`Tel: 571-272-7822
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`Paper 50
`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 CBM2014-001081
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
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`
`
`
`1 Case CBM2014-00109 has been consolidated with the instant proceeding.
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`
`
`CBM2014-00108
`Patent 8,061,598 B2
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`I.
`
`INTRODUCTION
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`A.
`
`Background
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`Petitioner, Apple Inc. (“Apple”), filed two Petitions to institute
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`covered business method patent review of claims 1, 2, 7, 13, 15, 26, and 31
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`“the challenged claims”) of U.S. Patent No. 8,061,598 B2 (Ex. 1001, “the
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`’598 patent”) pursuant to § 18 of the Leahy-Smith America Invents Act
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`“AIA”). CBM2014-00108 (Paper 2, “108 Pet.”) and CBM2014-00109
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`(Paper 2, “109 Pet.”).2 On September 30, 2014, we consolidated
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`CBM2014-00108 and CBM2014-00109 and instituted a transitional
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`covered business method patent review (Paper 8, “Decision to Institute” or
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`“Dec.”) based upon Petitioner’s assertion that claim 26 is unpatentable
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`based on the following grounds:
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`Reference[s]3
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`Basis
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`Claims Challenged
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`Stefik ’2354 and Stefik ’9805
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`Ginter6
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`§ 103(a)
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`§ 103(a)
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`26
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`26
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`Dec. 22. Petitioner also provides declarations from Anthony J.
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`Wechselberger (“Wechselberger Decl.”). 112 Ex. 1021; 113 Ex. 1121.
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`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 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”).
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`2
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`CBM2014-00108
`Patent 8,061,598 B2
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`Subsequent to institution, Patent Owner filed a Patent Owner
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`Response (Paper 23, “PO Resp.”) and, in support, a declaration from
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`Jonathan Katz, Ph.D. (Ex. 2030, “Katz Declaration”). Petitioner filed a
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`Reply (Paper 31, “Pet. Reply”) to Patent Owner’s Response.
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`An oral hearing was held on July 7, 2015, and a transcript of the
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`hearing is included in the record (Paper 49, “Tr.”).
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`We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
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`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
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`For the reasons that follow, we determine that Petitioner has shown by
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`a preponderance of the evidence that claim 26 of the ’598 patent is
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`unpatentable.
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`B. The ’598 Patent
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`The ’598 patent relates to “a portable data carrier for storing and
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`paying for data and to computer systems for providing access to data to be
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`stored” and the “corresponding methods and computer programs.”
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`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
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`1:29–55. The ’598 patent describes providing portable data storage together
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`with a means for conditioning access to that data upon validated payment.
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`Id. at 1:59–2:11. This combination allows data owners to make their data
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`available over the internet without fear of data pirates. Id. at 2:11–15.
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`As described, the portable data storage device is connected to a
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`terminal for internet access. Id. at 1:59–67. The terminal reads payment
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`information, validates that information, and downloads data into the portable
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`3
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`CBM2014-00108
`Patent 8,061,598 B2
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`storage device from a data supplier. Id. The data on the portable storage
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`device can be retrieved and output from a mobile device. Id. at 2:1–4.
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`The ’598 patent makes clear that the actual implementation of these
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`components is not critical and may be implemented in many ways. See, e.g.,
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`id. at 25:49–52 (“The skilled person will understand that many variants to
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`the system are possible and the invention is not limited to the described
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`embodiments.”).
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`C. Related Matters
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`The parties indicate that Smartflash has sued Apple for infringement
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`of the ’598 patent and identify the following district court case: Smartflash
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`LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D. Tex.). See, e.g., 108 Pet. 23;
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`Paper 5, 2. Patent Owner indicates that the ’598 patent and other patents in
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`the same patent family are the subject of several other district court cases.
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`Paper 33, 3–4.
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`In addition to the 108 and 109 Petitions, Apple and other petitioners
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`have filed numerous other Petitions for covered business method patent
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`review challenging claims of patents owned by Smartflash and disclosing
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`similar subject matter.
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`D. The Instituted Claim
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`Apple challenges claim 26 of the ’598 patent. Claim 26 recites the
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`following:
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`26. A portable data carrier comprising:
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`an interface for sending and receiving data from and to the
`carrier;
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`memory, coupled to the interface, for storing data on the carrier;
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`a processor for controlling access to data; and
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`4
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`CBM2014-00108
`Patent 8,061,598 B2
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`a subscriber identity module (SIM) portion storing
`identification data to identify a user of said portable data carrier to a
`network operator.
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`Ex. 1001, 27:45–53.
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`II.
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`EVIDENTIARY MATTERS
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`A. Wechselberger Declaration
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`In its Preliminary Response, Patent Owner argued that we should
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`disregard Mr. Wechselberger’s testimony, but we determined that Patent
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`Owner did not offer any evidence that Mr. Wechselberger “used incorrect
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`criteria, failed to consider evidence, or is not an expert in the appropriate
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`field.” Dec. 16 n.5. Patent Owner renews this contention, arguing in its
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`Response that both declarations by Mr. Wechselberger (Ex. 1021; Ex. 1121)
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`should be given little or no weight because they do not state the evidentiary
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`standard that he used in arriving at his conclusions and, therefore, he “used
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`incorrect criteria.” PO Resp. 4–7. In addition, referring to excerpts from
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`Mr. Wechselberger’s deposition, Patent Owner contends that Mr.
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`Wechselberger “could neither articulate what the difference was between
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`‘substantial evidence’ and ‘preponderance of the evidence,’ nor could he
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`articulate which standard he was supposed to use when alleging invalidity of
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`claims in a patent.” Id. at 5. Thus, according to Patent Owner, should we
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`afford any weight to Mr. Wechselberger’s testimony, we would be accepting
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`his opinion without knowing “‘the underlying facts . . . on which the opinion
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`is based’ (i.e., how much evidence he thinks shows any of his opinions
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`discussed therein).” Id. at 7.
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`In its Reply, Petitioner argues that “Mr. Wechselberger is a highly-
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`qualified expert,” that Patent Owner offers no evidence disputing that he is a
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`qualified expert, and that an expert is not required to “recite or apply the
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`5
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`CBM2014-00108
`Patent 8,061,598 B2
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`‘preponderance of the evidence standard’ expressly in order for the expert
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`testimony to be accorded weight.” Reply 14–15.
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`Patent Owner has not articulated a persuasive reason for giving Mr.
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`Wechselberger’s declarations, as a whole, little or no weight in our analysis.
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`Patent Owner has not cited any authority requiring an expert to recite or
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`apply the “preponderance of the evidence” standard in order for the expert
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`opinion to be accorded weight. Under 37 C.F.R. § 42.1(d), we apply the
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`preponderance of the evidence standard in determining whether Petitioner
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`has established unpatentability. In doing so, it is within our discretion to
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`determine the appropriate weight to be accorded the evidence presented,
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`including expert opinion, based on the disclosure of the underlying facts or
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`data upon which that opinion is based. Thus, we decline to make a
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`determination about Mr. Wechselberger’s opinion, as a whole. Rather, in
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`our analysis we will consider, as it arises, relevant portions of Mr.
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`Wechselberger’s testimony and determine the appropriate weight to accord
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`that particular testimony.
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`B. Katz Declaration
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`Petitioner contends that “Dr. Katz’s unsupported opinions, to the
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`extent they are given any weight at all, should be given far less weight than
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`Mr. Wechselberger’s.” Reply 9. Specifically, Petitioner argues that Dr.
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`Katz is not qualified as a person of ordinary skill in the art under either
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`party’s definition, he repeatedly stated that “he was ‘not sure’ about various
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`technologies that are indisputably in the relevant prior art, and that he does
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`not know what a POSITA would have understood about that technology,”
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`and he repeatedly stated that “he was ‘not sure’ how a POSITA would
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`interpret several passages of the cited prior art and several passages of the
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`6
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`CBM2014-00108
`Patent 8,061,598 B2
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`challenged patent[].” Id. at 9–13. Thus, according to Petitioner, “Dr. Katz
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`(a) does not know this information and is therefore not a qualified expert;
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`and/or (b) did not properly consider the scope and content of the prior art or
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`a POSITA’s understanding of the prior art.” Id. at 14.
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`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
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`weight to be accorded to the evidence presented, including expert opinion,
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`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
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`analysis we will consider relevant portions of Dr. Katz’s testimony as it
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`arises and determine the appropriate weight to accord that particular
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`testimony.
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`III. ANALYSIS
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`A. Claim Construction
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`We construe all terms, whether or not expressly discussed here, using
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`the broadest reasonable construction in light of the ’598 patent specification.
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`See 37 C.F.R. § 42.300(b); see also In re Cuozzo Speed Techs., LLC, 793
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`F.3d 1268, 1278–80 (Fed. Cir. 2015) (“Congress implicitly approved the
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`broadest reasonable interpretation standard in enacting the AIA,” and “the
`
`standard was properly adopted by PTO regulation.”). In the Decision to
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`Institute, we construed the term “use rule” to mean “a rule specifying a
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`condition under which access to content is permitted.” Dec. 7. Neither
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`party contests this construction. We discern no reason to deviate from this
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`construction of “use rule.” Furthermore, for purposes of this Final Written
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`Decision, we need not expressly construe any other claim term.
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`7
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`CBM2014-00108
`Patent 8,061,598 B2
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`B. Obviousness over Stefik ’235 and Stefik ’980
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`Petitioner asserts that claim 26 would have been obvious over the
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`Stefik references alone.7 108 Pet. 63–69. After considering the arguments
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`and evidence presented in the Petition and the Preliminary Response (108,
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`Paper 6), we instituted trial with respect to claim 26 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 the combination of Stefik ’235 and Stefik ’980. Dec. 24.
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`After considering the arguments and evidence presented during the trial, our
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`determination remains unchanged.
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`1. Overview of Stefik ’235
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`Stefik ’235 teaches a portable Document Card (“DocuCard”) for
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`storing information in a digital form, storing usage rights for the
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`information, processing user-initiated functions and requests to access
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`documents stored therein, interfacing to external devices for reading and
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`writing digital information, and allowing a user to directly interact with the
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`DocuCard. Ex. 1013, 2:29–40, 7:35–42.
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`2. Overview of Stefik ’980
`
`Stefik ’980 teaches a “repository” for storing digital works,
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`controlling access to digital works, billing for access to digital works and
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`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.
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`8
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`CBM2014-00108
`Patent 8,061,598 B2
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`3. Analysis
`
`The parties focus on only one claim limitation. For the remaining
`
`limitations, we have reviewed Petitioner’s evidence and argument and agree
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`that Petitioner has shown sufficiently that Stefik teaches those limitations.
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`See 108 Pet. 63–69. We turn now to the disputed limitation.
`
`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 disputes Petitioner’s contention that
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`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.
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`Pet. 65 n.17. With respect to motivation, Patent Owner argues that
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`“[n]either patent identifies anything that indicates that a DocuCard or a
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`repository could be a mobile or cellular phone in which such a memory card
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`would be used.” PO Resp. 9–10. As a result, according to Patent Owner,
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`“there is no reason to change from the ‘unique number assigned to the
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`DocuCard upon manufacture’ to some other identifying information,” and
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`neither the 108 Petition nor Mr. Wechselberger explain why such a change
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`would be necessary. Id. at 10.
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`Petitioner replies that “Stefik expressly discloses that the DocuCard
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`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
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`purpose.” Pet. Reply 4; see also id. at 4–5 (“[A person of ordinary skill in
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`the art] would have found it obvious to embed a SIM portion (which could
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`be, e.g., either memory or a card) in a DocuCard repository for the well-
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`9
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`CBM2014-00108
`Patent 8,061,598 B2
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`known purpose of using the SIM portion to identify the DocuCard repository
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`to a network operator.”).
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`We agree with Petitioner. The function of the recited “SIM portion”
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`is “to identify a user of said portable data carrier to a network operator.”
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`Petitioner proposes to substitute the DocuCard’s unique identifying
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`information with the user identification means of a SIM card in order to
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`perform the recited function of “identify[ing] a user of said portable data
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`carrier to a network operator.” The ’598 patent acknowledges that “a mobile
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`phone SIM (Subscriber Identity Module) card . . . already include[s] a user
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`identification means, to allow user billing through the phone network
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`operator.” Ex. 1001, 4:9–13; see also Tr. 103:7–8 (when discussing the
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`description of the SIM portion in the challenged patent, Counsel for Patent
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`Owner explained that “applicants didn’t need to put more in there because
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`the SIM was already well understood.”). Accordingly, we are persuaded
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`that the substitution of the DocuCard’s unique identifying information with
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`the user identification means of a SIM card involves nothing more than the
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`simple substitution of one known element for another or the mere
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`application of a known technique to a piece of prior art ready for
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`improvement. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007).
`
`With respect to the obviousness of the proposed modification, Patent
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`Owner questions whether a SIM card is capable of performing the functions
`
`of a repository. Specifically, Patent Owner faults the Petition for
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`[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
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`10
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`CBM2014-00108
`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.
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`Id. Patent Owner also argues that the 108 Petition fails to show that a
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`memory card for a mobile or cellular device, such as SIM card, is capable of
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`meeting the requirements of a repository, such as performing the registration
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`process depicted in Figure 3 of Stefik ’235. Id. at 11.
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`Petitioner notes that “[Patent Owner] presents no evidence disputing
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`that a block of memory containing only a single user identifier can be a SIM
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`portion, or that a [person of ordinary skill in the art] would have known how
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`to conform Stefik’s unique identifying number to the well-known SIM
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`specification.” Pet. Reply 4. Specifically, Petitioner notes that “Stefik does
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`not specify a number of bits that must be used for its unique identifier” and
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`“[Patent Owner] presents no evidence substantiating that Stefik’s unique
`
`identifier would be incompatible with even the specification of a SIM card
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`(not claimed).” Id. at 5.
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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. 10; Ex. 2030 ¶ 14. We note
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`again that the ’598 patent states explicitly that, “[t]he data storage means
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`can, if desired, incorporate the functionality of a mobile phone SIM
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`(Subscriber Identity Module) card.” Ex. 1001, 4:9–13. 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. Stefik, however, discloses that “smartcard implementations
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`are inadequate for use as a transportable storage medium due to their limited
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`storage capacities.” Ex. 1013, 2:6–9. For that reason, Stefik’s DocuCard is
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`based 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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`11
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`CBM2014-00108
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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 ’598 patent as being capable of
`
`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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`We conclude that Petitioner has shown by a preponderance of the
`
`evidence that claim 26 of the ’598 Patent would have been obvious over
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`Stefik ’235 and Stefik ’980.
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`C. Obviousness over Ginter
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`Petitioner contends that claim 26 would have been obvious over
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`Ginter. 109 Pet. 68–75. After considering the arguments and evidence
`
`presented in the Petition and the Preliminary Response (109, Paper 6), we
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`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.
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`Dec. 24. After considering the arguments and evidence presented during the
`
`trial, our determination remains unchanged.
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`1. Overview of Ginter
`
`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
`
`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.
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`See 109 Pet. 68–75. We turn now to the disputed limitation.
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`12
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`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 argues that the 109 Petition fails to show that a
`
`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, 161:8–11 (“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
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`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, 161:8–11. As Petitioner also correctly points out, Patent Owner’s
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`expert, Dr. Katz, “admits that Ginter explicitly discloses allowing an
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`electronic appliance to use ‘any of the connections . . . 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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`171:19–172:1)); see also Ex. 1031, 172:1–173:2–10, 175:3–5 (testifying that
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`an electronic appliance can be a pager or phone, both of which were known
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`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,
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`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
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`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
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`appliance to use a cellular connection requiring a SIM card.
`
`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.
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`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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`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
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`of said portable data carrier to a network operator.” 109 Pet. 72 n.29; Ex.
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`1121, App’x D, 106–107; Pet. Reply 6–8. 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, 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
`
`substitution of Ginter’s electronic appliance’s “information used to uniquely
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`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
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`another or the mere application of a known technique to a piece of prior art
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`ready for improvement. KSR Int’l Co. v. Teleflex Inc., 550 U.S. at 417.
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`Lastly, Patent Owner questions whether a SIM card is capable of
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`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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`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 ¶ 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, 4:9–13. 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
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`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,
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`which the ’598 patent acknowledges can incorporate the functionality of a
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`mobile phone SIM card, or on a PCMCIA card, which is more powerful than
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`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
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`evidence that claim 26 of the ’598 Patent would have been obvious over
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`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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`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
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`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).
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`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
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`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
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`questions in deposition because “Petitioner never established whose
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`definition of a POSITA Dr. Katz was to use.” Paper 43, 4–5.
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`Petitioner replies that Dr. Katz confirmed at the outset of his
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`deposition that he understood the meaning of counsel’s reference to “’what a
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`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
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`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 given to relevant
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`portions of Dr. Katz’s testimony, rather than to its admissibility. 37 C.F.R.
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`§ 42.65.
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`B. Patent Owner’s Motion to Exclude
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`Patent Owner filed a Motion to Exclude (Paper 40), Petitioner filed an
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`Opposition to Patent Owner’s motion (Paper 44), and Patent Owner filed a
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`Reply in support of its motion (Paper 47). Patent Owner’s Motion to
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`Exclude seeks to exclude (1) Exhibit 1002; (2) Exhibits 1003–1005, 1019,
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`1022, 1028, and 1029; (3) Exhibits 1006–1008, 1012, and 1020; (4) Exhibits
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`1016–1018; (5) Exhibits 1021 and 1121; (6) portions of Exhibit 1031; and
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`(7) Exhibits 1101–1120 and 1122–1129. Paper 40. As movant, Patent
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`Owner has the burden of proof to establish that it is entitled to the requested
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`relief. See 37 C.F.R. § 42.20(c). For the reasons stated below, Patent
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`Owner’s Motion to Exclude is granted-in-part, denied-in-part, and
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`dismissed- in-part as moot.
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`Exhibit 1002
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`Patent Owner seeks to exclude Exhibit 1002—the First Amended
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`Complaint filed by it in the co-pending litigation—as inadmissible other
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`evidence of the content of a writing (FRE 1004), irrelevant (FRE 401), and
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`cumulative (FRE 403). Paper 40, 2–3; Paper 47, 1–2. Specifically, Patent
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`Owner argues that Petitioner does not need to cite Patent Owner’s
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`characterization of the ’598 patent in the complaint because the ’598 patent
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`itself is in evidence. Moreover, according to Patent Owner, its
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`characterization of the ’598 patent is irrelevant and, even if relevant,
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`cumulative to the ’598 patent itself. Id.
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`Petitioner counters that it relies on Exhibit 1002 not as evidence of the
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`content of the ’598 patent, but to show that Patent Owner’s characterization
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`of the ’598 patent supports Petitioner’s contention that the ’598 patent
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`relates is a covered business method patent. Paper 44, 2. Thus, according to
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`Petitioner, it is highly relevant to the issue of whether the ’598 patent is a
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`covered business method patent. Id. Moreover, contends Petitioner, Patent
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`Owner’s characterization of the ’598 patent in another proceeding is not in
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`the ’598 patent itself, and, therefore, Exhibit 1002 is not cumulative to the
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`’598 patent and FRE 1004 is not applicable. Id.
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`We are persuaded by Petitioner that Exhibit 1002 is offered not for the
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`truth of the matter asserted (i.e., the content of the ’598 patent), but as
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`evidence of how the Patent Owner has characterized the ’598 patent. Patent
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`Owner has not persuaded us that Exhibit 1002 is irrelevant, at least because
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`its characterization of the ’598 patent in prior proceedings are relevant to the
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`credibility of its characterization of the ’598 patent in this proceeding.
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`Accordingly, we decline to exclude this exhibit.
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`Exhibits 1003–1005, 1019, 1022, 1028, and 1029
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`Patent Owner seeks to exclude Exhibits 1003–1005, 1019, 1022,
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`1028, and 1029 as irrelevant under FRE 401 and 402 because they are not
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`cited in the Petition, the Wechsel