Trials@uspto.gov
`Tel: 571-272-7822
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`Paper 52
`Entered: September 25, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2014-001061
`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.
`
`FINAL WRITTEN DECISION
`
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`1 Case CBM2014-00107 has been consolidated with the instant proceeding.
`
`
`
`

`
`CBM2014-00106
`Patent 8,033,458 B2
`
`I.
`
`INTRODUCTION
`
`A.
`
`Background
`
`Petitioner, Apple Inc. (“Apple”), filed two Petitions to institute
`
`covered business method patent review of claims 1, 6–8, 10, and 11 (“the
`
`challenged claims”) of U.S. Patent No. 8,033,458 B2 (Ex. 1001, “the ’458
`
`patent”) pursuant to § 18 of the Leahy-Smith America Invents Act
`
`(“AIA”). CBM2014-00106 (Paper 2, “106 Pet.”) and CBM2014-00107
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`(Paper 2, “107 Pet.”).2 On September 30, 2014, we consolidated
`
`CBM2014-00106 and CBM2014-00107 and instituted a transitional
`
`covered business method patent review (Paper 8, “Decision to Institute” or
`
`“Dec.”) based upon Petitioner’s assertion that claim 1 is unpatentable
`
`based on the following grounds:
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`Reference[s]3
`
`Basis
`
`Claims Challenged
`
`Stefik ’2354 and Stefik ’9805
`
`Ginter6
`
`§ 103(a)
`
`§ 103(a)
`
`1
`
`1
`
`Dec. 26. Petitioner also provides declarations from Anthony J.
`
`Wechselberger (“Wechselberger Declaration.”). 106 Ex. 1021; 107 Ex.
`
`1121.
`
`
`2 Unless otherwise specified, hereinafter, paper numbers refer to paper
`numbers in CBM2014-00106.
`3 Exhibits with numbers 1001–1029 were filed in CBM2014-00106 and
`those with numbers 1101–1129 were filed in CBM2014-00107. CBM2014-
`00106 additionally includes Exhibits 1030–1035. For purposes of this
`decision, where the two cases have duplicate exhibits, we refer to the exhibit
`filed in CBM2014-00106.
`4 U.S. Patent No. 5,530,235 (June 25, 1996) (Ex. 1013, “Stefik ’235”).
`5 U.S. Patent No. 5,629,980 (May 13, 1997) (Ex. 1014, “Stefik ’980”).
`6 U.S. Patent No. 5,915,019 (June 22, 1999) (Ex. 1015, “Ginter”).
`
`2
`
`

`
`CBM2014-00106
`Patent 8,033,458 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. (“Katz Declaration”). Ex. 2029. Petitioner filed a
`
`Reply (Paper 33, “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 51, “Tr.”).
`
`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 1 of the ’458 patent is
`
`unpatentable.
`
`B. The ’458 Patent
`
`The ’458 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,
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`have an urgent need to address the prevalence of “data pirates” who make
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`proprietary data available over the internet without authorization. Id. at
`
`1:29–55. The ’458 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 2:11–15.
`
`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
`
`3
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`

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`CBM2014-00106
`Patent 8,033,458 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 2:1–5.
`
`The ’458 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 ’458 patent and identify the following district court case: Smartflash
`
`LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D. Tex.). See, e.g., 106 Pet. 20;
`
`106 Paper 5, 2. The parties also indicate that the ’458 patent and other
`
`patents in the same patent family are the subject of a several other district
`
`court cases. Id.
`
`In addition to the 106 and 107 Petitions, Apple and other petitioners
`
`have filed numerous other Petitions for covered business method patent
`
`review challenging claims of patents owned by Smartflash and disclosing
`
`similar subject matter.
`
`D. The Instituted Claim
`
`Apple challenges claim 1 of the ’458 patent. Claim 1 recites the
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`following:
`
`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;
`
`4
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`

`
`CBM2014-00106
`Patent 8,033,458 B2
`
`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.
`
`II.
`
`EVIDENTIARY MATTERS
`
`A. Wechselberger Declaration
`
`Patent Owner contends that the Wechselberger declaration should be
`
`given little or no weight. PO Resp. 5–8.
`
`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
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`field.” Dec. 4, n.11. 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. 5–7. In addition, referring to excerpts from
`
`Mr. Wechselberger’s deposition, Patent Owner contends that Mr.
`
`5
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`CBM2014-00106
`Patent 8,033,458 B2
`
`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 5–6. Thus, according to Patent Owner, should we
`
`afford any weight to Mr. Wechselberger’s testimony, we would be accepting
`
`his opinion without knowing “‘the underlying facts . . . on which the opinion
`
`is based’ (i.e., how much evidence he thinks show any of his opinions
`
`discussed therein).” Id. at 8.
`
`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
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`‘preponderance of standard’ expressly in order for the expert opinion to be
`
`accorded weight.” Pet. Reply 24.
`
`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 C.F.R. § 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.
`
`6
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`

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`CBM2014-00106
`Patent 8,033,458 B2
`
`Wechselberger’s testimony and determine the appropriate weight to accord
`
`that particular testimony.
`
`B. Katz Declaration
`
`Petitioner contends that the Katz declaration should be given little or
`
`no weight. Pet. Reply 19–24.
`
`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.” Id. at 19. 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
`
`challenged patent[].” Id. at 19–22. 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 24.
`
`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.
`
`7
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`

`
`CBM2014-00106
`Patent 8,033,458 B2
`
`III. ANALYSIS
`
`A. Claim Construction
`
`We construe all terms, whether or not expressly discussed here, using
`
`the broadest reasonable construction in light of the ’458 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 in enacting the AIA,” and “the
`
`standard was properly adopted by PTO regulation.”). For purposes of this
`
`Final Written Decision, we determine that “payment data” is the only term
`
`requiring an express construction in order to conduct properly our analysis
`
`of the prior art.
`
`“payment data”
`
`Petitioner asserts that “[f]or review purposes, [payment data] is
`
`construed to mean ‘data representing payment made for requested content
`
`data’ and is distinct from ‘access control data.’” 106 Pet. 22; 107 Pet. 24.
`
`Patent Owner disagrees, arguing that the term “payment data” should be
`
`interpreted to mean “data that can be used to make payment for content.”
`
`PO Resp. 10.
`
`Although Petitioner and Patent Owner disagree on the proper broadest
`
`reasonable construction of the term “payment data,” both proposed
`
`constructions incorporate an element of timing. The main dispute between
`
`the parties is the timing of “payment data” in relation to the actual payment
`
`operation. For example, Petitioner argues that the ’458 patent’s definition of
`
`the term “encompasses data relating to either concurrent or past payment.”
`
`Pet. Reply 5. In support, Petitioner refers (Pet. Reply 3–4) to the following
`
`disclosure from the specification of the ’458 patent:
`
`8
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`

`
`CBM2014-00106
`Patent 8,033,458 B2
`
`“[t]he payment data received may either be data relating to an
`actual payment made to the data supplier, or it may be a record
`of a payment made to an e-payment system . . . .”
`
`Ex. 1001, 6:60–63 (emphasis added).
`
`Patent Owner, on the other hand, argues that the ’458 patent discloses
`
`that “payment data” exists prior to the payment operation, i.e., “used for
`
`making a payment.” PO Resp. 9 (emphasis omitted). In support of its
`
`argument that “‘payment data’ is used for making a payment,” Patent Owner
`
`refers to the following disclosure from the specification of the ’458 patent:
`
`“[P]ayment data for making a payment . . . is received from the smart Flash
`
`card by the content access terminal and forwarded to an e-payment system.”
`
`Id. (citing Ex. 1001, 20:59–62).
`
`We are persuaded that the broadest reasonable interpretation of the
`
`term “payment data,” encompasses both Petitioner’s and Patent Owner’s
`
`definitions of the term. As used in the ’458 patent, “payment data”
`
`encompasses data relating to future, current, and past payments. In other
`
`words, we are persuaded that the ’458 patent does not incorporate an
`
`element of timing into the definition of payment data. First, the plain and
`
`ordinary meaning of the two words that make up the term—“payment” and
`
`“data”—do not incorporate any notion of time and nothing about their
`
`combination changes that determination.
`
`Second, we agree with both parties that language in the ’458 patent
`
`supports “payment data” representing data existing prior to, concurrent with,
`
`and after payment for the requested content. For example, the ’458 patent
`
`states that “payment data for making a payment to the system owner is
`
`received from the smart Flash card by the content access terminal and
`
`forwarded to an e-payment system.” Ex. 1001, 20:59–62. We agree with
`
`9
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`CBM2014-00106
`Patent 8,033,458 B2
`
`Patent Owner that this language indicates that payment data exists prior to
`
`the payment being made for the requested content. See PO Resp. 9–10.
`
`Petitioner does not address this language. See Pet. Reply 4–6. In addition,
`
`we agree with Petitioner that the language in the ’458 patent, “payment data
`
`received may either be data relating to an actual payment made to the data
`
`supplier, or it may be a record of a payment made to an e-payment system,”
`
`(Ex. 1001, 6:60–63) clearly shows that “payment data,” includes data for
`
`payments that have already been made. See Pet. Reply 4–5.
`
`Moreover, the plain and ordinary meaning of data does not allow for it
`
`to change character based on when it is used in a transaction. For example, a
`
`credit card number may qualify as “data relating to payment” before the
`
`number is processed, while the number is being processed, and after the
`
`number is processed. See Ex. 1015, 232:14–24 (providing credit or debit
`
`card information to a retail terminal). Thus, without an express description
`
`to the contrary, we presume that “payment data” retains the same meaning
`
`before, during, and after the payment operation. Neither party points to any
`
`such contrary description.
`
`In fact, the ’458 patent describes “payment data” in several instances
`
`as data relating to payment for the requested data item. Ex. 1001, 10:8–8,
`
`10:28–30, 10:40–41. Thus, we are persuaded that the broadest reasonable
`
`interpretation of “payment data” as used in the ’458 patent is “data relating
`
`to payment for the requested data item.”
`
`B. Obviousness over Stefik ’235 and Stefik ’980
`
`Petitioner contends that claim 1 would have been obvious over Stefik
`
`’235 and Stefik ’980. 106 Pet. 29–31, 39–56. After considering the
`
`arguments and evidence presented in the 106 Petition and the Preliminary
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`10
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`CBM2014-00106
`Patent 8,033,458 B2
`
`Response (CBM2014-00106, Paper 6), we instituted trial with respect to
`
`claim 1 concluding that Petitioner was likely to prevail in showing
`
`unpatentability under 35 U.S.C. § 103(a) over the combination of Stefik
`
`’235 and Stefik ’980. Dec. 26.
`
`1. Overview of Stefik ’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
`
`documents 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 of Stefik ’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.
`
`3. Analysis
`
`We have reviewed the Petition, the Patent Owner Response, and
`
`Petitioner’s Reply, as well as the relevant evidence discussed in those
`
`papers. We are persuaded that claim 1 would have been obvious over Stefik
`
`’235 and Stefik ’980. The parties’ arguments focus on the “payment data”
`
`and “subscriber identity module (SIM) portion” limitations recited in
`
`claim 1.
`
`“payment data”
`
`Claim 1 recites “non-volatile payment data memory . . . for providing
`
`payment data to an external device” and “code to output payment data from
`
`11
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`

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`CBM2014-00106
`Patent 8,033,458 B2
`
`the payment data memory.” Petitioner contends that Stefik7 teaches these
`
`limitations related to “payment data” because “Stefik discloses a credit
`
`server providing payment data (e.g., billing information; fees; transaction
`
`report) to an external device (e.g., clearinghouse) to carry out transactions
`
`and billing.” 106 Pet. 44, 52. Stefik describes “generat[ing] billing
`
`information for the access which is transmitted to a credit server” (Ex. 1014,
`
`7:34–35) and explains that “[f]or the most part, billing transactions are well
`
`understood in the state of the art” (id. at 29:61–62). We are persuaded by
`
`Petitioner’s contentions regarding Stefik teaching “non-volatile payment
`
`data memory . . . for providing payment data to an external device” and
`
`“code to output payment data from the payment data memory,” based on our
`
`construction of “payment data” discussed above.
`
`Patent Owner’s response to Petitioner’s contentions regarding
`
`“payment data” focus on Petitioner’s alleged use of the incorrect
`
`construction of “payment data,” arguing that Stefik is directed to “post-usage
`
`processing.” PO Resp. 11–13. For example, Patent Owner argues that “as
`
`cited throughout the 00106 Petition, Stefik ’235 and Stefik ’980 both refer to
`
`‘credit servers’ such that they are not dealing with payments prior to usage.”
`
`Id. at 11. As noted above, we construe “payment data” as “data relating to
`
`payment for the requested data item,” regardless of when the payment
`
`
`7 Petitioner refers to Stefik ’235 and Stefik ’980, collectively, as “Stefik.”
`106 Pet. 27. Petitioner contends that “[b]ecause Stefik ’235 incorporates
`Stefik ’980 by reference, they should be considered a single reference,” and
`additionally provides rationale for the combination the combination of the
`teachings of Stefik ’235 and Stefik ’980. Id., n. 10. In its Response, Patent
`Owner does not dispute Petitioner’s contentions regarding “Stefik” being a
`single reference, or Petitioner’s rationale for combining the teachings of
`Stefik ’235 and Stefik ’980. See PO Resp. 10–13.
`
`12
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`CBM2014-00106
`Patent 8,033,458 B2
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`operation occurs. Accordingly, Patent Owner’s arguments related to
`
`“payment data,” which are all based on timing, are unpersuasive.8
`
`“subscriber identity module (SIM) portion”
`
`Claim 1 additionally recites a “subscriber identity module (SIM)
`
`portion storing identification data to identify a user of said portable data
`
`carrier to a network operator.”
`
`With respect to this limitation, Patent Owner disputes Petitioner’s
`
`contention that
`
`A [person of ordinary skill in the art] would have been
`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.
`
`106 Pet. 49, n.17. With respect to motivation to modify Stefik, 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. 14. 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 106 Petition nor Dr. Wechselberger explain
`
`why such a change would be necessary. Id.
`
`
`8 When discussing “payment data” at oral hearing relative to IPR2014-
`00112, Patent Owner conceded that if we do not adopt its construction of
`“payment data,” and instead adopt Petitioner’s construction, it has no
`remaining argument as to why Stefik does not teach “payment data.” Tr.
`77:10–78:14. As noted above, we adopt a broader construction of “payment
`data” than that proposed by Petitioner.
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`13
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`Patent 8,033,458 B2
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`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 10; see also id. (“[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-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 ’458 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, 4:9–13; 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’l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007).
`
`14
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`CBM2014-00106
`Patent 8,033,458 B2
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`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
`than the number of bits that a SIM portion would utilize to
`identify a subscriber to a network operator.
`
`PO Resp. 14–15. Patent Owner also argues that the 106 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 15.
`
`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 10. Specifically, Petitioner notes that “Stefik
`
`does not specify a number of bits that must be used for its unique identifier”
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`and “[Patent Owner] presents no evidence substantiating that Stefik’s unique
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`identifier would be incompatible with even the specification of a SIM card
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`(not claimed).” Id. at 10–11.
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`We agree with Petitioner. Despite raising questions about the
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`suitability of a SIM card as Stefik’s repository, Patent Owner presents no
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`evidence suggesting incompatibility. PO Resp. 15; Ex. 2029 ¶¶ 17–18. The
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`’458 patent states explicitly that, “[t]he data storage means can, if desired,
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`incorporate the functionality of a mobile phone SIM (Subscriber Identity
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`Module) card.” Ex. 1001, 4:9–13. According to the ’458 patent, “[t]he data
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`storage means is based on a standard smart card.” Ex. 1001, 11:28–29.
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`Stefik, however, discloses that “smartcard implementations are inadequate
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`for use as a transportable storage medium due to their limited storage
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`capacities.” Ex. 1013, 2:7–9. For that reason, Stefik’s DocuCard is based
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`on the more powerful Personal Computer Memory Card International
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`Association (PCMCIA) card standard. Id. at 4:54–5:22. Because Stefik’s
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`DocuCard is implemented on a PCMCIA card, which is more powerful than
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`the standard smartcard described in the ’458 patent as being capable of
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`incorporating the functionality of a mobile phone SIM card, we are
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`persuaded that Stefik’s DocuCard could also incorporate the functionality of
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`a mobile phone SIM card.
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`For the reasons set forth above, we conclude that Petitioner has
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`shown, by a preponderance of the evidence, that claim 1 of the ’458 patent
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`would have been obvious over Stefik ’235 and Stefik ’980.
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`C. Obviousness over Ginter
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`Petitioner contends that claim 1 would have been obvious over Ginter.
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`107 Pet. 28–32, 44–66. After considering the arguments and evidence
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`presented in the 107 Petition and the Preliminary Response (CBM2014-
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`00107, Paper 6), we instituted trial with respect to claim 1 concluding that
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`Petitioner was likely to prevail in showing unpatentability under 35 U.S.C.
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`§ 103(a) over Ginter. Dec. 25–26.
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`1. Overview of Ginter
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`Ginter discloses a portable “virtual distribution environment”
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`(“VDE”) that can “control and/or meter or otherwise monitor use of
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`electronically stored or disseminated information.” Ex. 1115, Abstract,
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`Fig. 71, 52:26–27.
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`2. Analysis
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`We have reviewed the Petition, the Patent Owner Response, and
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`Petitioner’s Reply, as well as the relevant evidence discussed in those
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`papers. We are persuaded that claim 1 would have been obvious over
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`Ginter. The only contentions that Patent Owner specifically disputes with
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`respect to with respect to Ginter are those related to the “code to output
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`payment data from the payment data memory . . . and code to provide
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`external access to the data memory” and the “subscriber identity module
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`(SIM) portion” limitations recited in claim 1. See PO Resp. 16–22.
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`“code to output payment data”
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`As noted above, claim 1 recites “code to output payment data.”
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`Petitioner cites Ginter’s “audit information” (107 Pet. 51, 53) or,
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`alternatively, “credit or debit card information” (id. at 62–63) as
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`corresponding to the “payment data” in this limitation. For example,
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`Petitioner cites Ginter’s discussion of providing credit or debit card
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`information to a retail terminal as teaching the claimed “code to output
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`payment data from the payment data memory to the interface.” 107 Pet. 62–
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`63 (citing Ex. 1115, 232:19–24). The cited portion of Ginter explains that
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`“portable appliance 2600 VDE secure subsystem may provide authentication
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`and appropriate credit or debit card information to the retail terminal VDE
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`secure subsystem.” Id. at 232:21–24.
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`As Petitioner notes (Pet. Reply 16), Patent Owner does not address
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`Petitioner’s contentions regarding Ginter’s “credit or debit card information”
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`corresponding to the “payment data” recited in claim 1 (see PO Resp. 21–
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`22), which we find persuasive.9 As for Petitioner’s contentions regarding
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`Ginter’s audit information, Patent Owner’s arguments presented in its
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`Response do not dispute that the audit information is “data representing
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`payment for . . . requested content data,” which is the basis for Petitioner’s
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`contentions.10 See Pet. 24. Patent Owner’s arguments are focused solely on
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`the timing of the audit information (i.e., when payment was made) in Ginter.
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`See PO Resp. 21 (“in the context of Ginter, the audit information is for
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`tracking post-usage information, not current purchase information”).
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`As noted above, we construe “payment data” as “data relating to
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`payment for the requested data item,” regardless of when the payment
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`operation occurs. Accordingly, Patent Owner’s arguments related to
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`“payment data,” all of which are based on timing, are unpersuasive.
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`“subscriber identity module (SIM) portion”
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`Patent Owner argues that “[t]he 00107 Petition . . . does not show that
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`it is more likely than not that one of ordinary skill in the art would have
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`considered it obvious for the portable data carrier (e.g. electronic appliance)
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`to communicate with Ginter’s network using a cellular connection, or to
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`include a subscriber identity module (SIM) portion.” PO Resp. 17.
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`Specifically, Patent Owner argues that a cellular network would not have
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`been obvious because Ginter emphasizes security and describes electronic
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`9 Our Decision on Institution noted that Petitioner’s contentions regarding
`Ginter’s “credit or debit card information” corresponding to the “payment
`data” in claim 1’s “code to output payment data” were persuasive. Dec. 22–
`23.
`10 Petitioner’s challenge is based on construing “payment data” as “data
`representing payment made for requested content data.” 107 Pet. 24.
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`appliance 600 communicating only across wired networks, which are more
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`secure than wireless networks. Id. at 18 (citing Ex. 1015, 63:42–67).
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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
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`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
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`its disclosure to transmitting information via ‘wired networks.’” Pet. Reply.
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`18. Patent Owner notes that “the 00107 Petition cites col. 161, lines 5–11
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`[of Ginter], which states that communications with a clearinghouse ‘may be
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`initiated across the electronic highway 108, or across other communications
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`networks such as a LAN, WAN, two-way cable or using portable media
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`exchange between electronic appliances.’” PO Resp. 18. Column 161, lines
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`8–11 of Ginter use the phrase “such as” to indicate that LAN, WAN, and
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`two-way cable are non-limiting examples. As Petitioner also correctly
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`points out, Patent Owner’s expert, Dr. Katz, “admits that Ginter explicitly
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`discloses allowing an electronic appliance to use ‘any of the connections . . .
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`normally used within an electronic appliance,’ including broadcast reception
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`and wireless cellular connections.” Pet. Reply 18 (quoting Deposition of Dr.
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`Katz (Ex. 1031) at 171:19–172:1); see also Ex. 1031, 172:1–173:2-10,
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`175:3-5 (testifying that an electronic appliance can be a pager or phone, both
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`of which were known to communicate wirelessly). Accordingly