throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 47
`Entered: May 26, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`SAMSUNG ELECTRONICS AMERICA, INC., and
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner
`
`and
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2014-001901
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`1 CBM2015-00118 (U.S. Patent 7,334,720 B2) was consolidated with this
`proceeding. Paper 31, 6–7.
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`A. Background
`
`INTRODUCTION
`
`Petitioner, Samsung Electronics America, Inc., Samsung Electronics
`
`Co., Ltd., and Samsung Telecommunications America, LLC (“Samsung”),2
`
`filed a Corrected Petition to institute covered business method patent review
`
`of claims 13 and 14 of U.S. Patent No. 7,334,720 B2 (Ex. 1001, “the ’720
`
`patent”) pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).
`
`Paper 4 (“Pet.”). Patent Owner, Smartflash LLC (“Smartflash”), filed a
`
`Preliminary Response. Paper 7 (“Prelim. Resp.”). On April 2, 2015, we
`
`instituted a covered business method patent review (Paper 9, “Institution
`
`Decision” or “Inst. Dec.”) based upon Samsung’s assertion that claims 13
`
`and 14 are directed to patent ineligible subject matter under 35 U.S.C. § 101.
`
`Inst. Dec. 18.
`
`Subsequent to institution, Smartflash filed a Patent Owner Response
`
`(Paper 23, “PO Resp.”3), and Samsung filed a Reply (Paper 30, “Reply”).
`
`On April 30, 2015, Apple Inc. (“Apple”) filed a Petition to institute a
`
`covered business method patent review of the same claims of the ’720 patent
`
`based on the same grounds. Apple Inc. v. Smartflash LLC, Case CBM2015-
`
`00118 (Paper 2, “Apple Pet.”). Apple simultaneously filed a “Motion for
`
`Joinder” of its newly filed case with Samsung’s previously instituted case.
`
`CBM2015-00118 (Paper 3, “Apple Mot.”). On August 6, 2015, we granted
`
`
`2 Samsung Telecommunications America, LLC, a petitioner at the time of
`filing, merged with and into Samsung Electronics America, Inc. as of
`January 1, 2015. Paper 8.
`
`3 We cite to the redacted Patent Owner response.
`
`2
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`Apple’s Petition and consolidated the two proceedings.4 Paper 31;
`
`CBM2015-00118 (Paper 11).
`
`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 claims 13 and
`
`14 of the ’720 patent are directed to patent ineligible subject matter under
`
`35 U.S.C. § 101.
`
`B. The ’720 Patent
`
`The ’720 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, 1:6–10. Owners of proprietary data, especially audio recordings,
`
`have an urgent need to address the prevalence of “data pirates,” who make
`
`proprietary data available over the Internet without authorization. Id. at
`
`1:15–41. The ’720 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:46–62. According to the ’720 patent, this combination of the
`
`payment validation means with the data storage means allows data owners to
`
`make their data available over the Internet without fear of data pirates. Id. at
`
`1:62–2:3.
`
`As described, the portable data storage device is connected to a
`
`terminal for Internet access. Id. at 1:46–55. The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`storage device from a data supplier. Id. The data on the portable storage
`
`
`4 For purposes of this decision, we will cite only to Samsung’s Petition, and
`refer collectively to Samsung and Apple as “Petitioner.”
`
`3
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`device can be retrieved and output from a mobile device. Id. at 1:56–59.
`
`The ’720 patent makes clear that the actual implementation of these
`
`components is not critical, and the alleged invention may be implemented in
`
`many ways. See, e.g., id. at 26:13–16 (“The skilled person will understand
`
`that many variants to the system are possible and the invention is not limited
`
`to the described embodiments . . . .”).
`
`C. Challenged Claims
`
`Petitioner challenges claims 13 and 14 of the ’720 patent. Claim 13
`
`depends from independent claim 3, which is not explicitly challenged in this
`
`proceeding, and claim 14 is independent. Claims 3, 13, and 14 recite the
`
`following.
`
`A data access terminal for retrieving data from a data supplier
`3.
`and providing the retrieved data to a data carrier, the terminal
`comprising:
`
`a first interface for communicating with the data supplier;
`
`a data carrier interface for interfacing with the data carrier;
`
`a program store storing code; and
`
`a processor coupled to the first interface, the data carrier
`interface, and the program store for implementing the stored code, the
`code comprising:
`
`code to read payment data from the data carrier and to forward
`the payment data to a payment validation system;
`
`code to receive payment validation data from the payment
`validation system;
`
`code responsive to the payment validation data to retrieve data
`from the data supplier and to write the retrieved data into the data
`carrier; and
`
`code responsive to the payment validation data to receive at
`least one access rule from the data supplier and to write the at least
`one access rule into the data carrier, the at least one access rule
`specifying at least one condition for accessing the retrieved data
`
`4
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`written into the data carrier, the at least one condition being dependent
`upon the amount of payment associated with the payment data
`forwarded to the payment validation system.
`
`Ex. 1001, 26:41–67.
`
`13. A data access terminal according to claim 3 integrated with a
`mobile communication device, a personal computer, an audio/video
`player, and/or a cable or satellite television interface device.
`
`Id. at 28:1–4.
`
`14. A method of providing data from a data supplier to a data
`carrier, the method comprising:
`
`reading payment data from the data carrier;
`
`forwarding the payment data to a payment validation system;
`
`retrieving data from the data supplier;
`
`writing the retrieved data into the data carrier;
`
`receiving at least one access rule from the data supplier; and
`
`writing the at least one access rule into the data carrier, the at
`least one access rule specifying at least one condition for accessing
`the retrieved data written into the data carrier, the at least one
`condition being dependent upon the amount of payment associated
`with the payment data forwarded to the payment validation system.
`
`Id. at 28:5–20.
`
`A. Claim Construction
`
`ANALYSIS
`
`Consistent with the statute and the legislative history of the AIA,5 the
`
`Board interprets claim terms in an unexpired patent according to the
`
`broadest reasonable construction in light of the specification of the patent in
`
`which they appear. See In re Cuozzo Speed Techs., LLC, 793 F.3d 1268,
`
`1278–79 (Fed. Cir. 2015), cert. granted sub nom. Cuozzo Speed Techs., LLC
`
`
`5 Leahy-Smith America Invents Act, Pub. L. No. 11229, 125 Stat. 284
`(2011) (“AIA”).
`
`5
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`v. Lee, 136 S. Ct. 890 (mem.) (2016); 37 C.F.R. § 42.100(b). Under that
`
`standard, and absent any special definitions, we give claim terms their
`
`ordinary and customary meaning, as would be understood by one of ordinary
`
`skill in the art at the time of the invention. See In re Translogic Tech., Inc.,
`
`504 F.3d 1249, 1257 (Fed. Cir. 2007). Any special definitions for claim
`
`terms must be set forth with reasonable clarity, deliberateness, and precision.
`
`See In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
`
`For purposes of this Decision, we do not need to expressly construe
`
`any claim term.
`
`B. Statutory Subject Matter
`
`Petitioner challenges claims 13 and 14 as directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101. Pet. 22–37. According to Petitioner,
`
`claims 13 and 14 are directed to an abstract idea without additional elements
`
`that transform the claim into a patent-eligible application of that idea. Id.
`
`Petitioner submits a declaration from Jeffrey A. Bloom, Ph.D. (“Bloom
`
`Declaration”) in support of its Petition.6 Ex. 1003. Smartflash argues that
`
`claims 13 and 14 are directed to statutory subject matter because they are
`
`“rooted in computer technology in order to overcome a problem specifically
`
`arising in the realm of computer networks—that of digital data piracy.” PO
`
`Resp. 13.
`
`
`6 In its Response, Smartflash argues that the Bloom Declaration should be
`given little or no weight. PO Resp. 3–6. Because Smartflash has filed a
`Motion to Exclude that includes a request to exclude Dr. Bloom’s
`Declaration in its entirety, or in the alternative, portions of the declaration
`based on essentially the same argument, we address Smatflash’s argument as
`part of our analysis of the motion to exclude, below.
`
`6
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`1. Abstract Idea
`
`Under 35 U.S.C. § 101, we must first identify whether an invention
`
`fits within one of the four statutorily provided categories of patent-
`
`eligibility: “processes, machines, manufactures, and compositions of
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–714 (Fed. Cir.
`
`2014). Here, claim 13 recites a “machine,” e.g., a “data access terminal,”
`
`and claim 14 recites a “process,” e.g., a “method of providing data” under
`
`§ 101. Section 101, however, “contains an important implicit exception [to
`
`subject matter eligibility]: Laws of nature, natural phenomena, and abstract
`
`ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct.
`
`2347, 2354 (2014) (citing Assoc. for Molecular Pathology v. Myriad
`
`Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal quotation marks and
`
`brackets omitted)). In Alice, the Supreme Court reiterated the framework set
`
`forth previously in Mayo Collaborative Services v. Prometheus
`
`Laboratories, Inc., 132 S. Ct. 1289, 1293 (2012) “for distinguishing patents
`
`that claim laws of nature, natural phenomena, and abstract ideas from those
`
`that claim patent-eligible applications of those concepts.” Alice, 134 S. Ct.
`
`at 2355. The first step in the analysis is to “determine whether the claims at
`
`issue are directed to one of those patent-ineligible concepts.” Id.
`
`According to the Federal Circuit, “determining whether the section
`
`101 exception for abstract ideas applies involves distinguishing between
`
`patents that claim the building blocks of human ingenuity—and therefore
`
`risk broad pre-emption of basic ideas—and patents that integrate those
`
`building blocks into something more, enough to transform them into specific
`
`patent-eligible inventions.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
`
`F.3d 1306, 1332 (Fed. Cir. 2015) (emphasis added); accord id. at 1333–34
`
`7
`
`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`(“It is a building block, a basic conceptual framework for organizing
`
`information . . . .” (emphasis added)). This is similar to the Supreme Court’s
`
`formulation in Bilski v. Kappos, 561 U.S. 593, 611 (2010) (emphasis added),
`
`noting that the concept of risk hedging is “a fundamental economic practice
`
`long prevalent in our system of commerce.” See also buySAFE, Inc. v.
`
`Google, Inc., 765 F.3d 1350, 1353–54 (Fed. Cir. 2014) (stating that patent
`
`claims related to “long-familiar commercial transactions” and relationships
`
`(i.e., business methods), no matter how “narrow” or “particular,” are
`
`directed to abstract ideas as a matter of law). As a further example, the
`
`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
`
`Circuit].” OIP Tech., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
`
`Cir. 2015) (citations omitted).
`
`Petitioner argues that claims 13 and 14 are directed to the abstract idea
`
`of “licensing/regulating access to copyrighted content.” Pet. 24. Although
`
`Smartflash does not concede, in its brief, that claims 13 and 14 are directed
`
`to an abstract idea, it does not persuasively explain how the challenged
`
`claims escape being classified as abstract. PO Resp. 11–24; see also Paper
`
`46 (transcript of oral hearing), 17:9–14 (Smartflash stating that “even if
`
`Patent Owner says nothing about [abstract idea], it is still the Petitioner’s
`
`burden to prove that the claims are directed to an abstract idea.”).
`
`We are persuaded that claims 13 and 14 are drawn to an abstract idea.
`
`Specifically, claims 13 and 14 are directed to performing the fundamental
`
`economic practice of conditioning and controlling access to content based on
`
`payment. For example, claim 3, from which claim 13 depends, and claim 14
`
`recite “the at least one access rule specifying at least one condition for
`
`8
`
`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`accessing the retrieved data written into the data carrier, the at least one
`
`condition being dependent upon the amount of payment associated with the
`
`payment data forwarded to the payment validation system.” Furthermore, as
`
`discussed above, the ’720 patent discusses addressing recording industry
`
`concerns of data pirates offering unauthorized access to widely available
`
`compressed audio recordings. Ex. 1001, 1:15–55. The patent specification
`
`explains that these pirates obtain data either by unauthorized or legitimate
`
`means and then make the data available over the Internet without
`
`authorization. Id. The specification further explains that once data has been
`
`published on the Internet, it is difficult to police access to and use of it by
`
`Internet users who may not even realize that it is pirated. Id. The ’720
`
`patent proposes to solve this problem by restricting access to data on a
`
`portable data carrier based upon payment validation. Id. at 1:46–2:3. The
`
`’720 patent makes clear that the crux of the claimed subject matter is
`
`restricting access to stored data based on supplier-defined access rules and
`
`validation of payment. Id.
`
`Although the specification refers to data piracy on the Internet, claims
`
`13 and 14 are not limited to the Internet. Claim 3, from which claim 13
`
`depends, recites code to “read payment data from the data carrier,” “forward
`
`the payment data to a payment validation system,” “receive payment
`
`validation data from the payment validation system,” “retrieve data from the
`
`data supplier,” “write the retrieved data into the data carrier,” and
`
`responsive to the payment validation data to receive at least one
`access rule . . . write the at least one access rule into the data carrier,
`the at least one access rule specifying at least one condition . . . the at
`least one condition being dependent upon the amount of payment
`associated with the payment data forwarded to the payment validation
`system.
`
`9
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`Claim 14, a method claim, recites similar limitations. The underlying
`
`concept of claims 13 and 14, particularly when viewed in light of the ’720
`
`patent specification, is conditioning and controlling access to content based
`
`upon payment. This is a fundamental economic practice long in existence in
`
`commerce. See Bilski, 561 U.S. at 611.
`
`We are, thus, persuaded, based on the ’720 patent specification and
`
`the claim language, that each of claims 13 and 14 is directed to an abstract
`
`idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of
`
`intermediated settlement at issue in Alice was an abstract idea); Accenture
`
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
`
`(Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to
`
`be “generating tasks [based on] rules . . . to be completed upon the
`
`occurrence of an event”).
`
`2. Inventive Concept
`
`“A claim that recites an abstract idea must include ‘additional
`
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`
`monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo,
`
`132 S. Ct. at 1297). “This requires more than simply stating an abstract idea
`
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`
`the prohibition on patenting an ineligible concept cannot be circumvented by
`
`limiting the use of an ineligible concept to a particular technological
`
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`
`mere recitation of generic computer components performing conventional
`
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`
`computer will include a ‘communications controller’ and ‘data storage unit’
`
`10
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`capable of performing the basic calculation, storage, and transmission
`
`functions required by the method claims.”).
`
`Petitioner argues “‘[t]he claims of the ’720 patent . . . cover nothing
`
`more than the basic financial idea of enabling limited use of paid for and/or
`
`licensed content using ‘conventional’ computer systems and components.’”
`
`Reply 11 (quoting Ex. 1003 ¶ 126). Petitioner persuades us that claims 13
`
`and 14 the ’720 patent do not add an inventive concept sufficient to ensure
`
`that the claims in practice amount to significantly more than claims on the
`
`abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global
`
`Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of
`
`“generating tasks [based on] rules . . . to be completed upon the occurrence
`
`of an event” to be unpatentable even when applied in a computer
`
`environment and within the insurance industry). Specifically, we agree with
`
`and adopt Petitioner’s rationale that the additional elements of claims 13 and
`
`14 are generic features of a computer that do not bring these claims within
`
`§ 101 patent eligibility. Pet. 24–31; Reply 11–21.
`
`a. Technical Elements
`
`Petitioner argues that claims 13 and 14 are unpatentable because these
`
`claims are directed to an abstract idea and any recited technical elements are
`
`repeatedly described by the ’720 patent itself as “both ‘conventional’ and as
`
`being used ‘in a conventional manner.’” Pet. 24 (citing Ex. 1001, 3:64–55,
`
`16:63–65, 21:59–60). Smartflash disagrees, arguing that claims 13 and 14
`
`are patentable because these claims “recite specific ways of using distinct
`
`memories, data types, and use rules that amount to significantly more than
`
`the underlying abstract idea.” PO Resp. 17 (quoting Ex. 2049, 19). We
`
`agree with Petitioner for the following reasons.
`
`11
`
`

`
`CBM2014-00190
`Patent 7,334,720 B2
`
`The ’720 patent specification treats as well-known amd conventional
`
`all potentially technical aspects of claims 13 and 14, including the “data
`
`access terminal” (recited in the preambles of claims 3 and 13), “data
`
`supplier,” “data carrier,” and “payment validation system.” See Reply 13
`
`(citing Ex. 1003 ¶ 24; Ex. 1001, 3:64–65, 16:62–65, 18:24–30). For
`
`example, as Petitioner contends, the specification states the recited “data
`
`access terminal may be a conventional computer,” that the terminal memory
`
`“can comprise any conventional storage device,” and that a “data access
`
`device . . . such as a portable audio/video player . . . comprises a
`
`conventional dedicated computer system including a processor . . . program
`
`memory . . . and timing and control logic . . . coupled by a data and
`
`communications bus.” Id. (quoting Ex. 1001, 4:4–5, 16:46–50, 18:7–11). In
`
`addition, the specification notes that the “data carrier” may be a generic
`
`device such as a “standard smart card.” Ex. 1001, 11:36–39; see also id. at
`
`14:38–42 (“Likewise data stores 136, 138 and 140 may comprise a single
`
`physical data store or may be distributed over a plurality of physical devices
`
`and may even be at physically remote locations from processors 128-134
`
`and coupled to these processors via internet 142.”), Fig. 6. The specification
`
`further indicates that that the “payment validation system” may be “a
`
`signature transporting type e-payment system” or “a third party e-payment
`
`system.” Id. at 7:12–17, 13:46–48 (“an e-payment system according to, for
`
`example, MONDEX, Proton, and/or Visa cash compliant standards”).
`
`Further, the claimed computer code in claim 13 and the method of claim 14
`
`perform generic computer functions, such as reading, forwarding, receiving,
`
`retrieving and writing. See Pet. 24–30; Reply 14–16. The recitation of these
`
`generic computer functions is insufficient to confer specificity. See Content
`
`12
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`

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`Patent 7,334,720 B2
`
`Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l Assoc., 776
`
`F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data collection,
`
`recognition, and storage is undisputedly well-known. Indeed, humans have
`
`always performed these functions.”).
`
`Moreover, we are not persuaded that claims 13 and 14 “recite specific
`
`ways of using distinct memories, data types, and use rules that amount to
`
`significantly more than” conditioning and controlling access to content
`
`based on payment. See PO Resp. 20. Claims 13 and 14 do not recite any
`
`particular or “distinct memories.” To the extent Smartflash contends that the
`
`claimed “data carrier” is a “distinct memory,” as noted above, the
`
`specification makes clear that the “data carrier” may be a generic device
`
`such as a “standard smart card.” See Content Extraction, 776 F.3d at 1347
`
`(“The concept of data collection, recognition, and storage is undisputedly
`
`well-known. Indeed, humans have always performed these functions.”).
`
`The recitation of generic memory, being used to store data in the
`
`conventional manner, is insufficient to confer the specificity required to
`
`elevate the nature of the claim into a patent-eligible application.
`
`Claims 13 and 14 also recite several generic and conventional data
`
`types including “data,” “retrieved data,” “code,” “payment data,” “payment
`
`validation data,” and “access rule.” We are not persuaded that the recitation
`
`of these data types, by itself, amounts to significantly more than the
`
`underlying abstract idea. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct.
`
`at 1294) (“We have described step two of this analysis as a search for an
`
`‘inventive concept’—i.e., an element or combination of elements that is
`
`‘sufficient to ensure that the patent in practice amounts to significantly more
`
`than a patent upon the [ineligible concept] itself.’”) (brackets in original).
`
`13
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`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`Smartflash does not point to any inventive concept in the ’720 patent related
`
`to the way the recited data types are constructed or used. In fact, the ’720
`
`patent simply recites these data types with no description of the underlying
`
`implementation or programming that results in these data constructs.
`
`In addition, because the recited elements can be implemented on a
`
`general purpose computer, claims 13 and 14 do not cover a “particular
`
`machine.” Pet. 33–35; see Bilski, 561 U.S. at 604–05 (stating that machine-
`
`or-transformation test remains “a useful and important clue” for determining
`
`whether an invention is patent eligible). And claims 13 and 14 do not
`
`transform an article into a different state or thing. Pet. 36–37.
`
`Thus, we determine the potentially technical elements of claims 13
`
`and 14 are nothing more than “generic computer implementations” and
`
`perform functions that are “purely conventional.” Alice, 134 S. Ct. at 2358–
`
`59; Mayo, 132 S. Ct. at 1294.
`
`b. DDR Holdings
`
`Relying on the Federal Circuit’s decision in DDR Holdings,
`
`Smartflash asserts that claims 13 and 14 are directed to statutory subject
`
`matter because the claims are “rooted in computer technology in order to
`
`overcome a problem specifically arising in the realm of computer networks.”
`
`PO Resp. 13 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
`
`1257 (Fed. Cir. 2014)). Smartflash contends that claims 13 and 14 are
`
`“directed to particular devices that can download and store digital content
`
`into a data carrier” and “[b]y using a system that combines on the data
`
`carrier both the digital content and payment data that can be forwarded to a
`
`payment validation system, and by responding to payment validation data
`
`when obtaining digital content, the claimed data access terminals enable
`
`14
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`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`digital content to be obtained effectively and legitimately.” Id. at 12–13.
`
`Smartflash further argues that because each of claims 13 and 14 “utilizes at
`
`least one access rule, also written to the data carrier,” “access control to the
`
`digital content can be enforced prior to access to the digital content and
`
`allowing subsequent use (e.g., playback) of the digital content to be portable
`
`and disconnected.” Id. at 13.
`
`Petitioner responds that claims 13 and 14 are distinguishable from the
`
`claims in DDR Holdings. Reply 18–21. The DDR Holdings patent is
`
`directed at retaining website visitors when clicking on an advertisement
`
`hyperlink within a host website. 773 F.3d at 1257. Conventionally, clicking
`
`on an advertisement hyperlink would transport a visitor from the host’s
`
`website to a third party website. Id. The Federal Circuit distinguished this
`
`Internet-centric problem over “the ‘brick and mortar’ context” because
`
`“[t]here is . . . no possibility that by walking up to [a kiosk in a warehouse
`
`store], the customer will be suddenly and completely transported outside the
`
`warehouse store and relocated to a separate physical venue associated with
`
`the third party.” Id. at 1258. The Federal Circuit further determined that the
`
`DDR Holdings claims specify “how interactions with the Internet are
`
`manipulated to yield a desired result—a result that overrides the routine and
`
`conventional sequence of events ordinarily triggered by the click of a
`
`hyperlink.” Id. The unconventional result in DDR Holdings is the website
`
`visitor is retained on the host website, but is still is able to purchase a
`
`product from a third-party merchant. Id. at 1257–58. The limitation referred
`
`to by the Federal Circuit in DDR Holdings recites “using the data retrieved,
`
`automatically generate and transmit to the web browser a second web page
`
`that displays: (A) information associated with the commerce object
`
`15
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`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`associated with the link that has been activated, and (B) the plurality of
`
`visually perceptible elements visually corresponding to the source page.” Id.
`
`at 1250. Importantly, the Federal Circuit identified this limitation as
`
`differentiating the DDR Holdings claims from those held to be unpatentable
`
`in Ultramercial, which “broadly and generically claim ‘use of the Internet’
`
`to perform an abstract business practice (with insignificant added activity).”
`
`Id. at 1258.
`
`We agree with Petitioner that claims 13 and 14 are distinguishable
`
`from the claims at issue in DDR Holdings. As an initial matter, we are not
`
`persuaded by Smartflash’s argument that claims 13 and 14 are “rooted in
`
`computer technology in order to overcome a problem specifically arising in
`
`the realm of computer networks—that of digital data piracy” and
`
`“‘address . . . a challenge particular to the Internet.’” PO Resp. 13 (quoting
`
`DDR Holdings, 773 F.3d at 1257). Data piracy exists in contexts other than
`
`the Internet. See Reply 17–18 (identifying other contexts in which data
`
`piracy is a problem). For example, data piracy was a problem with compact
`
`discs. See Ex. 1001, 5:4–7 (“[W]here the data carrier stores . . . music, the
`
`purchase outright option may be equivalent to the purchase of a compact
`
`disc (CD), preferably with some form of content copy protection such as
`
`digital watermarking.”). Further, whatever the problem, the solutions
`
`provided by claims 13 and 14 are not rooted in specific computer
`
`technology, but are based on conditioning and controlling access to content
`
`only when payment is validated. See Reply 15–16.
`
`Even accepting Smartflash’s assertion that claims 13 and 14 address
`
`data piracy on the Internet (PO Resp. 13), we are not persuaded that the
`
`claims do so by achieving a result that overrides the routine and
`
`16
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`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`conventional use of the recited devices and functions. In fact, the
`
`differences between claims 13 and 14 and the claims at issue in DDR
`
`Holdings are made clear by Smartflash in its table mapping claim 13 of the
`
`’720 patent to claim 19 of the patent at issue in DDR Holdings. PO Resp.
`
`14–17. For example, Smartflash compares the limitation highlighted by the
`
`Federal Circuit in DDR Holdings with 2 limitations recited by claim 13:
`
`“code responsive to the payment validation data . . . to write the retrieved
`
`data in the data carrier,” and “code responsive to the payment validation data
`
`to receive at least one access rule from the data supplier and to write the at
`
`least one access rule intothe data carrier, the at least one access rule
`
`specifying at least one condition for accessing the retrieved data written into
`
`the data carrier, the at least one condition being dependent upon the amount
`
`of payment associated with the payment data forwarded to the payment
`
`validations system.” PO Resp. 16–17. Smartflash, however, fails to identify
`
`how these limitations of claim 13, like the corresponding DDR Holdings
`
`limitation, do not “adher[e] to the routine, conventional functioning” of the
`
`technology being used. PO Resp. 13–24; DDR Holdings, 773 F.3d at 1258.
`
`Instead, unlike the claims in DDR Holdings, these limitations, like all the
`
`other limitations of claim 13, are “specified at a high level of generality,”
`
`which the Federal Circuit has found to be “insufficient to supply an
`
`‘inventive concept.’” Ultramercial, 772 F.3d at 716. The limitations of the
`
`challenged claims merely rely on conventional devices and computer
`
`processes operating in their “normal, expected manner.” OIP Techs., 788
`
`F.3d at 1363 (citing DDR Holdings, 773 F.3d at 1258–59).
`
`The claims at issue in Ultramercial, like claims 13 and 14, were also
`
`directed to a method for distributing media products. Instead of
`
`17
`
`

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`CBM2014-00190
`Patent 7,334,720 B2
`
`conditioning and controlling access to data based on payment, as in claims
`
`13 and 14, the Ultramercial claims condition and control access based on
`
`viewing an advertisement. 772 F.3d at 712. Similar to the claims in
`
`Ultramercial, the majority of limitations in claims 13 and 14 comprise this
`
`abstract concept of conditioning and controlling access to data. See id. at
`
`715. Adding routine additional steps such as communicating with the data
`
`supplier, reading payment data, forwarding payment data, receiving payment
`
`validation data, retrieving data from the data supplier, and writing data to a
`
`data carrier does not transform an otherwise abstract idea into patent-eligible
`
`subject matter. See id. at 716 (“Adding routine additional steps such as
`
`updating an activity log, requiring a request from the consumer to view the
`
`ad, restrictions on public access, and use of the Internet does not transform
`
`an otherwise abstract idea into patent-eligible subject matter.”).
`
`We are, therefore, persuaded that claims 13 and 14 are closer to the
`
`claims at issue in Ultramercial than to those at issue in DDR Holdings.
`
`c. Smartflash’s Alleged Inventive Concept
`
`
`
`To the extent Smartflash argues claims 13 and 14 include an
`
`“inventive concept” because of the specific combination of elements in these
`
`claims, we disagree. Specifically, Smartflash refers to the following
`
`disclosure from the ’720 patent specification: “[b]y combining digital rights
`
`management with content data storage using a single

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