`
`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.
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`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
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`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
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`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
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`“rooted in computer technology in order to overcome a problem specifically
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`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-
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`eligibility: “processes, machines, manufactures, and compositions of
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`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713-714 (Fed. Cir.
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`2014). Here, each of the challenged claimsrecites a “machine,”i.e., a
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`“computer system”(claims 2-5, 17), a “data access system”(claims 14 and
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`15), or a “process,”i.e., a “method” (claims 9-11, 19), under § 101. Section
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`101, however, “contains an important implicit exception [to subject matter
`
`eligibility]: Laws of nature, natural phenomena,andabstract ideas are not
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`patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347, 2354
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`(2014)(citing Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 133
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`S. Ct. 2107, 2116 (2013) (internal quotation marks and brackets omitted)).
`
`In Alice, the Supreme Court reiterated the framework set forth previously in
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`Mayo Collaborative Services v. Prometheus Laboratories, 132 S. Ct. 1289,
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`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
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`101 exception for abstract ideas applies involves distinguishing between
`
`patents that claim the building blocks ofhuman ingenuity—and therefore
`
`
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`CBM2015-00124
`Patent7,942,317 B2
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`risk broad pre-emption of basic ideas—andpatents that integrate those
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`building blocks into something more, enough to transform them into specific
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`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
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`claimsrelated to “long-familiar commercial transactions” and relationships
`
`(i.e., business methods), no matter how “narrow”or “particular,” are
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`directed to abstract ideas as a matter of law). As a further example, the
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`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
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`Circuit].” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
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`Cir. 2015) (citations omitted).
`
`Petitioner argues that the challenged claimsare directed to the abstract
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`idea of “paymentfor and controlling access to data.” Pet. 38. Specifically,
`
`Petitioner contends that the challenged claims are “drawn to the concept of
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`paymentfor data, reciting steps and ‘code to,’ e.g., transmit or forward data
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`after payment” and that every challenged claims expressly recites
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`““nayment.’” Id. at 42.
`
`Weare persuadedthat the challenged claims are drawn to a patent-
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`ineligible abstract idea. Specifically, the challenged claimsare directed to
`
`performing the fundamental economicpractice of conditioning and
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`
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`CBM2015-00124
`Patent 7,942,317 B2
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`controlling access to content based on payment. For example, claim 17
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`recites “code responsive to the request and to the received payment data to
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`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
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`“receiving payment data from the requester relating to paymentfor the
`
`requested data.”
`
`As discussed above, the ’317 patent discusses addressing recording
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`industry concemsofdata pirates offering unauthorized access to widely
`
`available compressed audio recordings. Ex. 1001, 1:27-51. The °317 patent
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`proposesto solve this problem byrestricting access to data on a device based
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`uponsatisfaction of use rules linked to payment data. Jd. at 9:4-22. The
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`317 patent makesclear that the heart of the claimed subject matter is
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`restricting access to stored data based on supplier-defined access rules and
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`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
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`the challenged claims, particularly when viewedin light ofthe specification,
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`is paying for and/or controlling access to content, as Petitioner contends. As
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`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
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`“patent eligible because they are directed to real-world computer systems
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`and data access systemsthat are machines with specialized physical
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`componentsthat allow a data item to be transmitted after paymentdata is
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`received and/or validated.” PO Resp. 25. Specifically, Patent Owner argues
`
`
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`CBM2015-00124
`Patent 7,942,317 B2
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`that claims 2—5 and 17 are directed to “machines comprised of various
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`structural components - a computer system with specifically defined
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`elements” (id. at 20), and that claims 14 and 15 are “directed to a data access
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`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
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`real-world useful processes for the purchase and transmission of data with
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`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.
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`Patent Owner, however,cites no controlling authority to support the
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`proposition that subject matter is patent-eligible as longasit is directed to
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`“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,
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`LLC, CBM2015-00147. PO Resp. 22—23. These decisions are non-
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`precedential and distinguishable. In CBM2015-00113, the panel’s
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`10
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`CBM2015-00