UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`m Patent Owner.
`
`Case CBM2014-001081
`
`Patent 8,061,598 B2
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`‘ Case CBM2014-00109 has been consolidated with the instant proceeding.
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`m Patent Owner.
`
`Case CBM2014-001081
`
`Patent 8,061,598 B2
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`‘ Case CBM2014-00109 has been consolidated with the instant proceeding.
`
`
`
`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 September 25, 2015
`
`(Paper 50) and from all underlying orders, decisions, rulings and opinions
`
`regarding US. Patent No. 8,061,598 (the “’598 Patent”) including the Decision -
`
`Institution of Covered Business Method Patent Review entered on September 30,
`
`2014 (Paper 8) and the Order denying Patent Owner’s request for authorization to
`
`file a motion for additional discovery entered on November 13, 2014 (Paper 14).
`
`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 the Board erred in finding that claim 26 of the ’598 Patent is
`
`unpatentable under 35 U .SL‘. § 103(a) as obvious over the
`
`combination of US. Patent No. 5,530,235 (“Stefik ’235”) and US.
`
`Patent No. 5,629,980 (“Stefik ’980”);
`
`0 Whether the Board erred in finding that claim 26 of the ’598 Patent is
`
`unpatentable under 35 U.S.C. § 103(a) as obvious over US. Patent
`
`No. 5,915,019 (“Ginter”);
`
`
`
`0 Whether the Board erred in denying Patent Owner’s Motion to
`
`Exclude (Paper 40);
`
`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; and
`
`0 Whether the Board erred in denying Patent Owner’s request for
`
`discovery.
`
`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: November 25, 2015
`
`/ 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 hereby certifies that this PATENT OWNER’S NOTICE
`
`OF APPEAL was filed with the Patent Trial and Appeal Board using the PRPS
`
`System and was served, by agreement of the parties, November 25, 2015, by
`
`emailing copies to counsel for the Petitioner as follows:
`
`J. Steven Baughman (steven.baughman@ropesgray.com)
`Ching-Lee Fukuda (ching-lee.fukuda@ropesgray.com)
`Megan Raymond (megan.raymond@ropesgray.com
`ApplePTABService-SmartFlash@ropesgray.com
`
`The undersigned hereby further certifies that on November 25, 2015 this
`
`PATENT OWNER’S NOTICE OF APPEAL (and its three attached decisions)
`
`were filed with the Federal Circuit via CM/ECF (along with three courtesy copies
`
`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 General Counsel
`
`Madison Building East, 10B20
`600 Dulaney Street
`Alexandria, VA 22314-5793
`
`. Dated: November 25, 2015
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist
`Jackson & Gowdey, LLP
`83 00 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 50
`Entered: September 25, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2014-00108‘
`
`Patent 8,061,598 132
`
`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
`
`1 Case CBM2014-00109 has been consolidated with the instant proceeding.
`
`
`
`CBM2014-00108 _
`Patent 8,061,598 B2
`
`.
`
`1;
`
`INTRODUCTION
`
`A.
`'Background
`Petitioner, Apple Inc. (“Apple”),\filed two Petitions to institute.
`
`covered business method patent review of claims 1,2, 7, 13, 15, 26, and 31
`
`“the challenged claims”) of US. Patent No. 8,061,598 B2 (Ex. 1001, “the
`’598 patent”) pursuant to § 18 of the Leahy-Smith America Invents Act
`
`-
`
`“AIA”). CBM2014-00108 (Paper 2, “108 Pet”) and CBM2014-00109
`- (Paper 2, “109 Pet”).2 On September 30, 2014, we consolidated
`-' CBM2014-00108 and CBM2014-00109 and instituted a transitional
`
`covered business methOd patent review (Paper 8, “Decision to Institute” or
`
`“Dec.”) based upon Petitioner’s assertion that claim 26 is unpatentablc
`
`based on the following grounds: .
`Reference[s] “ Claims Challenged
`
`Steflk 235 and Stefik’9805
`§103(a) _
`
`§ 1039
`
`
`
`
`
`
`
`
`
`=
`
`Dec. 22. Petitioner also provides declarations from Anthony J.
`Wechselberger (“Wechselberge_r Decl.”). 112 Ex. 1021; 113 Ex. 1121. .‘
`
`2 Unless otherwise specified, hereinafter, paper numbers refer to paper
`, numbers in CBM2014-00108.
`3 Exhibits with numbers 1001—1029 were filed in CBM2014-00108 and
`those with numbers 1101—1129 were filed in CBM2014-00109. For
`-
`
`,
`
`purposes of this Decision, where the two cases have duplicate exhibits, we
`refer to the exhibit filed in CBM2014-00108.
`
`4 US. Patent No. 5,530,235 (June 25, 1996) (Ex. 1013, “Stefik ’235”).
`
`5 US. Patent No. 5,629,980 (May 13, 1997) (Ex. 1014, “Stefik ’980”).
`
`6 US. Patent No. 5,915,019 (June 22, 1999) (Ex. 1015, “Ginter”).
`
`J
`
`_.
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`Subsequent to institution, Patent Owner filed a Patent Owner
`
`Response (Paper 23, “PO Resp”) and, in support, a declaration from
`
`Jonathan Katz, Ph.D. (Ex. 2030, “Katz Declaration”). Petitioner filed a
`
`Reply (Paper 31, “Pet. Reply”) to Patent Owner’s Response.
`
`An oral hearing was held on July 7, 2015, and a transcript of the
`
`hearing is included in the record (Paper 49, “Tr.”).
`I 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 C.F.R. § 42.73.
`
`For the reasons that follow, we determine that Petitioner has shown by
`
`a preponderance of the evidence that claim 26 of the ’598 patent is
`
`unpatentable.
`
`B. 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,
`
`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 internet without fear of data pirates. Id. at 2: 1 1—15.
`
`As described, the portable data storage device is connected to a
`
`terminal for intemet access. Id. at 1:59—67. The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`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—4.
`
`The ’598 patent makes clear that the actual implementation of these
`
`components is not critical and 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”).
`
`C. Related Matters
`
`The parties indicate that Smartflash has sued Apple for infringement
`
`of the ’598 patent and identify the following district court case: Smarzjlash
`
`LLC 12. Apple Inc., Case No. 6: l3-cv—447 (ED. Tex.). See, e.g., 108 Pet. 23;
`
`Paper 5, 2. Patent Owner indicates that the ’598 patent and other patents in
`
`the same patent family are the subject of several other district court cases.
`
`Paper 33, 3—4.
`
`In addition to the 108 and 109 Petitions, Apple and other petitioners
`
`have filed numerous other Petitions for covered business method patent
`
`review challenging claims of patents owned by Smarttlash and disclosing
`
`similar subject matter.
`
`D. The Instituted Claim
`
`Apple challenges claim 26 of the ’598 patent. Claim 26 recites the
`
`following:
`
`26.
`
`A portable data carrier comprising:
`
`an interface for sending and receiving data from and to the
`carrier;
`
`memory, coupled to the interface, for storing data on the carrier;
`
`a processor for controlling access to data; and
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`a subscriber identity module (SIM) portion storing
`identification data to identify a user of said portable data carrier to a
`network operator.
`
`Ex. 1001, 27:45—53.
`
`11.
`
`EVIDENTIARY MATTERS
`
`A. Wechselberger Declaration
`
`In its Preliminary Response, Patent Owner argued that we should
`
`disregard Mr. Wechselberger’s testimony, but we determined that Patent
`
`Owner did not offer any evidence that Mr. Wechselberger “used incorrect
`
`criteria, failed to consider evidence, or is not an expert in the appropriate
`
`field.” Dec. 16 n.5. Patent Owner renews this contention, arguing in its
`
`Response that both declarations by Mr. Wechselberger (Ex. 1021; Ex. 1121)
`
`should be given little or no weight because they do not state the evidentiary
`
`standard that he used in arriving at his conclusions and, therefore, he “used
`
`incorrect criteria.” PO Resp. 4—7. In addition, referring to excerpts from
`
`Mr. Wechselberger’s deposition, Patent Owner contends that Mr.
`
`Wechselberger “could neither articulate what the difference was between
`
`‘substantial evidence’ and ‘preponderance of the evidence,’ nor could he
`
`articulate which standard he was supposed to use when alleging invalidity of
`
`claims in a patent.” Id. at 5. Thus, according to Patent Owner, should we
`
`afford any weight to Mr. Wechselberger’s testimony, we would be accepting
`‘6‘
`
`his opinion without knowing
`
`the underlying facts .
`
`.
`
`. on which the opinion
`
`is based’ (i.e., how much evidence he thinks shows any of his opinions
`
`discussed therein)” Id. at 7.
`
`In its Reply, Petitioner argues that “Mr. Wechselberger is a highly-
`
`qualified expert,” that Patent Owner offers no evidence disputing that he. is a
`
`qualified expert, and that an expert is not required to “recite or apply the
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`‘preponderance of the evidence standard’ expressly in order for the expert
`
`testimony to be accorded weight.” Reply 14—15.
`
`Patent Owner has not articulated a persuasive reason for giving Mr.
`
`Wechselberger’s declarations, as a whole, little or no weight in our analysis.
`
`Patent Owner has not cited any authority requiring an expert to recite or
`
`apply the “preponderance of the evidence” standard in order for the expert
`
`opinion to be accorded weight. Under 37 CPR. § 42.1(d), we apply the
`
`preponderance of the evidence standard in determining whether Petitioner
`
`has established unpatentability. In doing so, it is within our discretion to
`
`determine the appropriate weight to be accorded the evidence presented,
`
`including expert opinion, based on the disclosure of the underlying facts or
`
`data upon which that opinion is based. Thus, we decline to make a
`
`determination about Mr. Wechselberger’s opinion, as a whole. Rather, in
`
`our analysis we will consider, as it arises, relevant portions of Mr.
`
`Wechselberger’s testimony and determine the appropriate weight to accord
`
`that particular testimony.
`
`b’. Katz Declaration
`
`Petitioner contends that “Dr. Katz’s unsupported opinions, to the
`
`extent they are given any weight at all, should be given far less weight than
`
`Mr. Wechselberger’s.” Reply 9. Specifically, Petitioner argues that Dr.
`
`Katz is not qualified as a person of ordinary skill in the art under either
`
`party’s definition, he repeatedly stated that “he was ‘not sure’ about various
`
`technologies that are indisputably in the relevant prior art, and that he does
`
`not know what a POSITA would have understood about that technology,”
`
`and he repeatedly stated that “he was ‘not sure’ how a POSITA would
`
`interpret several passages of the cited prior art and several passages of the
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`challenged patent[].” Id. at 9—13. Thus, according to Petitioner, “Dr. Katz
`
`(a) does not know this information and is therefore not a qualified expert;
`
`and/or (b) did not properly consider the scope and content of the prior art or
`
`a POSITA’s understanding of the prior art.” Id. at 14.
`
`We decline to make a determination as to Dr. Katz’s testimony, as a
`
`whole. As noted above, we have the discretion to determine the appropriate
`
`weight to be accorded to the evidence presented, including expert opinion,
`
`based on the disclosure of the underlying facts or data upon which the
`
`opinion is based. Thus, as with Mr. Wechselberger’s opinion, in our
`
`analysis we will consider relevant portions of Dr. Katz’s testimony as it
`
`arises and determine the appropriate weight to accord that particular
`
`testimony.
`
`III. ANALYSIS
`
`A. Claim Construction
`
`We construe all terms, whether or not expressly discussed here, using
`
`the broadest reasonable construction in light of the ’598 patent specification.
`
`See 37 C.F.R. § 42.300(b); see also In re Cuozzo Speed Techs., LLC, 793
`
`F.3d 1268, 1278—80 (Fed. Cir. 2015) (“Congress implicitly approved the
`
`broadest reasonable interpretation standard 1n enacting the AlA,” and “the
`
`standard was properly adopted by PTO regulation”). In the Decision to
`
`Institute, we construed the term “use rule” to mean “a rule specifying a
`
`condition under which access to content is permitted.” Dec. 7. Neither
`
`party contests this construction. We discern no reason to deviate from this
`
`construction of “use rule.” Furthermore, for purposes of this Final Written
`
`Decision, we need not expressly construe any other claim term.
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`B. Obviousness over Stefik ’235 and Stefik ’980
`
`Petitioner asserts that claim 26 would have been obvious over the
`
`Stefik references alone.7 108 Pet. 63—69. After considering the arguments
`
`and evidence presented in the Petition and the Preliminary Response (108,
`
`Paper 6), we instituted trial with respect to claim 26 concluding that
`
`Petitioner was likely to prevail in showing unpatentability under 35 U.S.C.
`
`§ 103(a) over the combination of Stefik ’235 and Steflk ’980. Dec. 24.
`
`After considering the arguments and evidence presented during the trial, our
`
`determination remains unchanged.
`
`1. Overview ofStefik ’235
`
`Stefik ’235 teaches a portable Document Card (“DocuCard”) for
`
`storing information in a digital form, storing usage rights for the
`
`information, processing user-initiated functions and requests to access
`
`decuments stored therein, interfacing to external devices for reading and
`
`writing digital information, and allowing a user to directly interact with the
`
`DocuCard. Ex. 1013, 2:29—40, 7:35—42.
`
`2. Overview ofStefik ’980
`
`Stefik ’980 teaches a “repository” for storing digital works,
`
`controlling access to digital works, billing for access to digital works and
`
`maintaining the security and integrity of the system. Ex. 1014, 6:57—61.
`
`7 Petitioner refers to Stefik ’235 and Stefik ’980 collectively as “Stefik,”
`contending that Stefik ’235 incorporates Stefik ’980 by reference, and
`providing rationale for combining the teachings from the two references.
`108 Pet. 30 n.13. We agree these related references can be combined and
`follow Petitioner’s nomenclature.
`’
`
`
`
`CBM2014-00108
`
`Patent 8,061,598 B2
`
`3. Analysis
`
`The parties focus on only one claim limitation. For the remaining
`
`limitations, we have reviewed Petitioner’s evidence and argument and agree
`
`that Petitioner has shown sufficiently that Stefik teaches those limitations.
`
`See 108 Pet. 63—69. We turn now to the disputed limitation.
`
`Claim 26 recites a “subscriber identity module (SIM) portion storing
`
`identification data to identify a user of said portable data carrier to a network
`
`operator.” Patent Owner disputes Petitioner’s contention that
`
`in the art] would have been
`A [person of ordinary skill
`motivated and found it obvious to employ a memory card for a
`mobile or cellular device that
`included a SIM portion that
`identifies a subscriber to a network operator, such as a mobile
`phone, as a repository in Stefik’s content distribution and
`access network.
`
`Pet. 65 n.17. With respect to motivation, Patent Owner argues that
`
`“[n]either patent identifies anything that indicates that a DocuCard or a
`
`repository could be a mobile or cellular phone in which such a memory card
`
`would be used.” PO Resp. 9—10. As a result, according to Patent Owner,
`
`“there is no reason to change from the ‘unique number assigned to the
`
`DocuCard upon manufacture’ to some other identifying information,” and
`
`neither the 108 Petition nor Mr. Wechselberger explain why such a change
`
`would be necessary. Id. at 10.
`
`Petitioner replies that “Stefik expressly discloses that the DocuCard
`
`includes unique identifying information” and “[a person of ordinary skill in
`
`the art] would have known that a SIM portion would have served the same
`
`purpose.” Pet. Reply 4; see also id. at 4—5 (“[A person of ordinary skill in
`
`the art] would have found it obvious to embed a SIM portion (which could
`
`be, e. g., either memory or a card) in a DocuCard repository for the well-
`
`
`
`CBM2014-00108
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`Patent 8,061,598 B2
`
`known purpose of using the SIM portion to identify the DocuCard repository
`
`to a network operator.”).
`
`We agree with Petitioner. The function of the recited “SIM portion”
`
`is “to identify a user of said portable data carrier to a network operator.”
`
`Petitioner proposes to substitute the DocuCard’s unique identifying
`
`information with the user identification means of a SIM card in order to
`
`perform the recited function of “identify[ing] a user of said portable data
`
`carrier to a network operator.” The ’598 patent acknowledges that “a mobile
`
`phone SIM (Subscriber Identity Module) card .
`
`.
`
`. already include[s] a user
`
`identification means, to allow user billing through the phone network
`
`operator.” Ex. 1001, 429—13; see also Tr. 103:7—8 (when discussing the
`
`description of the SIM portion in the challenged patent, Counsel for Patent
`
`Owner explained that “applicants didn’t need to put more in there because
`
`the SIM was already well understood”). Accordingly, we are persuaded
`
`that the substitution of the DocuCard’s unique identifying information with
`
`the user identification means of a SIM card involves nothing more than the
`
`simple substitution of one known element for another or the mere
`
`application of a known technique to a piece of prior art ready for
`
`improvement. KSR Int ’1 Co. v. Teleflex Inc., 550 US 398, 417 (2007).
`
`With respect to the obviousness of the proposed modification, Patent
`
`Owner questions whether a SIM card is capable of performing the functions
`
`of a repository. Specifically, Patent Owner faults the Petition for
`
`[N]ot disclos[ing] whether the ‘unique number assigned to the
`DocuCard upon manufacture’ has characteristics that would
`make it compatible with the SIM portion of a mobile phone, for
`example, whether the number of bits required by the ‘unique
`number assigned to the DocuCard upon manufacture’ is greater
`
`10
`
`
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`CBM2014-00108
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`Patent 8,061,598 B2
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`than the number of bits that a SIM portion would utilize to
`identify a subscriber to a network operator.
`
`Id. Patent Owner also argues that the 108 Petition fails to show that a
`
`memory card for a mobile or cellular device, such as SIM card, is capable of
`
`meeting the requirements of a repository, such as performing the registration
`
`process depicted in Figure 3 of Stefik ’235. Id. at 11.
`
`Petitioner notes that “[Patent Owner] presents no evidence disputing
`
`that a block of memory containing only a single user identifier can be a SIM
`
`portion, or that a [person of ordinary skill in the art] would have known how
`
`to conform Stefik’s unique identifying number to the well-known SIM
`
`specification.” Pet. Reply 4. Specifically, Petitioner notes that “Stefik does
`
`not specify a number of bits that must be used for its unique identifier” and
`
`“[Patent Owner] presents no evidence substantiating that Stefik’s unique
`
`identifier would be incompatible with even the specification of a SIM card
`
`(not claimed).” Id. at 5.
`
`We agree with Petitioner. Despite raising questions about the
`
`suitability of a SIM card as Stefik’s repository, Patent Owner presents no
`
`evidence suggesting incompatibility. PO Resp. 10; Ex. 2030 1] 14. We note
`
`again that the ’598 patent states explicitly that, “[t]he data storage means
`
`can, if desired, incorporate the functionality of a mobile phone SIM
`
`(Subscriber Identity Module) card.” Ex. 1001, 4:9—13. According to the
`
`’598 patent, the data storage means is “based on a standard smart card.” Ex.
`
`1001, 11:28—29. Stefik, however, discloses that “smartcard implementations
`
`are inadequate for use as a transportable storage medium due to their limited
`
`storage capacities.” Ex. 1013, 226—9. For that reason, Stefik’s DocuCard is
`
`based on the more powerful Personal Computer Memory Card International
`
`Association (PCMCIA) card standard. 1d. at 4:54-5:22. Because Stefik’s
`
`11
`
`
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`CBM2014-00108
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`Patent 8,061,598 B2
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`DocuCard is implemented on a PCMCIA card, which is more powerful than
`
`the standard smartcard described in the ’598 patent as being capable of
`
`incorporating the functionality of a mobile phone SIM card, we are
`
`persuaded that Stefik’s DocuCard could also incorporate the functionality of
`
`a mobile phone SIM card.
`
`We conclude that Petitioner has shown by a preponderance of the
`
`evidence that claim 26 of the ’598 Patent would have been obvious over
`
`Stefik ’235 and Stefik ’980.
`
`C. Obviousness over Ginter
`
`Petitioner contends that claim 26 would have been obvious over
`
`Ginter. 109 Pet. 68—75. After considering the arguments and evidence
`
`presented in the Petition and the Preliminary Response (109, Paper 6), we
`
`instituted trial with respect to claim 26 concluding that Petitioner was likely
`
`to prevail in showing unpatentability under 35 U.S.C. § 103(a) over Ginter.
`
`Dec. '24. After considering the arguments and evidence presented during the
`
`trial, our determination remains unchanged.
`
`1. Overview of Ginter
`
`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. 1115, Abstract,
`
`Fig. 71, 52:26—27.
`
`2. Analysis
`
`The parties focus on only one claim limitation. For the remaining
`
`limitations, we have reviewed Petitioner’s evidence and argument and agree
`
`that Petitioner has shown sufficiently that Steflk teaches those limitations.
`
`See 109 Pet. 68—75. We turn now to the diSputed limitation.
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`12
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`CBM2014-00108
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`Patent 8,061,598 B2
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`Claim 26 recites a “subscriber identity module (SIM) portion storing
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`identification data to identify a user of said portable data carrier to a network
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`operator.” Patent Owner argues that the 109 Petition fails to show that a
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`person of ordinary skill in the art would have found it obvious for Ginter’s
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`portable data carrier to use a cellular network connection (and, therefore, a
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`SIM portion), or to include a SIM portion in Ginter’s portable electronic
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`appliance. PO Resp. 12—13. Specifically, Patent Owner argues that a
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`cellular network would not have been obvious because Ginter emphasizes
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`security and describes electronic appliance 600 communicating only across
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`wired networks, Which are more secure than wireless networks. PO Resp.
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`13 (citing Ex. 1015, 63:42—67, 16128—11 (“It may be initiated across the
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`electronic highway 108, or across other communications networks such as
`
`LAN, WAN, two-way cable or using portable media exchange between
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`electronic appliances.”)).
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`This argument is unpersuasive. The cited portion in column 63 of
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`Ginter is directed to the physical security of Secure Processing Unit 500, not
`
`to the security of communications between an electronic appliance and a
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`clearinghouse. And as Petitioner correctly points out, “Ginter does not limit
`
`its disclosure to transmitting information Via ‘wired networks. Pet. Reply.
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`8. The disclosure quoted by Patent Owner uses the phrase “such as” to
`
`indicate that LAN, WAN, and two-way cable are non-limiting examples.
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`Ex. 1015, 161:8—1 1. As Petitioner also correctly points out, Patent Owner’s
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`expert, Dr. Katz, “admits that Ginter explicitly discloses allowing an
`
`electronic appliance to use ‘any of the connections .
`
`.
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`. normally used within
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`an electronic appliance,’ including broadcast reception and wireless cellular
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`connections.” Pet. Reply 8 (quoting Deposition of Dr. Katz (Ex. 1031) at
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`13
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`CBM2014—00108
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`Patent 8,061,598 B2
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`171219—172: 1)); see also Ex. 1031, 172: 1—173:2—10, 17523—5 (testifying that
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`an electronic appliance can be a pager or phone, both of which were known
`
`to communicate wirelessly). Accordingly, we are not persuaded that it
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`would not have been obvious to a person of ordinary skill in the art to
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`modify Ginter’s electronic appliance 600 to communicate over a wireless
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`network.
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`Patent Owner also argues that the disclosure in Ginter of a “portable
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`device auxiliary terminal” communicating through the use of “cellular,
`satellite, radio frequency, or other communication means” (Ex. 1015,
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`233:53—57) does not teach that Ginter’s electronic appliance or portable
`
`electronic appliance can communicate by those methods. PO Resp. 14. We
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`agree with Patent Owner that this disclosure in Ginter relates to a portable
`
`device auxiliary terminal rather than to the electronic appliance or portable
`
`electronic appliance. We need not rely on this disclosure in Ginter,
`
`however, because the other disclosure in Ginter, discussed in the preceding
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`paragraph, as well as Dr. Katz’s testimony, persuade us that it would have
`
`been obvious to a person of ordinary skill in the art for Ginter’s electronic
`
`appliance to use a cellular connection requiring a SIM card.
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`Patent Owner also argues that neither the 109 Petition nor Mr.
`
`Wechselberger explain why a person of ordinary skill in the art would have
`
`been motivated to replace Ginter’s “information which can be used to
`
`uniquely identify each instance of the portable appliance” (Ex. 1015,
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`229:13—18) with the user identification means of a SIM card. PO Resp. 15.
`
`Petitioner replies that “Ginter’s ‘Host’ electronic appliance contains
`information used to uniquely identify the appliance” and “[a person of
`
`ordinary skill in the art] would have found it obvious to use a SIM portion in
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`14
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`Patent 8,061,598 B2
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`a ‘Host’ electronic appliance communicating over a cellular network to
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`serve a well—known purpose—uniquely identifying the electronic appliance
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`to a network operator.” Pet. Reply 7—8.
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`We agree with Petitioner. The function of the recited “SIM portion”
`
`is “to identify a user of said portable data carrier to a network operator.”
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`Petitioner proposes to substitute Ginter’s electronic appliance’s “information
`
`used to uniquely identify the appliance” with the user identification means of
`
`a SIM card in order to perform the recited function of “identify[ing] a user
`
`of said portable data carrier to a network operator.” 109 Pet. 72 n.29; Ex.
`
`1121, App’x D, 106—107; Pet. Reply 6—8. The ’598 patent acknowledges
`
`that “a mobile phone SIM (Subscriber Identity Module) card .
`
`.
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`. already
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`include[s] a user identification means, to allow user billing through the
`
`phone network operator.” Ex. 1001, 4:9—13; see also Tr. 103:7—8 (“So
`
`applicants, applicants didn’t need to put more in there because the SIM was
`
`already well understood”). Accordingly, we are persuaded that the
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`substitution of Ginter’s electronic appliance’s “information used to uniquely
`
`identify the appliance” with the user identification means of a SIM card
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`involves nothing more than the simple substitution of one known element for
`
`another or the mere application of a known technique to a piece of prior art
`
`ready for improvement. KSR Int’l Co. v. Teleflex Inc., 550 US. at 417.
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`Lastly, Patent Owner questions whether a SIM card is capable of
`
`providing the number of bits required by Ginter’s “information which can be
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`used to uniquely identify each instance of the portable appliance.” PO Resp.
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`15. Petitioner replies that these arguments are unpersuasive for the same
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`reasons as the arguments made with respect to Stefik. Pet. Reply 9 n.2.
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`15
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`CBM2014-00108
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`Patent 8,061,598 B2
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`We agree that Patent Owner’s arguments are unpersuasive. Despite
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`raising questions about the suitability of a SIM card for containing Ginter’s
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`“information which can be used to uniquely identify each instance of the
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`portable appliance,” Patent Owner provides no evidence suggesting a SIM
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`card is unsuitable. PO Resp. 15; Ex. 2030 ‘H 23. As discussed above with
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`respect to Stefik, the ’598 patent states explicitly that, “[t]he data storage
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`means can, if desired, incorporate the functionality of a mobile phone SIM
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`(Subscriber Identity Module) card.” Ex. 1001, 429—13. According to the
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`’598 patent, the data storage means is “based on a standard smart card.” Ex.‘
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`1001, 11:28—29. Ginter, likewise, discloses that “portable appliance 2600
`
`may have the form factor of a ‘smart card’” and, “[a]lternatively, such a
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`portable electronic appliance 2600 may, for example, be packaged in a
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`PCMCIA card configuration (or the like)” Ex. 1015, 230:20—29. Because
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`Ginter’s portable electronic appliance is implemented either on a smart card,
`
`which the ’5 98 patent acknowledges can incorporate the functionality of a
`
`mobile phone SIM card, or on a PCMCIA card, which is more powerful than
`
`the standard smart card, we are persuaded that one skilled in the art would
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`have found it obvious for Ginter’s portable electronic appliance 2600 to
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`incorporate the functionality of a mobile phone SIM card.
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`We conclude that-Petitioner has shown by a preponderance of the
`
`evidence that claim 26 of the ’598 Patent would have been obvious over
`
`Ginter.
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`IV. MOTIONS TO EXCLUDE
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`A. Petitioner ’s Motion to Exclude
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`Petitioner filed a Motion to Exclude (Paper 37), Patent Owner filed an
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`Opposition to Petitioner’s motion (Paper 43), and Petitioner filed a Reply in
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`16
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`CBM2014-00108
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`Patent 8,061,598 B2
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`support of its motion (Paper 48). Petitioner’s Motion to Exclude seeks to
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`exclude: (1) the testimony of Dr. Katz (Ex. 2030); and (2) the portions of
`
`the Patent Owner’s Response (Paper 23) that refer to, or rely on, that
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`testimony. Paper 37, 3. As movant, Petitioner has the burden of proof to
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`establish that it is entitled to the requested relief. See 37 C.F.R. § 42.20(c).
`
`For the reasons stated below, Petitioner’s Motion to Exclude is denied.
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`Petitioner argues that Dr. Katz’s testimony should be excluded under
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`Federal Rule of Evidence (“FRE”) 702 because he was unable to opine on
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`what a person of Ordinary skill in the art would have understood as of the
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`priority date of the ’598 patent. Paper 37, 5. Specifically, Petitioner refers
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`to Dr. Katz’s deposition testimony that he was “not sure” as to (1) what a
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`person of ordinary skill in the art would have known; (2) the operation of the
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`embodiments described in the ’598 patent; and (3) how a person of ordinary
`
`skill in the art would have interpreted various passages from the cited prior
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`art. Id. at 5—9.
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`Patent Owner counters that Dr. Katz was not sure how to answer the
`
`questions in deposition because “Petitioner never established whose
`
`definition of a POSITA Dr. Katz was to use.” Paper 43, 4—5.
`
`Petitioner replies that Dr. Katz confirmed at the outset of his
`
`‘6,
`deposition that he understood the meaning of counsel’s reference to what a
`
`person of ordinary skill in the art would have understood,’” and that Patent
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`Owner’s counsel objected to almost none of the questions that it now claims
`
`are unclear. Paper 48, 2—4.
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`We have reviewed the deposition testimony of Dr. Katz and determine
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`that excluding the testimony, in its entirety, is not warranted. We assess
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`Petitioner’s arguments with respect to the weight to be
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