being indefinite under 35 U.S.C. § 112, second paragraph. Inst.
`
`Dec. 25. Becausea final written decision determining that claims 1, 6-8, 12,
`
`13, and 16 of the ’317 patent are unpatentable under § 103 had already
`
`issued in CBM2014-00112, we declinedto institute a review of claims 1, 6—
`
`8, 12, 13, and 16 in this proceeding. Jd. at 6—7.
`
`Subsequent to institution, Patent Ownerfiled a Patent Owner
`
`Response (Paper 17, “PO Resp.”) and Petitioner filed a Reply (Paper 21,
`
`“Pet. Reply”) to Patent Owner’s Response.
`
`Patent Owner, with authorization, filed a Notice of Supplemental
`
`Authority. Paper 28 (“Notice”). Petitioner filed a Response to Patent
`
`Owner’s Notice. Paper 29 (“Notice Resp.”).
`
`Weheld a joint hearing of this case and several other related cases on
`
`July 18, 2016. Paper 30 (Tr.”).
`
`' Pub. L. No. 112-29, 125 Stat. 284, 296-07 (2011).
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`Wehavejurisdiction under 35 U.S.C. § 6(c). This Final Written
`
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`
`For the reasonsthat follow, we determine that Petitioner has shown bya
`
`preponderanceofthe evidencethat claims 2-5, 9-11, 14, 15, 17, and 19 of
`
`the ’317 patent are directed to patent ineligible subject matter under
`
`35 U.S.C. § 101. We also determinethat claim 19 is indefinite under
`
`35 U.S.C. § 112.
`
`B. Related Matters
`
`Theparties indicate that the 317 patentis the subject of the following
`
`district court cases: Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145
`
`(E.D. Tex.); Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D.
`Tex.); Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D.Tex.);
`Smartflash LLC vy. Samsung Electronics Co. Ltd., Case No. 6:13-cv-448
`(E.D. Tex.); and Smartflash LLC v. Amazon.Com, Inc., Case No. 6:14-cv-
`
`992 (E.D. Tex.). Pet. 2, 32-33; Paper 4, 4—5.
`
`Wehaveissued a previous Final Written Decision in a review
`challenging the ’317 patent. In CBM2014-00112,’ we foundclaims1, 6-8,
`
`12, 13, 16, and 18 unpatentable under 35 U.S.C. § 103. Apple Inc. v.
`
`Smartflash LLC, Case CBM2014-00112, (PTAB Sept. 25, 2015) (Paper 48,
`
`29). In CBM2015-00018, we terminated review of claim 18 before issuing a
`
`Final Written Decision. Apple Inc. v. Smartflash LLC, Case CBM2015-
`
`00018, (PTAB March 18, 2016) (Paper 46, 2-3). In CBM2015-00129, we
`
`terminated review of claims 7 and 12 before issuing a Final Written
`
`2 Case CBM2014-00113 was consolidated with the CBM2014-00112
`proceeding.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`Decision. Google Inc. v. Smartflash LLC, Case CBM2015-00129, (PTAB
`
`April 26, 2016) (Paper 25, 2-3).
`
`C. The ’317 Patent
`
`The °317 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing accessto data to be
`stored,” and the “corresponding methods and computer programs.”
`
`Ex. 1001, 1:18-23. Owners of proprietary data, especially audio recordings,
`
`have an urgent need to address the prevalenceof“data pirates,” who make
`proprietary data available over the internet without authorization. Jd. at
`1:38-51. The ’317 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:55—2:3. This combination allows data owners to make their data
`
`available over the internet without fear of data pirates. Jd. at 2:3-11.
`
`As described, the portable data storage device is connected to a
`
`terminal for internet access. Jd. at 1:55—63. The terminal reads payment
`
`information, validates that information, and downloads datainto the portable
`
`storage device from a data supplier. Jd. The data on the portable storage
`device can be retrieved and output from a mobile device. Jd. at 1:64-67.
`
`The *317 patent makes clear that the actual implementation of these
`componentsis not critical and the alleged invention may be implementedin
`many ways. See, e.g., id. at 25:49-52 (“The skilled person will understand
`that many variants to the system are possible and the invention is not limited
`
`to the described embodiments.”).
`
`D. Challenged Claims
`The claims under review are claims 2—5, 9-11, 14, 15, 17, and 19 of
`
`the °317 patent. Inst. Dec. 25. Of the challenged claims, claims 17 and 19
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`are independent. Claims 2—5 depend,directly or indirectly, from
`independentclaim 1 (not a part of this review). Claims 9-11 depend,
`directly or indirectly, from independent claim 8 (not a part ofthis review).
`Claims 14 and 15 depend,directly or indirectly, from independent claim 12
`(not a part of this review). Independent claims 17 and 19 areillustrative and
`
`recite the following:
`
`17. Acomputer system for providing data to a data requester,
`the system comprising:
`a communication interface;
`a data access data store for storing records of data items
`available from the system, each record comprising a data item
`description and location data identifying an electronic address
`for a provider for the data item;
`a program store storing code implementable by a
`processor;
`a processor coupled to the communicationsinterface, to
`the data access data store, and to the program store for
`implementing the stored code, the code comprising:
`code to receive a request for a data item from the
`requester:,
`code to receive from the communicationsinterface
`payment data comprising data relating to paymentfor the
`requested data item;
`code responsive to the request andto the received
`paymentdata to outputthe item data to the requester over the
`communication interface; wherein
`said data access data store further comprises data item
`accessrule data for output to the requester with a said data item;
`and
`
`further comprising codeto select access rule data for
`output with a data item in response to said paymentdata.
`
`19. A method of providing data to a data requester
`comprising:
`receiving a request for a data item from the requester;
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`receiving payment data from the requesterrelating to
`paymentfor the requested data;
`transmitting the requested data to the requester; and
`transmitting data access rule data to requester with the
`read data.
`
`ANALYSIS
`
`A. Claim Construction
`In a covered business method patent review, claim terms are given
`their broadest reasonableinterpretation in light of the specification in which
`
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`of the *317 patent accordingto their ordinary and customary meaningin the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposesof this Decision, we
`
`need not construe expressly any claim term.
`
`B. Statutory Subject Matter
`The Petition challenges claims 2-5, 9-11, 14, 15, 17, and 19 as
`
`directed to patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 38—
`73. Accordingto the Petition, the challenged claims are directed to an
`abstract idea without additional elements that transform the claimsinto a
`
`patent-eligible application of that idea. Jd. Petitioner submits a declaration
`from Dr. John P.J. Kelly in support ofits Petition.? Ex. 1017. Patent
`Ownerargues that the challenged claimsare statutory because they are
`
`3 In its Response, Patent Owner arguesthat Dr. Kelly’s declaration should be
`givenlittle or no weight. PO Resp. 5-16. Because Patent Ownerhas filed a
`Motion to Exclude (Paper 24)that includes a request to exclude Dr. Kelly’s
`Declaration in its entirety, or in the alternative, portions of the declaration
`based on essentially the same argument, we address Patent Owner’s
`argumentas part of our analysis of the motion to exclude, below.
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`“rooted in computer technology in order to overcome a problem specifically
`
`arising in the realm of computer networks,””that of “data content piracy on
`
`the Internet.” PO Resp. 2 (citation omitted).
`
`1. Abstract Idea
`
`Under35 U.S.C. § 101, we mustfirst identify whether an invention
`
`fits within one of the four statutorily provided categories of patent-
`
`eligibility: “processes, machines, manufactures, and compositions of
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713-714 (Fed. Cir.
`
`2014). Here, each of the challenged claimsrecites a “machine,”i.e., a
`
`“computer system”(claims 2-5, 17), a “data access system”(claims 14 and
`
`15), or a “process,”i.e., a “method” (claims 9-11, 19), under § 101. Section
`
`101, however, “contains an important implicit exception [to subject matter
`
`eligibility]: Laws of nature, natural phenomena,andabstract ideas are not
`
`patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347, 2354
`
`(2014)(citing Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 133
`
`S. Ct. 2107, 2116 (2013) (internal quotation marks and brackets omitted)).
`
`In Alice, the Supreme Court reiterated the framework set forth previously in
`
`Mayo Collaborative Services v. Prometheus Laboratories, 132 S. Ct. 1289,
`
`1293 (2012) “for distinguishing patents that claim lawsofnature, natural
`
`phenomena,and abstract ideas from those that claim patent-eligible
`
`applications of these concepts.” Alice, 134 S. Ct. at 2355. Thefirst step in
`
`the analysis is to “determine whetherthe claimsat issue are directed to one
`
`of those patent-ineligible concepts.” Jd.
`
`According to the Federal Circuit, “determining whether the section
`
`101 exception for abstract ideas applies involves distinguishing between
`
`patents that claim the building blocks ofhuman ingenuity—and therefore
`
`
`
`CBM2015-00124
`Patent7,942,317 B2
`
`risk broad pre-emption of basic ideas—andpatents that integrate those
`
`building blocks into something more, enough to transform them into specific
`
`patent-eligible inventions.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
`
`F.3d 1306, 1332 (Fed. Cir. 2015) (emphasis added); accord id. at 1333-34
`
`(“It is a building block, a basic conceptualframework for organizing
`
`information ... .” (emphasis added)). This is similar to the Supreme Court’s
`
`formulation in Bilski v. Kappos, 561 U.S. 593, 611 (2010) (emphasis added),
`
`noting that the concept of risk hedgingis “afundamental economic practice
`
`long prevalent in our system of commerce.” See also buySAFE,Inc.v.
`
`Google, Inc., 765 F.3d 1350, 1353-55 (Fed. Cir. 2014)(stating that patent
`
`claimsrelated to “long-familiar commercial transactions” and relationships
`
`(i.e., business methods), no matter how “narrow”or “particular,” are
`
`directed to abstract ideas as a matter of law). As a further example, the
`
`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
`
`Circuit].” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
`
`Cir. 2015) (citations omitted).
`
`Petitioner argues that the challenged claimsare directed to the abstract
`
`idea of “paymentfor and controlling access to data.” Pet. 38. Specifically,
`
`Petitioner contends that the challenged claims are “drawn to the concept of
`
`paymentfor data, reciting steps and ‘code to,’ e.g., transmit or forward data
`
`after payment” and that every challenged claims expressly recites
`
`““nayment.’” Id. at 42.
`
`Weare persuadedthat the challenged claims are drawn to a patent-
`
`ineligible abstract idea. Specifically, the challenged claimsare directed to
`
`performing the fundamental economicpractice of conditioning and
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`controlling access to content based on payment. For example, claim 17
`
`recites “code responsive to the request and to the received payment data to
`
`output the item data to the requester” and “codeto select access rule data for
`output with a data item in response to said payment data.” Claim 19 recites
`
`“receiving payment data from the requester relating to paymentfor the
`
`requested data.”
`
`As discussed above, the ’317 patent discusses addressing recording
`
`industry concemsofdata pirates offering unauthorized access to widely
`
`available compressed audio recordings. Ex. 1001, 1:27-51. The °317 patent
`
`proposesto solve this problem byrestricting access to data on a device based
`
`uponsatisfaction of use rules linked to payment data. Jd. at 9:4-22. The
`
`317 patent makesclear that the heart of the claimed subject matter is
`
`restricting access to stored data based on supplier-defined access rules and
`
`paymentdata. Jd. at 1:55-2:11, Abstract.
`
`Althoughthe specification refers to data piracy on the Internet, the
`challenged claims are not limited to the Internet. The underlying concept of
`
`the challenged claims, particularly when viewedin light ofthe specification,
`
`is paying for and/or controlling access to content, as Petitioner contends. As
`
`discussed further below,this is a fundamental economic practice long in
`
`existence in commerce. See Bilski, 561 U.S. at 611.
`
`Patent Ownerarguesthat the challenged claimsare not directed to an
`
`abstract idea. Patent Ownerasserts that claims 2-5, 14, 15, and 17 are
`
`“patent eligible because they are directed to real-world computer systems
`
`and data access systemsthat are machines with specialized physical
`
`componentsthat allow a data item to be transmitted after paymentdata is
`
`received and/or validated.” PO Resp. 25. Specifically, Patent Owner argues
`
`
`
`CBM2015-00124
`Patent 7,942,317 B2
`
`that claims 2—5 and 17 are directed to “machines comprised of various
`
`structural components - a computer system with specifically defined
`
`elements” (id. at 20), and that claims 14 and 15 are “directed to a data access
`
`system, which is a machine”(id. at 21). Patent Ownerfurther contendsthat
`
`that claims 9-11 and 19 are “patent eligible because they are directed to
`
`real-world useful processes for the purchase and transmission of data with
`
`data accessrules data to allow for authorized use of the data.” Jd. at 25.
`
`Specifically, Patent Owner contends that these claims are “directed to
`
`processes (methods) with specifically defined elements as steps.” Jd. at 22.
`
`Patent Owner, however,cites no controlling authority to support the
`
`proposition that subject matter is patent-eligible as longasit is directed to
`
`“machines with specialized physical components”or “real-world useful
`
`processes.” PO Resp. 25. AsPetitioner correctly points out (Pet. Reply 2—
`
`3), that argumentis contradicted by well-established precedent:
`
`Thereis no dispute that a computeris a tangible system (in § 101
`terms, a “machine”), or that many computer-implemented claims
`are formally addressed to patent-eligible subject matter. But if
`that were the end of the § 101 inquiry, an applicant could claim
`any principle of the physical or social sciences by reciting a
`computer system configured to implementthe relevant concept.
`Such a result would makethe determination ofpatent eligibility
`“depend simply on the draftman’s art,” ... thereby eviscerating
`the rule that “‘... abstract ideas are not patentable.’”
`
`Alice, 134 S. Ct. at 2358-59 (internal citations omitted).
`
`Patent Owneralso argues that the challenged claimsare like those
`found not to be directed to an abstract idea in Google Inc. v. Network-1
`Technologies, Inc., CBM2015-00113, and in Hulu, LLC v. iMTX Strategic,
`
`LLC, CBM2015-00147. PO Resp. 22—23. These decisions are non-
`
`precedential and distinguishable. In CBM2015-00113, the panel’s
`
`10
`
`
`
`CBM2015-00
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
