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`UNITED STATES PATENT AND~TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Parent Owner.
`
`Case CBM2015-00017
`
`Patent 8,061,598 B2
`
`ae-3mamI
`
`I
`
`3 ,
`2'55:
`531:;
`
`a:
`
`E2,
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`

`

`Notice is hereby given, pursuant to 37 C.F.R. § 90.2(a), that Patent Owner
`
`Smartflash LLC hereby appeals to the United States Court of Appeals for the
`
`Federal Circuit from the Final Written Decision entered on March 30, 2016 (Paper
`
`46), the Decision Denying Requestfor Rehearing entered. on June 10, 2016 (Paper
`
`49) and from all underlying orders, decisions, rulings and opinions regarding U.S.
`
`Patcnt No. 8,061,598 (“the ’598 Patent”) including the Decision - Institution of
`
`Covered Business Method Patent Review entered on April 10, 2015 (Paper 22).
`
`For the limited purpose of providing the Director with the information
`
`requested in 37 C.F.R. § 90.2(a)(3)(ii), Patent Owner anticipates that the issues on
`
`appeal may include the following, as well as any underlying findings,
`
`determinations, rulings, decisions, opinions, or other related issues:
`
`0 Whether theBoard erred in finding that claims 1, 2, 15 and 31 of the
`
`’598 Patent are unpatentable under 35 U.S.C. § 101 ;
`
`0 Whether the Board erred in denying in part Patent Owner’s Motion to
`
`Exclude (Paper 38); and
`
`0 Whether the Board erred in finding that the subject matter of the ‘598
`
`Patent is directed to activities that are financial in nature and in
`
`instituting Covered Business Method review of the ‘598 Patent.
`
`

`

`Copies of this Notice of Appeal 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 fee may be charged to Deposit Account No. 501860.
`
`Dated: August 9, 2016
`
`/ Michael R. Casey/
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Dr., Suite 500
`
`McLean, VA 22102
`Telephone: (571) 765—7700
`Fax : (571) 765-7200
`Email: mcasey@dbjg.com
`
`

`

`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S NOTICE
`OF APPEAL was filed with the Patent Trial and Appeal Board using the E2E
`System and was served, by agreement of the parties, by emailing copies to counsel
`for the Petitioner as follows:
`
`I. Steven Baughman (steven.baughman@ropesgray.com)
`James R. Batchelder (james.batchelder@ropesgray.com)
`Megan Raymond (megan.raymond@ropesgray.com
`ApplePTAB Service- SmartF 1ash@ropesgray.com
`
`The undersigned hereby further certifies that on August 9, 2016 this
`PATENT OWNER’S NOTICE OF APPEAL (and its 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 US. Patent and Trademark
`Office via in-hand delivery as follows:
`
`Director of the United States Patent and Trademark Office
`
`c/o Office of the (jeneral Counsel
`
`Madison Building East, 10B20
`600 I )nlaney Street
`
`Alexandria, VA 22314-5793
`
`Dated: August 9, 2016
`
`LMEhflel 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.govi
`Tel: 571-272-7822
`
`Paper 49
`Entered: June 10, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,1
`
`Petitioner,
`
`V.
`
`SMARTFLASl-I LLC,
`
`Patent Owner.
`
`Case CBM2015-00017
`
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`
`JEREMY M. PLENZLER, and MATTHEW R. CLEIVIENTS,
`
`Administrative Patent Judges.
`
`CLEIVIENTS, Administrative Patent Judge.
`
`DECISION
`
`Denying Patent Owner’s Request for Rehearing
`37 CFR. § 42. 71
`
`1 Apple has been dismissed as a Petitioner. Paper 49, 8.
`
`

`

`CBM2015—00017
`
`Patent 8,061,598 B2
`
`INTRODUCTION
`
`Apple Inc. (“Petitioner”), filed a Corrected Petition to institute
`
`covered business method patent review of claims 1, 2, 7, 15, and 31 of US.
`
`Patent No. 8,061,598 B2 (Ex. 1201, “the ’598 patent”) pursuant to § 18 of
`
`the Leahy-Smith America Invents Act (“AIA”). Paper 9 (“Pet”). We
`
`instituted a covered business method patent review (Paper 22, “Institution
`
`Decision” or “Inst. Dec.”) based upon Petitioner’s assertion that claims 1, 2,
`
`15, and 31 (“the challenged claims”) are directed to patent ineligible subject
`
`matter under 35 U.S.C. § 101. Inst. Dec. 19. Because we had already
`
`instituted a review of claim 7 under § 101 in CBM2014-00193, we declined
`
`to institute a review of claim 7 under this ground in this case. Id. at 16.
`
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`
`Patent Owner Response (Paper 32, “PO Resp.”) and Petitioner filed a Reply
`
`(Paper 34, “Pet. Reply”) to Patent Owner’s Response.
`
`In our Final Decision, we determined that Petitioner had established,
`by a preponderance of the evidence, that claims 1, 2, 15, and 31 of the ’598
`
`patent are unpatentable. Paper 46 (“Final Dec.”), 26.
`
`Patent Owner requests rehearing of the Final Decision. Paper 48
`939
`(“Request” or “Req. Reh g ). Having considered Patent Owner’s Request,
`
`we decline to modify our Final Decision.
`
`STANDARD OF REVIEW
`
`In covered business method review, the petitioner has the burden of
`
`showing unpatentability by a preponderance of the evidence. 35 U.S.C.
`
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`
`CPR. § 42.71(d), which states:
`The burden of showing a decision should be modlhed lies with
`the party challenging the decision. The request must specifically
`
`2
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`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.
`
`Patent Owner’s Request is based on a disagreement with our
`
`ANALYSIS
`
`determination that claims 1, 2, and 715 (“the challenged claims”) are directed
`
`to patent-ineligible subject matter.2 Req. Reh’ g 2. In its Request, Patent
`
`Owner presents arguments directed to alleged similarities between the
`
`challenged claims and those at issue in DDR Holdings, LLC v. Hotels. com,
`
`LP, 773 F.3d 1245 (Fed. Cir. 2014) (Req. Reh’g 5—10) and alleged
`
`differences between the challenged claims and those at issue in Alice Corp.
`
`szy. Ltd. v. CLS Bank Int 7., 134 S. Ct. 2347 (2014) (id. at 10—15).
`
`As noted above, our rules require that the requesting party
`
`“specifically 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.” 37 C1.F.R'.
`
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`
`identify any specific matter that we misapprehended or overlooked. Rather,
`
`the only citation to Patent Owner’s previous arguments are general citations,
`without explanation as to how we misapprehended or overlooked any
`-
`
`particular matter in the record. For example, with respect to Patent Owner’s
`
`arguments regarding DDR Holdings, Patent Owner simply notes that
`
`“[p]ursuant to .37 C.F,R_, § 47 71 (d), the issue of whether the challenged
`
`claims were similar to those in DDR Holdings was previously addressed.
`
`See PO Resp. 1, 10—12.” Request 7 n.3. Similarly, in Patent Owner’s
`
`2 Patent Owner does not seek rehearing with respect to claim 31.
`
`

`

`CBM2015—00017
`
`Patent 8,061,598 B2
`
`arguments regarding Alice, Patent Owner simply notes that “[p]ursuant to 37
`
`CPR. § 42.71(d), the issue of whether the claims are abstract ideas was
`
`previously addressed. See PO Resp. 10—22; see also Tr. 4621—4721 1” (id. at
`
`10 n.5) and “[p]ursuant to 37 CPR. § 42.71(d), the issue of whether the
`
`challenged claims contain ‘additional features’ beyond an abstract idea was
`
`previously addressed. See PO-Resp. 11—12” (id. at 12 n.7). These generic
`
`citations to large portions of the record do not identify, with any
`
`particularity, specific arguments that we may have misapprehended or
`
`overlooked.
`
`Rather than providing a proper request for rehearing, addressing
`
`particular matters that we previously misapprehended or overlooked, Patent
`
`Owner’s Request provides new briefing by expounding on argument already
`
`made. Patent Owner cannot simply allege that an “issue” (e.g., whether the
`
`claims are directed to an abstract idea) was previously addressed, generally,
`
`and proceed to present new argument on that issue in a request for rehearing.
`
`See 37 CPR. § 42.71.
`
`Patent Owner’s arguments are either new or were addressed in our
`
`Final Decision. For example, Patent Owner’s argument that the challenged
`
`claims are not directed to an abstract idea (Req. Reh’ g 10—12) is new, and
`
`therefore, improper in a request for rehearing, because Patent Owner did not
`
`argue the first step of the analysis articulated in Mayo and Alice in its Patent
`
`Owner Response (see Paper 32 (PO Resp.) passim (arguing only the second
`
`step of the Mayo and Alice test)). To the extent portions of the Request are
`
`supported by Patent Owner’s argument in the general citations to the record,
`
`we considered those arguments in our Final Decision, as even Patent Owner
`
`acknowledges. See, e. g., Req. Reh’ g 6—7 (citing Final Dec. 15) (“The Board
`
`

`

`CBM2015—00017
`
`Patent 8,061,598 B2
`
`rejected Patent Owner’s reliance on DDR Holdings (at 15), holding that the
`
`challenged claims were not ‘rooted in computer technology in order to
`overcome a problem. specifically arising in the realm of computer
`
`networks.”’). For example, Patent Owner’s arguments about inventive
`concept (Req. Reh’g 5—6, 12—15) were addressed at pages 9—12 and 16—18
`
`of our Final Decision, Patent Owner’s arguments about preemption (Req.
`
`Reh’ g. 6) were addressed at pages 18—20 of our Final Decision, and Patent
`
`Owner’s arguments about DDR Holdings (Req. Reh’g. 6—10) were
`
`addressed at pages 12—16 of our Final Decision. Mere disagreement with
`
`our Final Decision also is not a proper basis for rehearing.
`
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`
`reason to modify our Final Decision.
`
`Accordingly, it is:
`
`ORDER
`
`ORDERED that Patent Owner’s Request is denied.
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`PETITIONER:
`
`J. Steven Baughman
`James R. Batchelder
`
`Megan F. Raymond
`Ropes & Gray LLP
`steven.baughman@ropesgray.com
`james.batchclder@ropesgray.com
`Megan.raymond@ropesgray.com
`
`PATENT OWNER:
`
`Michael Casey
`J. Scott Davidson
`
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`smartflash-cbm@dbjg.com
`jsd@dbjg.com
`
`'
`
`

`

`Trials@uspto.gov
`Tel: 571-272-7822
`
`.
`
`Paper 46
`Entered: March 30, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00017
`
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`
`35 US. C. § 328(a) and 37 C.F.R. § 42. 73
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`A. Background
`
`INTRODUCTION
`
`Apple Inc. (“Petitioner”), filed a Corrected Petition to institute
`
`covered business method patent review of claims 1, 2, 7, 15, and 31 of US.
`
`Patent No. 8,061,598 B2 (EX. 1201, “the ’598 patent”) pursuant to § 18 of
`
`the Leahy-Smith America Invents Act (“ALA”). Paper 9 (“Pet”). We
`
`instituted a covered business method patent review (Paper 22, “Institution
`
`Decision” or “Inst. Dec”) based upon Petitioner’s assertion that claims 1, 2,
`
`15, and 31 (“the challenged claims”) are directed to patent ineligible subject
`
`matter under 35 U.S.C. § 101. Inst. Dec. 19. Because we had already
`
`instituted a review of claim 7 under § 101 in CBM2014-00193, we declined
`
`to institute a review of claim 7 under this ground in this case. Id. at 16.
`
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`
`Patent Owner Response (Paper 32, “PO Resp”) and Petitioner filed a Reply
`
`(Paper 34, “Pet. Reply”) to Patent Owner’s Response.
`
`An oral hearing was held on November 9, 2015, and a. transcript of the
`
`hearing is included in the record. Paper 44 (“TL”).
`
`We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
`
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 CPR. § 42.73.
`
`For the reasons that follow, we determine that Petitioner has shown by a
`
`preponderance of the evidence that claims 1, 2, 15, and 31 of the ’598 patent
`
`are directed to patent ineligible subject matter under 35 U.S.C. § 101.
`
`B. Related Matters and Estoppel
`
`The ’598 patent is the subject of the following district court cases:
`
`Smarzflash LLC v. Apple Inc, Case No. 6:13-cv-447 (E.D. Tex. 2014);
`
`Smartflash LLC v. Samsung Electronics Co, Case No. 6:13-cv-448 (E.D.
`
`Tex. 2014); Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435 (ED.
`
`2
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`Tex. 2014); Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145 (E.D. Tex.
`
`2015). Paper 43, 4—5.
`
`In a previous covered business method patent review, CBM2014—
`
`00108, we issued a Final Written Decision determining that claim 26 is
`
`unpatentable under 35 U.S.C. § 103. CBM2014-00108, Paper 50.
`
`We also concurrently issue a Final Written Decision in CBM2014-
`
`00193 finding that claim 7 of the ’598 patent is directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101.
`
`C. The ’598 Patent
`
`The ’598 patent relates to “a portable data carrier for storing and
`
`paying fordata and to computer systems for providing access to data to be
`
`stored,” and the “corresponding methods and computer programs.”
`
`EX. 1201, 1:21—25. Owners of proprietary data, especially audio recordings,
`
`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—2:11. 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.
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`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 1, 2, 15, and 31 of the ’598 patent.
`
`Claims 1 and 31 are independent, and claims 2 and 15 depend from claim 1.
`
`Claims 1 and 31 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 userules for said
`one or more content data items;
`
`a. program store storing code implementable by a
`processor; 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. 1201, 25:54—67.
`
`A. method of controlling access to content data, the
`31.
`method comprising:
`
`receiving a data access request from a user for a c0ntent
`data item, reading the use status data and one or more use rules
`from parameter memory that pertain to use of the requested
`content data item;
`
`

`

`CBM2015—00017
`
`Patent 8,061,598 B2
`
`evaluating the use status data using the one or more use
`rules to determine whether access to the content data item is
`
`permitted; and
`
`enabling access to the content data item responsive to a
`determination that access to the content data item is permitted.
`
`Id. at 28:18-30.
`
`-
`
`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 C.F.R. § 42.300(b). 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 Translogic Tech, Inc, ‘
`
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this Decision, we
`
`need not construe expressly any claim term.
`
`B. Statutory Subject Afatter
`
`The Petition challenges claims 1, 2, 7, 15. and 31 as directed to
`
`patent—ineligible subject matter under 35 U.S.C. § 101. Pet. 26—3 8.
`
`According to the Petition, the challenged claims are directed to an abstract
`
`idea without additional elements that transform the claims into a patent-
`
`eligible application of that idea. Id. Patent Owner argues that the
`
`challenged claims are statutory because they are “rooted in computer
`
`technology in order to overcome a problem specifically arising in the realm
`
`of computer networks,” that of “data content piracy.” PO Resp. 1.
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`1. Abstract Idea
`
`Under 35 U.S.C. § 101, we must first 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, the challenged claims recite a “machine”—i.e., a “portable
`
`data carrier” (claim l)—and a “process”—i.e., a “method” (claim 31)—
`
`under § 101. Section 101, however, “contains an important implicit
`
`exception to subject matter eligibility: Laws of nature, natural phenomena,
`
`and abstract 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 laws of nature, natural phenomena, and abstract ideas
`
`from those that claim patent-eligible applications of these concepts.” Alice,
`
`134 S. Ct. at 2355. The first step in the analysis is to “determine whether the
`
`claims at issue are directed to one of those patent-ineligible concepts.” Id.
`
`According tothe 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
`
`risk broad pre-emption of basic ideas—and patents 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
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`(“It is a building block, a basic conceptualfiamework for organizing
`
`information .
`
`.
`
`. .” (emphasis added)). This is similar to the Supreme Court’s
`
`formulation in Bilskz' v. Kappos, 561 US. 593, 611 (2010) (emphasis added),
`
`noting that the concept of risk hedging is “afundamental economic practice
`
`long prevalent in our system of commerce.” See also buySAFE, Inc. v.
`
`Google, Inc, 765 F.3d 1350, 1353—54 (Fed. Cir. 2014) (stating that patent
`
`claims related 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 Teons, Inc. v. Amazon. com, Inc, 788 F.3d 1359, 1362 (Fed.
`
`Cir. 2015) (citations omitted).
`
`Petitioner argues that the challenged claims are directed to the abstract
`
`idea of “paying for and/or controlling access to content.” Pet. 26.
`
`Specifically, Petitioner contends that “[m]ethod claim 31 and device claims
`
`1, 2 and 15 are drawn to the concept of controlling access in that they recite
`
`steps to and ‘code to’ evaluate rules to determine whether access is
`
`permitted.” Id. at 29. Although Patent Owner does not concede, in its brief,
`that the challenged claims are directed to an abstract idea, it does not
`
`persuasively explain how the claimed subject matter escapes this
`
`classification. PO Resp. 9—20; see also Paper 44 (transcript of oral hearing),
`
`46:21—47: 11 (Patent Owner arguing that the challenged claims do not cover
`
`an abstract idea, but conceding this argument was not made in the briefs).
`
`We are persuaded that the challenged claims are drawn to a patent—
`
`ineligible abstract idea. Specifically, the challenged claims are directed to
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
`
`performing the fundamental economic practice of conditioning and
`
`controlling access to content (claims 1, 2, 15, and 31). For example, claim 1
`
`recites “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.” Claim 31 recites
`“evaluating the use status data using the one or more use rules to determine
`
`whether access to the content data item is permitted” and “enabling access to
`
`the content data item responsive to a determination that access to the content
`
`data item is permitted.”
`
`As discussed above, the ’598 patent discusses addressing recording
`
`industry concerns of data pirates offering unauthorized access to widely
`
`available compressed audio recordings. EX. 1201, 1:20—55. The
`
`Specification explains that these pirates obtain data either by unarithorized or
`
`legitimate means and then make the data available over the Internet without
`
`authorization. Id. The Specification further explains that once data has been
`
`published on the Internet, it'is difficult to police access to and use of that
`
`data by internet users who may not even realize that it is pirated. Id. The
`
`’598 patent proposes to solve this problem by restricting access to data on a
`
`portable data carrier based upon payment validation. Id. at 1259—224. The
`
`’598 patent makes clear that the crux of the claimed subject matter is
`
`restricting access to stored data based on supplier-defined access rules and
`
`validation of payment. Id. at 1:59—2:15.
`
`Although the 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 viewed in light of the Specification,
`
`is paying for and/or controlling access to content, as Petitioner contends. As
`
`

`

`CBM2015—00017
`
`Patent 8,061,598 B2
`
`discussed further below, this is a fundamental economic practice long in
`
`existence in commerce. See Bilski, 561 US. at 611.
`
`We are, thus, persuaded, based on the Specification and the language
`
`of the challenged claims, that claims 1, 2, 15 and 31 of the ’598 patent are
`
`directed to an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the
`
`concept of interrnediated settlement at issue in Alice was an abstract idea);
`
`Accenture Global Servs.,‘ GmbH v. Guidewire Sofiware, Inc., 728 F.3d 1336,
`
`1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a system
`
`claim to be “generating tasks [based on] rules .
`
`.
`
`. to be completed upon the
`
`occurrence of an event”).
`
`2. Inventive Concept
`
`“A claim that recites an abstractidea must include ‘additional
`
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`
`monopolize the [abstract idca].’” Alice, 134 S. Ct. at 2357 (quoting Mayo,
`
`132 S Ct. at I297). “This requires more than simply stating an abstract idea
`
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`
`the prohibition on patenting an ineligible concept cannot be circumvented by
`
`limiting the use of an ineligible concept to a particular technological
`
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`
`mere recitation of generic computer components performing conventional
`
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`
`computer will include a ‘communications controller’ and ‘data storage unit’
`
`capable of performing the basic calculation, storage, and transmission
`
`functions required by the method claims”).
`
`Petitioner argues that “the Challenged Claims do nothing more than
`
`recite routine, conventional computer functions in implementing an abstract
`
`

`

`CBM2015-00017
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`Patent 8,061,598 B2
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`idea.” Pet. Reply 8. We are persuaded that claims 1, 2, 15, and 31 of the
`
`’598 patent do not add an inventive concept sufficient to ensure that the
`
`patent in practice amounts to significantly more than a patent on the abstract
`
`idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728
`
`F.3d at 1344 (holding claims directed to the abstract idea of “generating
`
`tasks [based on] rules .
`
`.
`
`. to be completedupon the occurrence of an event”
`
`to be unpatentable even when applied in a computer environment and within
`
`the insurance industry). Specifically, we agree with and adopt the rationale
`
`articulated in the Petition that the additional elements of the challenged
`
`claims are either field of use limitations and/or generic features of a
`
`computer that do not bring the challenged claims within § 101 patent
`
`eligibility. Pet. 30—36.
`
`a. Technical Elements
`
`Petitioner argues that the challenged claims are unpatentable because
`
`they “are directed onlyl to an abstract idea with nothing more than ‘well-
`
`understood, routine, conventional activity’ added.” Pet. 30—31 (citations
`
`omitted). Patent Owner disagrees, arguing that the challenged claims are
`
`patentable because they recite “specific ways of using distinct memories,-
`
`data types, and use rules that amount to significantly more than the
`
`underlying abstract idea.” PO Resp. 1 1—12 (quoting Ex. 2049, 19). We
`
`agree with Petitioner for the following reasons.
`
`The ’598 patent treats as well-known all potentially technical aspects
`
`of the challenged claims, which simply require generic computer
`
`components (e.g., interfaces, memory, program store, and processor). See
`
`Pet. Reply 5—8, 13— 14 (citing Ex. 1201, 424—5, 16:46—50, 18:7—11). With
`
`respect to the “portable data carrier” recited in claim 1, for example, the
`
`10
`
`

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`CBM2015-00017
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`Patent 8,061,598 B2
`
`Specification states it may be a generic device such as “a standard smart
`
`card.” EX. 1201, 11:27—29; see also id. at 14:25—29 (“[l]ikewise data stores
`
`136, 138 and 140 may comprise a single physical data store or may be
`
`distributed over a plurality of physical devices and may even be at
`
`physically remote locations from processors 128-134 and coupled to these
`
`processors via internet 142”), Fig. 6.
`
`Further, the claimed computer code performs generic computer
`
`functions, such as storing, retrieving, receiving, reading, evaluating, and
`
`enabling access to. See Pet. 32—33. The recitation of these generic
`
`computer functions is insufficient to confer specificity. See Content
`
`Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l Ass ’n, 776
`
`F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data collection,
`
`recognition, and storage is undisputedly well-known. Indeed, humans have
`
`always performed these functions”).
`
`Moreover, we are not persuaded that claims 1, 2, 15, and 31 “recite
`
`specific ways of using distinct memories, data types, and use rules that
`
`amount to significantly more than” paying for and/or controlling access to
`
`content. See PO Resp. 11—12. The challenged claims generically recite
`,9 (6
`
`several memories, including “content data memory,
`
`use rule memory,” “a
`
`program store,” and “payment data memory,” and generically recite several
`’9 ‘6
`99 ‘6
`
`data types, including “data,” “content data items,
`
`use rules,
`
`code,”
`
`(“payment data,” and “use status data.” We are not persuaded that the
`
`recitation of these memories and data types, by itself, amounts to
`
`significantly more than the underlying abstract idea. Patent Owner does not
`
`point to any inventive concept in the ’598 patent related to the way these
`
`memories or data types are constructed or used. In fact, the ’598 patent
`
`11
`
`

`

`CBM2015-00017
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`Patent 8,061,598 B2
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`simply discloses these memories and data types with no description of the
`
`underlying implementation or programming. See Content Extraction and
`
`Transmission LLC, 776 F.3d at 1347 (“The concept of data collection,
`
`recognition, and storage is undisputedly well-known. Indeed, humans have
`
`always performed these functions”). This recitation of generic computer
`
`memories and data types, being used in the conventional manner, is
`
`insufficient to confer the specificity required to elevate the nature of the
`
`claim into a patent-eligible application. Alice, 134 S. Ct. at 2355 (quoting
`
`Mayo, 132 S. Ct. at 1294) (“We have described step two of this analysis as a
`
`search for an ‘inventive concept’—-i.e., an element or combination of
`
`elements that is ‘sufficient to ensure that the patent in practice amounts to
`
`significantly more than a patent on the [ineligible concept] itself.’”)
`
`(brackets in original).
`
`In addition, because the recited elements can be implemented on a
`
`general purpose computer, the challenged claims do not cover a “particular
`
`machine.” Pet. 38; see Bilski, 561 US. at 604—05 (stating that machine-or-
`
`transformation test remains “a useful and important clue” for determining
`
`whether an invention is patent eligible). And the challenged claims do not
`
`transform an article into a different state or thing. Pet. 38.
`
`Thus, we determine, the potentially technical elements of the
`
`challenged claims are nothing more than “generic computer
`
`implementations” and perform functions that are “purely conventional.”
`
`Alice, 134 S. Ct. at 2358—59; Mayo, 132 S. Ct. at 1294.
`
`b. DDR Holdings
`
`Relying on the Federal Circuit’s decision in DDR Holdings, Patent
`
`Owner asserts that the challenged claims are directed to statutory subject
`
`12
`
`

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`CBM2015-00017
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`Patent 8,061,598 B2
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`matter because the claimed solution is “‘necessarily rooted in computer
`
`technology in order to overcome a problem specifically arising in the realm
`
`of computer networks.” PO Resp. 1 (quoting DDR Holdings, LLC v.
`
`Hotels.com, LP, 773 F.3d 1245, 1257 (Fed. Cir. 2014)). Patent Owner
`
`contends that
`
`By using a system that combines on the data carrier the digital
`content data item and at least one use rule (claim 1), and “code
`to provide access to the at
`least one content data item in
`accordance with the at least one use rule” (claim 2), or “a content
`access PIN memory store to store a PIN number for controlling
`access to the content data memory” (claim 15), or “evaluating the
`use status data using the one or more use rules to determine
`whether access to the content data item is permitted; and enabling
`access to the content data item responsive to a determination that
`access to the content data item is permitted” (claim 31), access
`control to the digital content data item can be continuously
`enforced prior to access to the digital content data item, allowing
`subscquent use (e.g., playback) of the digital content
`to be
`‘ portable and disconnected, and additional content can be
`obtained.
`
`Id. at 10—1 1.
`
`Petitioner responds that the challenged claims are distinguishable
`
`from the claims in DDR Holdings. Pet. Reply 9—17. The DDR Holdings
`
`patent is directed at retaining website visitors when clicking on an
`
`advertisement hyperlink within a host website. 773 F.3d at 1257.
`
`Conventionally, clicking on an advertisement hyperlink would transport a
`
`visitor from the host’s website to a third party website. Id. The Federal
`Circuit distinguished this Internet—centric problem over “the ‘brick and
`
`mortar’ context” because “[t]here is .
`
`.
`
`. no possibility that by walking up to
`
`[a kiosk in a warehouse store], the customer will be suddenly and completely
`
`transported outside the warehouse store and relocated to a separate physical
`
`13
`
`

`

`CBM2015-00017
`
`Patent 8,061,598 B2
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`venue associated with the t

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