`Tel: 571-272-7822
`
`Paper 23
`Entered: April 10, 2015
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00016
`Patent 8,033,458 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS
`Administrative Patent Judges.
`
`PLENZLER, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`and Denying Motion for Joinder
`37 C.F.R. § 42.208
`37 C.F.R. § 42.222(b)
`
`
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`
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`
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`CBM2015-00016
`Patent 8,033,458 B2
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`INTRODUCTION
`
`A. Background
`Apple Inc. (“Petitioner”) filed a Corrected Petition requesting covered
`business method patent review of claims 1, 6, 8, 10, and 11 (the “challenged
`claims”) of U.S. Patent No. 8,033,458 (Ex. 1201, “the ’458 patent”) pursuant
`to § 18 of the Leahy-Smith America Invents Act (“AIA”).1 Paper 9 (“Pet.”).
`Petitioner also filed a Motion for Joinder. Paper 3 (“Mot.”). Smartflash
`LLC (“Patent Owner”) filed a Preliminary Response (Paper 19, “Prelim.
`Resp.”) and an Opposition to the Motion for Joinder (Paper 10, “Opp.”).
`Petitioner filed a Reply in support of its Motion for Joinder. Paper 18
`(“Reply”).
`We have jurisdiction under 35 U.S.C. § 324(a), 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.”
`Upon consideration of the Petition and Preliminary Response, we
`determine that Petitioner has demonstrated that it is more likely than not that
`the challenged claims are unpatentable. Accordingly, we institute a covered
`business method review of claims 1, 6, 8, 10, and 11 of the ’458 patent.
`Petitioner’s Motion for Joinder is denied.
`
`B. Asserted Grounds
`Petitioner argues that the challenged claims are unpatentable based on
`the following grounds:
`
`
`1 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
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`2
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`Basis Claims Challenged
`References
`§ 101 1, 6, 8, 10, and 11
`Not Applicable
`§ 112 11
`Not Applicable
`Stefik2 and Ahmad3
`§ 103 6 and 8
`Stefik, Ahmad, and Kopp4
`§ 103 6 and 8
`Stefik, Ahmad, and Sato5
`§ 103 6 and 8
`§ 103 6 and 8
`Stefik, Ahmad, Kopp, and Sato
`Stefik, Ahmad, and Ginter6
`§ 103 10 and 11
`Stefik, Ahmad, Kopp, and Ginter § 103 10 and 11
`Petitioner also provides a declaration from Anthony J. Wechselberger.
`Ex. 1220.
`
`C. Related Matters
`The parties indicate that the ’458 patent is the subject of the following
`district court cases: Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447
`(E.D. Tex.); Smartflash LLC v. Samsung Elecs Co., Case No. 6:13-cv-448
`(E.D. Tex.). Pet. 17–18; Paper 8, 3. Patent Owner also indicates that the
`’458 patent is the subject of a third district court case: Smartflash LLC v.
`Google, Inc., Case No. 6:14-cv-435 (E.D. Tex.). Paper 8, 3.
`Petitioner previously filed two Petitions for covered business method
`patent review of the ’458 Patent: CBM2014-00106 and CBM2014-00107.
`Those petitions were instituted under 35 U.S.C. § 103 with respect to claim
`1. Apple Inc. v. Smartflash LLC, Case CBM2014-00106, Slip Op. at 26
`
`
`2 U.S. Patent No. 5,530,235 (Ex. 1213) (“Stefik ’235”), and U.S. Patent No.
`5,629,980 (Ex. 1214) (“Stefik ’980”) (collectively, “Stefik”).
`3 U.S. Patent No. 5,925,127 (Ex. 1203) (“Ahmad”).
`4 U.S. Patent No. 5,940,805 (Ex. 1205) (“Kopp”).
`5 JP Patent Application Publication No. H11-164058 (including translation),
`published June 18, 1999 (Ex. 1218) (“Sato”).
`6 U.S. Patent No. 5,915,019 (Ex. 1215) (“Ginter”).
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`3
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`Patent 8,033,458 B2
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`(PTAB Sept. 30, 2014) (Paper 8). 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
`Petitioner.
`Concurrent with the filing of this Petition, Petitioner filed three other
`Petitions for covered business patent review challenging claims of patents
`owned by Patent Owner and disclosing similar subject matter: CBM2015-
`00015, CBM2015-00017, and CBM2015-00018.
`
`D. The ’458 Patent
`The ’458 patent is titled “Data Storage and Access Systems,” and is
`directed to a portable data carrier for storing and paying for data and to
`computer systems for providing access to the stored data. Ex. 1201, 1:21–
`23. Figure 9 of the ’458 patent, reproduced below, illustrates components of
`a portable data carrier.
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`4
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`Figure 9 is a schematic diagram of the components of portable data carrier
`202. Portable data carrier 202 is shown as a “smart Flash card.” Id. at 17:6–
`8.
`
`The ’458 patent explains that portable data carrier 202 includes
`processor 210, working memory 212, timing and control logic 208, an
`external interface for reading data from and writing data to portable data
`carrier 202, non-volatile (Flash) content data memory 214, permanent
`program memory 216, and non-volatile data memory 218. Id. at 17:16–24.
`Content data memory 214 stores content data, such as video data. Id. at
`17:66–18:4. Non-volatile data memory 218 includes payment data. Id. at
`17:34–35. Permanent program memory 216 stores code implemented by
`processor 200 that provides payment data to pay for downloaded content.
`Id. at 17:30–35.
`Figure 10 of the ’458 patent, reproduced below, illustrates
`components of a data access device.
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`5
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`Figure 10 is a schematic diagram of data access device 220.
`The ’458 patent describes data access device 220 as “a conventional
`dedicated computer system including a processor 238, permanent program
`memory 236, such as ROM, working memory 234, such as RAM, and
`timing and control logic 226 all coupled by a data and communications bus
`222.” Id. at 18:7–12. Data access device 220 additionally includes smart
`Flash card interface 224 and a user interface having audio interface 228,
`display 230, and user controls 232. Id. at 18:12–17. Permanent program
`memory 236 stores code implemented by processor 238. Id. at 18:18–19.
`A user can access data from portable data carrier 202 via data access
`device 220. Id. at 24:16–49. In order to determine whether access to a
`selected item is permitted, data access device 220 retrieves use status data
`and associated content use rules from portable data carrier 202. Id. at 24:35–
`37. The use status data is compared to the use rules to determine if access is
`permitted. Id. at 24:37–39.
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`6
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`E. Illustrative Claims
`As noted above, Petitioner challenges claims 1, 6, 8, 10, and 11.
`Claims 1 and 6 are independent, with claims 8, 10, and 11 depending from
`claim 6. Claims 1 and 6 are illustrative of the claimed subject matter and are
`reproduced below:
`1. A portable data carrier, comprising:
`an interface for reading and writing data from and to
`the carrier;
`non-volatile data memory, coupled to the interface,
`for storing data on the carrier;
`non-volatile payment data memory, coupled to the
`interface, for providing payment data
`to an
`external device;
`a program store storing code implementable by a
`processor;
`a processor, coupled to the content data memory, the
`payment data memory, the interface and to the
`program store for implementing code in the
`program store; and
`a subscriber identity module (SIM) portion to identify
`a subscriber to a network operator
`wherein the code comprises code to output payment
`data from the payment data memory to the
`interface and code to provide external access to the
`data memory.
`Id. at 25:53–26:3.
`6. A data access device for retrieving stored data
`from a data carrier, the device comprising:
`a user interface;
`a data carrier interface;
`a program store storing code implementable by a
`processor; and
`
`7
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`a processor coupled to the user interface, to the data
`carrier interface and to the program store for
`implementing
`the
`stored
`code,
`the
`code
`comprising:
`code to retrieve use status data indicating a use
`status of data stored on the carrier, and use rules
`data indicating permissible use of data stored
`on the carrier;
`code to evaluate the use status data using the use
`rules data to determine whether access is
`permitted to the stored data; and
`code to access the stored data when access is
`permitted.
`
`Id. at 27:8–23.
`
`ANALYSIS
`
`A. Consolidation
`The statutory provision governing consolidation of inter partes review
`proceedings is 35 U.S.C. § 325(c), which reads as follows:
`(c) JOINDER. — If more than 1 petition for a post-grant review
`under this chapter is properly filed against the same patent and
`the Director determines that more than 1 of these petitions
`warrants the institution of a post-grant review under section
`324, the Director may consolidate such reviews into a single
`post-grant review.
`Petitioner moves to consolidate this proceeding with CBM2014-
`00106.7 Mot. 2. In CBM2014-00106, we instituted trial on claim 1 of the
`’458 patent under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC,
`CBM2014-00106, Paper 8, 26 (PTAB Sept. 30, 2014). We declined to
`
`7 Petitioner refers to Section 325(c) and seeks “joinder.” Although that
`provision is titled “Joinder,” it grants the Director authority only to
`“consolidate.” Thus, we treat Petitioner’s request as a request to consolidate
`pursuant to Section 325(c).
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`8
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`institute trial on claims 6–8, 10, and 11 based on the prior art cited in that
`petition. Id. A Patent Owner Response was filed on February 27, 2015.
`CBM2014-00106, Paper 23.
`Petitioner argues that consolidating this proceeding with CBM2014-
`00106 will secure the just, speedy, and inexpensive resolution of these
`proceedings. Mot. 4. Petitioner argues that this Petition involves the same
`patent, same parties, same counsel, same expert, and one of the same prior
`art references as CBM2014-00106. Id. at 5–6. Petitioner argues that the
`“significant overlap in subject matter and prior art” lead to significant
`efficiencies in briefing, discovery (i.e., depositions), and argument. Id. at 7.
`Petitioner also argues that “[j]oinder here need not have any appreciable
`effect on the trial schedule of [CBM2014-00106]” because the due dates in
`this proceeding could be compressed without unfairly prejudicing either
`party. Id. at 8. Finally, Petitioner requests, in the event consolidation is
`denied, that we coordinate the schedule in this proceeding with CBM2014-
`00106 such that, at minimum, oral arguments in the two proceedings occur
`together. Id. at 9.
`Patent Owner argues that Petitioner has filed a total of twenty-one
`petitions—“three, four, or five per patent”—over an eight month period and,
`therefore, not even consolidation will secure the just, speedy, and
`inexpensive resolution of these proceedings. Opp. 3–4. According to Patent
`Owner, the Petitioner’s motion to consolidate is untimely because the
`changes made in the Corrected Petition were extensive enough to warrant
`according a new filing date of November 21, 2014 (the date of the Corrected
`Petition), which is more than one month after September 30, 2014, the date
`on which CBM2014-00106 was instituted. Opp. 5–7. Patent Owner also
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`9
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`points out that consolidation will not streamline discovery because Petitioner
`has filed five additional petitions for covered business method patent review
`that will not be entitled to consolidation with the earlier-filed proceedings
`and, therefore, at least those five Petitions, assuming they are instituted, will
`not be on the same schedule. Id. at 8–9. Patent Owner argues that
`Petitioner’s request for coordinated schedules should be denied for the same
`reasons. Id. at 8.
`Petitioner replies that it timely filed the instant Petition and Motion
`for Joinder. Reply 3–4. Petitioner also argues that the later-filed petitions
`for covered business method patent review identified by Patent Owner are
`not relevant to whether to consolidate this proceeding with an earlier
`proceeding involving the ’458 patent because those later-filed petitions
`relate to two different patents for which no trial has been instituted yet. Id.
`at 4–5.
`We have considered Petitioner’s arguments in support of
`consolidation and Patent Owner’s arguments in opposition. In CBM2014-
`00106, we instituted under 35 U.S.C. § 103 whereas, in this proceeding, we
`institute only under 35 U.S.C. § 101. We determine that the proceedings
`involve non-overlapping grounds, and thus, we are not persuaded that
`consolidation is warranted or justified on the facts presented. As discussed
`above, consolidation of two or more proceedings for covered business
`method patent review is discretionary. See 35 U.S.C. § 325(c). We decline
`to exercise that discretion to consolidate these proceedings. Likewise, we do
`not exercise our discretion to coordinate the schedule in this case with that of
`CBM2014-00106, given that we instituted trial in CBM2014-00106 on
`September 30, 2014, more than six months ago. See 37 C.F.R. § 42.222(a).
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`10
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`B. 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); see also In re Cuozzo Speed Techs., LLC., 778 F.3d
`1271, 1281–82 (Fed. Cir. 2015) (“Congress implicitly adopted the broadest
`reasonable interpretation standard in enacting the AIA,” and “the standard
`was properly adopted by PTO regulation.”). Applying that standard, we
`interpret the claim terms of the ’458 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). Petitioner
`proposes constructions for several terms (Pet. 19–24), and Patent Owner
`offers no proposed claim constructions. For purposes of this decision, we
`construe the claim terms “use rules” and “use rules data.”
`The term “use rules data” is recited in claim 6, and “use rules” is
`recited in claim 11. Petitioner proposes that “use rules” be construed to
`mean “rules specifying a condition under which access to content is
`permitted” and “use rules data” to mean “data for rules specifying a
`condition under which access to content is permitted.” Pet. 21 (citing Apple
`Inc. v. Smartflash LLC, Case CBM2014-00108, Slip Op. at 7 (PTAB Sept.
`30, 2014) (Paper 8) (construing “use rule” in related U.S. Patent No.
`8,061,598); Apple Inc. v. Smartflash LLC, CBM2014-00112, Slip Op. at 7
`(PTAB Sept. 30, 2014) (Paper 7) (construing “use rule data” in related U.S.
`Patent No. 7,942,317)).
`The ’458 patent describes “use rules” as “for controlling access to the
`stored content” (Ex. 1201, Abstract) and as “indicating permissible use of
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`11
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`data stored on the carrier” (id. at 9:14–16). The ’458 patent also describes
`“evaluating the use status data using the use rules to determine whether
`access to the stored data is permitted.” Id. at 6:38–40; see also id. at 21:50–
`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 rules” as “rules specifying a condition under which access to content is
`permitted.”
`The ’458 patent describes “use rule data” as “comprising a list of
`values (i.e. content data item prices) and corresponding levels of permitted
`usage.” Ex. 1201, 14:66–15:1 (emphasis added). The ’458 patent further
`explains that “[t]hus a value of £1 might permit ten plays of a music track,
`while the value of £10 might permit an unlimited number of plays of the
`track and copying of the track for personal use.” Id. at 15:1–4.
`Accordingly, for purposes of this decision, we construe “use rules data” as
`“data for a rule specifying a condition under which access to content is
`permitted.”
`
`C. Covered Business Method Patent
`Section 18 of the AIA 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 C.F.R. § 42.301(a). A patent need have only one
`claim directed to a covered business method to be eligible for review. See
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`12
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`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 claim 1 “concerns a computer system
`(corresponding to methods claimed elsewhere in the patent family) for
`performing data processing and other operations used in the practice,
`administration, or management of a financial activity and service” because
`it “explicitly describes storing and providing payment data to a payment
`validation system.” Pet. 12. Based on this record, we agree with Petitioner
`that the subject matter recited by claim 1 is directed to activities that are
`financial in nature, namely “providing payment data to an external device,”
`which is recited in the claim. Electronic transfer of money is a financial
`activity, and providing for such a transfer amounts to a financial service.
`This is consistent with the specification of the ’458 patent, which confirms
`claim 1’s connection to financial activities by stating that the invention
`“relates to a portable data carrier for storing and paying for data.” Ex. 1201,
`1:21–23. The specification also states repeatedly that the disclosed
`invention involves handling payment data. See, e.g., Ex. 1201, 17:30–42,
`17:49–53.
`Patent Owner disagrees that claim 1 satisfies the financial in nature
`requirement of AIA § 18(d)(1), arguing that that section should be
`interpreted narrowly to cover only technology used specifically in the
`financial or banking industry. Prelim. Resp. 5–8. Patent Owner cites to
`various portions of the legislative history as support for its proposed
`interpretation. Id.
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`13
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`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)(1). Further, contrary to Patent Owner’s view of the legislative
`history, the legislative history indicates that the phrase “financial product or
`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.’” Id. (citing 157 Cong.
`Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`In addition, Patent Owner asserts that claim 1 is not directed to an
`apparatus or method that is financial in nature because claim 1 “omits the
`specifics of how payment is made.” Prelim. Resp. 9. 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. Id. We determine that because claim 1 recites payment
`data, as Patent Owner acknowledges, the financial in nature requirement of
`§ 18(d)(1) is satisfied.
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`For the reasons stated above, and based on the particular facts of this
`proceeding, we conclude that the ’458 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 1 does not fall within § 18(d)(1)’s
`exclusion for “technological inventions.” Pet. 13–17. In particular,
`Petitioner argues that claim 1 “does not claim ‘subject matter as a whole
`[that] recites a technological feature that is novel and unobvious over the
`prior art[] and solves a technical problem using a technical solution.’”
`Pet. 15 (quoting 37 C.F.R. § 42.301(b)) (emphases in original). Patent
`Owner disagrees and argues that the “subscriber identity module (SIM)
`portion” qualifies as a novel and unobvious technological feature. Prelim.
`Resp. 10–12.
`We are persuaded that claim 1 as a whole does not recite a
`technological feature that is novel and unobvious over the prior art.
`Although claim 1 recites a “subscriber identity module (SIM) portion,” the
`specification indicates that SIM cards were known. The specification states,
`for example, that “mobile phone SIM (Subscriber Identity Module) card[s] .
`. . already include a user identification means, to allow user billing through
`the phone network operator.” Ex. 1201, 4:10–13.
`In addition, the ’458 patent makes clear that the asserted novelty of
`the invention is not in any specific improvement of hardware, but in the
`method of controlling access to data. For example, the ’458 patent states
`that “there is an urgent need to find a way to address the problem of data
`piracy” (id. at 1:52–55), and provides the example of a “smart Flash card”
`for a data carrier, referring to “the ISO (International Standards
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`Organization) series of standards, including ISO 7810, ISO 7811, ISO 7812,
`ISO 7813, ISO 7816, ISO 9992 and ISO 10102” (id. at 17:8–9, 11–15) for
`further details on smart cards. Thus, we determine that claim 1 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 1 falls within § 18(d)(1)’s
`exclusion for “technological inventions” because it is directed towards
`solving the technological problem of “[providing] a portable data carrier that
`allows a subscriber to be identified to a network operator” with the
`technological solution of “a subscriber identity module (SIM) portion to
`identify the subscriber to the network operator.” Prelim. Resp. 11. We are
`not persuaded by this argument because, as Petitioner argues, the problem
`being solved by claim 1 is a business problem—data piracy. Pet. 16–17.
`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. 1201, 2:11–15. Thus, based
`on the particular facts of this proceeding, we conclude that claim 1 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 ’458 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.
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`D. 35 U.S.C. § 101
`Petitioner challenges claims 1, 6, 8, 10, and 11 as being directed to
`patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 24–36. Patent
`Owner does not address the merits of this challenge. See Prelim. Resp. 12–
`15. Analyzing the challenged claims using the two-step process applied
`recently in Alice Corp. Pty, Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014),
`Petitioner asserts that all the challenged claims are directed to an abstract
`idea without additional elements that transform the claims into a patent-
`eligible application of that idea. Pet. 24–36. Specifically, Petitioner argues
`that the challenged claims are directed to the abstract idea of “payment for
`something, and/or of controlling access to something.” Id. at 26.
`We agree with Petitioner that the challenged claims of the ’458 patent
`are more likely than not directed to patent-ineligible subject matter. 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, 713–14 (Fed. Cir. 2014). Here, each of the
`challenged claims recites a “machine,” i.e., a “portable data carrier” (claim
`1) or a “data access device” (claims 6–8, 10, and 11), 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, 134 S. Ct. at 2354 (2014) (citing Assoc. for Molecular
`Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal
`quotation marks and brackets omitted)).
`We are persuaded that the challenged claims are more likely than not
`drawn to a patent-ineligible abstract idea. In Alice, the Supreme Court
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`reiterated the framework set forth previously in Mayo Collaborative Servs.
`v. Prometheus Labs., 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.
`If so, the second step in the analysis is to consider the elements of the claims
`“individually and ‘as an ordered combination’” to determine whether there
`are additional elements that “‘transform the nature of the claim’ into a
`patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1291, 1297).
`In other words, the second step is to “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.’” Id. (brackets in original) (quoting Mayo, 132 S.
`Ct. at 1294).
`As discussed above, the ’458 patent discusses addressing recording
`industry concerns of data pirates offering unauthorized access to widely
`available compressed audio recordings. Ex. 1201, 1:20–55. The ’458 patent
`proposes to solve this problem by restricting access to data on a device based
`upon satisfaction of use rules linked to payment data. Id. at 9:7–25. The
`’458 patent makes clear that the heart of the claimed subject matter is
`restricting access to stored data based on supplier-defined access rules and
`payment data. Id. Abstract, 1:59–2:15. We are, thus, persuaded, on this
`record, that the claimed device is directed to an abstract idea. See Alice, 134
`S. Ct. at 2356 (holding that the concept of intermediated settlement at issue
`in Alice was an abstract idea); Accenture Global Servs., GmbH v. Guidewire
`
`18
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`Patent 8,033,458 B2
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`Software, 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”).
`Turning to the second step of the analysis, we look for additional
`elements that can “transform the nature of the claim” into a patent-eligible
`application of an abstract idea. Mayo, 132 S. Ct. at 1297. On this record,
`we are not persuaded that the challenged claims of the ’458 patent 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 1345 (holding claims
`directed to the abstract idea of “generating tasks [based on] rules . . . to be
`completed upon the occurrence of an event” to be unpatentable even when
`applied in a computer environment and within the insurance industry).
`The specification treats as well-known all potentially technical aspects
`of the claims, including “interface,” “data memory,” “program store,”
`“processor,” “data carrier,” and the various “code to” limitations recited in
`the challenged claims. Although claim 1 recites a “subscriber identity
`module (SIM) portion to identify a subscriber to a network operator,” the
`specification does not purport that SIM cards are novel and, instead, explains
`that “mobile phone SIM (Subscriber Identity Module) card[s] . . . already
`include a user identification means, to allow user billing through the phone
`network operator.” Ex. 1201, 4:10–13. The linkage of existing hardware
`devices to existing payment validation processes and supplier-defined access
`rules appear to be “‘well-understood, routine, conventional activit[ies]’
`previously known to the industry.” Alice, 134 S. Ct. at 2359; Mayo, 132 S.
`Ct. at 1294.
`
`19
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`CBM2015-00016
`Patent 8,033,458 B2
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`Having considered the information provided in the Petition and the
`Preliminary Response, we are persuaded that Petitioner has demonstrated
`that it is more likely than not that the challenged claims are unpatentable
`under 35 U.S.C. § 101. However, because we already instituted upon claim
`11 under 35 U.S.C. § 101 in CBM2014-00192, and because whether claim
`11 is directed to patent-eligible subject matter is an issue of law, we exercise
`our discretion under 35 U.S.C. § 325(d) to decline to institute a covered
`business method patent review of claim 11 under this ground in this
`proceeding.
`Patent Owner argues that Petitioner’s assertion of this ground is
`untimely because Petitioner “provides no valid reason why it did not raise
`this purely legal issue as grounds for invalidity in its two prior petitions filed
`long before the instant Corrected Petition.” Prelim. Resp. 13. According to
`Patent Owner,
`[A]llowing Apple to raise new grounds of invalidity that it
`could have and should have raised in its March 31, 2014
`petitions encourages Apple’s piecemeal invalidity challenges to
`Patent Owner’s patent claims and runs afoul of the Board’s
`charge to ‘secure the just, speedy, and inexpensive resolution’
`of Apple’s covered business method challenges to the ‘458
`Patent.
`Id. at 14. Patent Owner, however, cites no statutory or regulatory authority
`precluding Petitioner from asserting this ground. Moreover, Patent Owner
`acknowledges that the Supreme Court’s June 19, 2014, decision in Alice was
`decided after Petitioner’s original petitions were filed on April 1, 2014. Id.
`at 13. Thus, on this record, we are not persuaded that Petitioner’s assertion
`of a new ground based on 35 U.S.C. § 101 is untimely.
`
`20
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`CBM2015-00016
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`
`Conclusion
`On this record, Petitioner has established that it is more likely than not
`that claims 1, 6, 8, and 10 are unpatentable under 35 U.S.C. § 101.
`
`E. Indefiniteness of Claim 11
`Petitioner challenges claim 11 as being indefinite under 35 U.S.C.
`§ 112, ¶ 2.8 Pet. 77–78. Claim 6 recites “use rules data,” and does not recite
`“use rules.” Claim 11, which depends from claim 6, however, recites “said
`use rules” in its initial instance.
`Although lack of antecedent basis alone is insufficient to render a
`claim indefinite, here the lack