throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 7
`Entered: March 30, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`SAMSUNG ELECTRONICS AMERICA, INC. and
`
`SAMSUNG ELECTRONICS CO., LTD.,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`CB’M2014-00198
`
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`
`MATTHEW R. CLEMENTS, and PETER P. CHEN,
`
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`DECISION
`
`Denying Institution of Covered Business Method Patent Review
`37 CFR. § 42.208 .
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`A. Background
`
`INTRODUCTION
`
`Samsung Electronics America, Inc. and Samsung Electronics Co.,
`
`Ltd. (“Petitioner”)1 filed a Petition requesting covered business method
`
`- patent review of claim 7 (the “challenged claim”) of US. Patent No.
`
`8,061,598 (Ex. 1001, “the ’598 patent”) pursuant to § 18 of the Leahy-Smith
`
`America Invents Act (“AIA”).2 Paper 2 (“Pet”). Smartflash LLC (“Patent ‘
`
`Owner”) filed a Preliminary Response. Paper 5 (“Prelim. Resp”). We have
`
`jurisdiction under 35 U.S.C. § 324, which provides that a covered business
`
`method patent review may not be instituted “unless .
`it is more likely than
`not that at least 1 of the claims challenged in the petition is unpatentable.”
`After considering the Petition and Preliminary Response, we
`1
`
`determine that the ’598 patent is a covered business method patent, but that
`
`Petitioner has not demonstrated that it is more likely than not that the
`
`challenged claim is unpatentable. Accordingly, we deny institution of a
`
`covered business method patent review of claim 7 of the ’598 patent.
`
`B. Asserted Grounds
`
`Petitioner contends that claim 7 is unpatentable under 35 U.S.C.
`
`§ 102(b) as anticipated by Ginter.3 Pet. 3. Petitioner also provides a
`
`declaration from Jeffrey A. Bloom, Ph.D (“the Bloom Declaration”). Ex.
`
`1 1003.
`
`‘
`
`1 Samsung Telecommunications America, LLC is listed as a real party-in—
`interest in the Petition, but merged with and into Samsung Electronics
`America, Inc., after the filing of the Petition. Paper 6, 1.
`
`2 Pub. L. No. 112-29, 125 Stat. 284, 296—07 (2011)
`
`3 US. Patent No. 5,915,019 (Ex. 1023) (“Ginter”);
`
`

`

`’CBM2014-00198
`
`Patent 8,061,598 B2
`
`C. Related Matters
`
`The parties indicate that the ’598 patent is the subject of the following
`
`district court cases: Smanflash LLC v. Apple Inc., Case No. 6:13-cv-447
`
`(E.D. Tex.); Smart/lash LLC v. Samsung Electronics Co., Case No. 6:13-cv—
`
`.448 (ED. Tex.). Pet. 1; Paper 4, 2-3. Patent Owner also indicatesthat the
`
`’598 patent is the subject of a third district court case: Smartflash LLC v.
`
`Google, Inc., Case No. 6:14-cv-435 (ED. Tex.). Paper 4, 3. Patents
`
`claiming priority back to a common series of applications are currently the
`
`subject of CBM2014-00102, CBM2014-00106, CBM2014-00108, and
`
`CBM2014—00112, filed by Apple Inc. See Paper 4, 2—3.
`Petitioner'filed a concurrent petition for covered business method
`
`patent review of the ’598 patent: CBM2014-00193 (“the 193 Petition”).4 In
`
`addition, Petitioner filed eight other Petitions for covered business method
`
`patent review challenging claims of other patents owned by Patent Owner
`
`and disclosing similar subject matter: CBM2014-00190; CBM2014-00192;
`
`CBM2014-00194; CBM2014-00196; CBM2014-00197; CBM2014-00199;
`
`CBM2014-00200; and CBM2014-00204. .1
`
`D. The ’598 Patent
`
`The ’598 patent relates to “a portable data carrier for storing and
`
`paying for data and to computer systems for providing access to data to be
`
`stored” and the “corresponding methods and computer programs.”
`
`Ex. 1001, 1:21—25. Owners of proprietary data, especially audio recordings,
`
`4 Patent Owner argues that the multiple petitions filed against the ’598 patent
`violate the page limit requirement of 37 C.F.R. § 42.24(a)(iii), but does not
`cite any authority to support its position. Prelim. Resp. 9—12. The page
`limit for a petition requesting covered business method patent review is 80
`pages (37 C.F.R. § 42.24(a)(iii)), and each of this Petition and the 193
`Petition meets that requirement.
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`have an urgent need to address the prevalence of “data pirates” who make
`
`proprietary data available over the intemet! without authorization. Id. at
`
`1:29—55. The ’598 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:59—2‘: 1 1. This combination allows. data owners to make their data
`
`available over the intemet without fear of data pirates. Id. at 2:11—15.
`
`As described, the portable data storage device is connected to a
`
`terminal for internet access. Id. at 1:59—67: The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`storage device from a data supplier. Id. The data on the portable storage
`
`device can be retrieved and output from a mobile device. Id. at 2: 1—5. The
`
`’598 patent makes clear that the actual implementation of these components
`
`is not critical, and the alleged invention may be implemented in 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”).
`
`E. Challenged Claim-
`
`Petitioner challenges claim 7 of the ’598 patent. Claim 7 depends
`
`from claim 1. Claims 1 and 7 recite the following:
`
`1.
`
`A portable data carrier comprising:
`
`an interface for reading and writing data from and to the portable data
`carrier;
`
`content data memory, coupled to the interface, for storing one or more
`content data items on the carrier;
`
`use rule memory to store one or more use rules for said one or more
`content data items;
`
`a program store storing code implementable by a processor;
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`and a processor coupled to the content data memory, the use rule
`memory, the interface and to the program store for implementing
`code in the program store,
`
`wherein the code comprises code for storing at least One content data
`item in the content data memory and at least one use rule in the use
`rule memory.
`
`Ex. 1001, 25:54—67.
`
`A portable data carrier as claimed in claim 1, further
`7.
`comprising payment data memory to store payment data and code to
`provide the payment data to a payment validation system.
`
`Id. at 26:25—28.
`
`ANALYSIS
`
`A. Claim Construction
`
`In a covered business method patent review, claim terms are given
`
`their broadest reasonable interpretation in light of the specification in which
`
`they appear and the understanding of others skilled in the relevant art. See
`
`37 CPR. § 42.300(b); see also In re Cuozzo Speed Techs., LLC, 2015 WL
`
`448667 at *7 (Fed. Cir. Feb. 4, 2015) (“We conclude that Congress
`
`implicitly adopted the broadest reasonable interpretation standard in
`
`enacting the AIA.”). Applying that standard, we interpret the claim terms of
`
`the ’598 patent according to their ordinary and customary meaning in the
`
`context of the patent’s written description. See In re Translogz'c Tech, Inc,
`
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this decision, we
`
`construe the claim term “use rule.”
`
`The term .“use rule” is recited in independent claim 1. Neither party
`
`proposes a construction of “use rule.” The ’598 patent describes “use rules”
`
`as “for controlling access to the stored content” (Ex. 1001, Abstract) andlas
`
`“indicating permissible use of data stored on the carrier”'(id. at 9:14-16).
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`The ’598 patent also describes “evaluating the use status data using the use
`
`rules to determine whether access to the stored data is permitted.” Id. at
`
`6:3 8-40, see also id. at 21:48-53 (“[E]ach content data item has an
`
`associated use rule to specify under what conditions a user of the smart Flash
`
`card is allowed access to the content data item”). Accordingly, for purposes
`
`of this decision, we construe “use rule” as a rule specifying a condition
`
`under which access to content is permitted.
`
`B. Covered Business Method Patent
`
`Section 18 of the ALA provides for the creation of a transitional
`
`program for reviewing covered business method patents. ‘A “covered
`
`business method patent” is a patent that “claims a method or corresponding
`
`apparatus for performing data processing or other operations used in the
`
`practice, administration, or management of a financial product or service,
`
`except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); see 37 CPR. § 42.301(a). A patent need have only one .
`
`claim directed to a covered business method to be eligible for review. See
`
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule,
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`
`1. Financial Product or Service
`
`Petitioner asserts that “the purported data carrier and payment
`
`validation system of claim 7 unquestionably are used for data processing in
`
`the practice, administration and management of financial products and
`
`services; specifically, for processing payments for data downloads.” Pet. 8.
`
`Based on this record, we agree with Petitioner that the subject matter recited
`
`by claim 7 is directed to activities that are financial in nature, namely, data
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`access conditioned on payment validation. Claim 7 recites “payment data
`
`I memory to store payment data and code. to provide the payment data to a
`
`payment validation system.” We are persuaded that payment validation is a
`
`financial activity, and conditioning data access based on payment validation
`
`amounts to a financial service. This is consistent with the Specification of
`
`the ’598 patent, which confirms claim 7’s. connection to financial activities
`
`by stating that the invention “relates to a portable data carrier for storing and
`
`paying for data.” Ex. 1001, 1:21—23. The Specification also states
`
`repeatedly that the disclosed invention involves managing access to data
`
`based on payment validation. See, e. g, Ex. 1001, 1:59—67; 6:60—64; 20:50—
`
`54.
`
`8
`
`Patent Owner disagrees that Claim 7 satisfies the financial-in—nature
`
`requirement of AIA § 18(d)(1), arguing that section should be interpreted
`
`narrowly to cover only technology used specifically in the financial or
`
`banking industry. Prelim. Resp. 347. Patent Owner cites to various portions
`of the legislative history as support for its proposedinterpretation. Id.
`
`8
`
`Although we agree with Patent Owner that the statutory language
`
`controls whether a patent'is eligible for a covered business method patent
`review, we do not agree that the phrase “financial product or service” is as
`
`limited as Patent Owner proposes. The AIA does not include as a
`
`prerequisite for covered business method patent review, a “nexus” to a
`
`“financial business,” but rather a “method or corresponding apparatus for
`
`performing data processing or other operations used in the practice,
`
`administration, or management of- a financial product or service.” AIA
`
`§ 18(d)(l). Further, contrary to Patent Owner’s view of the legislative
`
`history, the legislative history indicates that the phrase “financial product or
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`service” is not limited to the products or services of the “financial services-
`
`industry,” and is to be interpreted broadly. CBM Rules, 77 Fed. Reg. at
`
`48,735—36. For example, the “legislative history explains that the definition
`
`of covered business method patent was drafted to encompass patents
`
`‘claiming activities that are financial in nature, incidental to a financial
`
`activity or complementary to a financial activity.’” 1d. (citing 157 Cong.
`Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`‘
`
`In addition, Patent Owner asserts that claim 7 is not directed to an
`
`apparatus or method that is financial in nature because claim 7 “omits the
`
`specifics of how payment is made.” Prelim. Resp. 7. We are not persuaded
`
`by this argument because § 18(d)(1-) of the AIA does not include such a
`requirement, nor does Patent Owner point to any other authority that makes
`
`such a requirement. Prelim. Resp. 7. We determine that because payment is
`
`required by claim 7, as Patent Owner acknowledges, the financial in nature
`
`requirement of § 18(d)(1) is satisfied.
`
`For the reasons stated above, and based on the particular facts of this
`
`proceeding, we conclude that the ’598 patent includes at least one claim that
`
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`
`Petitioner asserts that claim 7 does not fall within § 18(d)(‘1)’s
`
`exclusion for “technological inventions.” Pet. 10—12. In particular,
`
`Petitioner argues that claim 7 does not recite a technological feature that is
`
`novel and unobvious, or solve a technical problem using a technical solution.
`
`Id. Patent Owner disagrees and argues that claim 7, as a whole, recites at
`
`least one technological feature that is novel and unobvious over the'prior art.
`
`Prelim. Resp. 8—9.
`
`'
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`We are persuaded that claim 7 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. For
`
`example, claim 1, on which claim 7 depends, recites only limitations such as
`39 CC
`77 6‘
`” ‘6
`
`“interface,
`content data memory,
`use rule memory,
`program store,”
`“processor,” “code for storing,” and “code to provide” data, which are not
`
`novel and unobvious. Claim 7 also recites a “payment validation system.”
`
`The Specification, however, discloses that the required payment validation
`
`system may be one that is already in use or otherwise commercially
`
`available. For example, “[t]he payment validation system may be part of the
`
`data supplier’s computer systems or it may be a separate e-payment system.”
`
`Ex. 1001, 8:63—65; see also id at 13:35—47.
`
`In addition, the ”598 patent makes clear that the asserted novelty of
`
`the invention is not in any specific improvement of software or hardware,
`
`but in the method of controlling access to data. For example, the ’598 patent
`states that “there is an urgent need to find a way to address the problem of
`
`data piracy” (id. at 1:52—55), while acknowledging that the “physical
`
`embodiment of the system is not critical and a skilled person will understand
`
`that the terminals, data processing systems and the like can all take a variety
`
`of forms” (id. at 12:29—32). Thus, we determine that claim 7 is merely the
`
`recitation of a combination of known technologies, which indicates that it is
`
`not a patent for a technological invention. See Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).
`
`Patent Owner also argues that claim 7 falls within § 18(d)(1)’s
`
`exclusion for “technological inventions” because it is directed toward
`
`solving the technological problem of “storing at least one content data item
`
`in the content data memory and at least one use rule in the use rule memory”
`
`

`

`CBM2014—00198
`
`Patent 8,061,598 B2
`
`with the technological solution of “code for storing at least one content data
`
`item in the content data memory and at least one use rule in the use rule
`
`memory.” Prelim. Resp. 8. We are not persuaded by this argument because,
`
`as Petitioner argues, the problem being solved by claim 7 is a business
`
`problem—data piracy. Pet. 11. For example, the Specification states that
`
`“[b]inding the data access and payment together allows the legitimate
`
`owners of the data to make the data available themselves over the internet
`
`without fear of loss of revenue, thus undermining the position of data
`pirates.” Ex. 1001, 2:11—15. Thus, based on the particular facts of this
`
`proceeding, we conclude that claim 7 does not recite a technological
`
`invention and is eligible for a covered business method patent review.
`
`3. Conclusion
`
`In View of the foregoing, we conclude that the ’598 patent is a covered
`
`business method patent under AIA § 18(d)(1) and is eligible for review
`
`using the transitional covered business method patent program.
`
`C. Anticipation by Ginter
`
`Petitioner argues that claim 7 is unpatentable under 35 U.S.C.
`
`§ 102(b) as anticipated by Ginter. Pet. 15—37. Ginter discloses a portable
`
`“virtual distribution environment” (“VDE”) that can “control and/or meter or
`
`otherwise monitor use of electronically stored or disseminated information.”
`
`Ex. 1015, Abstract, Fig. 71, 52:26—27."
`
`In light of the arguments and evidence, Petitioner has not established
`
`that it is more likely than not that claim 7 is unpatentable as anticipated by
`
`Ginter. Specifically, we are not persuaded that Petitioner has shown
`
`sufficiently that Ginter discloses “use rules.”
`
`10
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`Petitioner identifies in a parenthetical Ginter’s “billing method MDE
`and/or budget method UDE” as the recited “use rules.” Pet. 31-32 (citing
`
`Fig. 71, 48:65—49:14, 63:34—41, 169:4—6). The cited portions of Ginter,
`
`however, do not show sufficiently that the billing method map MDE and/or
`
`budget method UDE reflects “a rule specifying a condition under which
`
`access to content is permitted,” as we construed “use rules” to mean above.
`
`Petitioner later cites additional portions of Ginter in connection with “code
`
`for storing .
`
`.
`
`. at least one use rule in the use rule memory.” Pet. 33—35.
`
`However, the examples in the cited portions of Ginter—“e.g., a price list,
`
`table, or parameters to the billing amount calculation algorithm”——relate to
`
`billing for use of a VDE content object, but not to “a rule specifying a
`
`condition under which access to content is permitted.” Ex. 1015, 190:45—57.
`
`Dr. Bloom’s conclusory testimony on this issue (EX. 1003 1] 48) does not
`
`convince us otherwise.
`
`On this record, we are not persuaded that Petitioner has established
`
`that it is more likely than not that claim 7 is unpatentable as anticipated by
`
`Ginter.
`
`CONCLUSION
`
`For the foregoing reasons, we determine that the information
`
`presented in the Petition does not establish that it is more likely than not that
`
`Petitioner would prevail in establishing the unpatentability of claim 7 of the
`
`’598 patent.
`
`For the reasons given, it is:
`
`ORDER
`
`ORDERED that the Petition for covered business method review of
`
`the ’598 patent is denied.
`
`11
`
`

`

`CBM2014-00198
`
`Patent 8,061,598 B2
`
`PETITIONER:
`
`W. Karl Renner
`
`Thomas Rozylowicz
`FISH & RICHARDSON P.C.
`
`CBM3 9843-0006CP2@fr.com
`
`PATENT OWNER:
`
`Michael R. Casey
`J. Scott Davidson
`
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`mcasey@dbj g.com
`isd@dbj g.com
`docket@dbjb.com
`
`\
`
`12
`
`

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