`Tel: 571-272-7822
`
`Paper 44
`Entered: May 26, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`and
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-000281
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`GREGG I. ANDERSON, 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 The challenge to claim 1 of U.S. Patent No. 7,334,720 B2 in CBM2015-
`00125 was consolidated with this proceeding. Paper 29, 9–11.
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`A. Background
`
`INTRODUCTION
`
`Petitioner Apple Inc. (“Apple”) filed a Corrected Petition to institute
`
`covered business method patent review of claims 1 and 2 of U.S. Patent No.
`
`7,334,720 B2 (Ex. 1201, “the ’720 patent”) pursuant to § 18 of the Leahy-
`
`Smith America Invents Act (“AIA”). Paper 5 (“Pet.”). Patent Owner,
`
`Smartflash LLC (“Smartflash”), filed a Preliminary Response. Paper 8
`
`(“Prelim. Resp.”). On May 28, 2015, we instituted a covered business
`
`method patent review (Paper 11, “Institution Decision” or “Inst. Dec.”)
`
`based upon Apple’s assertion that claims 1 and 2 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.”), and Apple filed a Reply (Paper 27, “Reply”).
`
`On May 6, 2015, Google Inc. (“Google”) filed a Petition to institute
`
`covered business method patent review of claims 1 and 15 of the ’720 patent
`
`based on the same grounds. Google Inc. v. Smartflash LLC, Case
`
`CBM2015-00125 (Paper 32, “Google Pet.”). On June 29, 2015, Google filed
`
`a “Motion for Joinder” of its newly filed case with Apple’s previously
`
`instituted cases.3 CBM2015-00125 (Paper 7, “Google Mot.”). On
`
`November 16, 2015, we granted Google’s Petition and consolidated
`
`
`2 We refer to the redacted version of the Petition.
`
`3 Google’s Motion requested that its challenge to claim 1 be consolidated
`with this case and that its challenge to claim 15 be consolidated with
`CBM2015-00029. CBM2015-00029, filed by Apple, involves claims 3 and
`15 of the ’720 patent. A Final Written Decision in CBM2015-00029 is
`issued concurrently with this Decision.
`
`2
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`Google’s challenge to claim 1 of the ’720 patent with this proceeding.4
`
`Paper 29; CBM2015-00125 (Paper 11).
`
`An oral hearing was held on January 6, 2016, and a transcript of the
`
`hearing is included in the record (Paper 42 “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 claims 1 and 2 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. 1201, 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.
`
`
`4 For purposes of this decision, we will cite only to Apple’s Petition and the
`record in CBM2015-00028, and refer collectively to Apple and Google as
`“Petitioner.”
`
`3
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`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
`
`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 1 and 2 of the ’720 patent. Claim 1 is
`
`independent and claim 2 depends from claim 1. Claims 1 and 2 are
`
`repoduced below:
`
`1. A method of controlling access to content data on a data carrier,
`the data carrier comprising non-volatile data memory storing
`content memory and non-volatile parameter memory storing use
`status data and use rules, the method comprising:
`
`receiving a data access request from a user for at least one
`content item of the content data stored in the non-volatile data
`memory;
`
`reading the use status data and use rules from the parameter
`memory that pertain to use of the at least one requested content
`item;
`
`evaluating the use status data using the use rules to determine
`whether access to the at least one requested content item stored
`in the content memory is permitted; and
`
`displaying to the user whether access is permitted for each of
`the at least one requested content item stored in the non-volatile
`data memory.
`
`Id. at 26:17–36.
`
`4
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`2. A method as claimed in claim 1 wherein said parameter
`memory further stores payment data and further comprising
`selecting one of said use rules dependent upon said payment data.
`
`
`Id. at 26:36–39.
`
`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
`
`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 1 and 2 as directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101. Pet. 25–38. Petitioner submits a
`
`
`5 Leahy-Smith America Invents Act, Pub. L. No. 11229, 125 Stat. 284
`(2011) (“AIA”).
`
`5
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`declaration from Anthony J. Wechselberger (“Wechselberger Declaration”)6
`
`in support of its petition. Ex. 1219.
`
`According to Petitioner, claims 1 and 2 are directed to an abstract idea
`
`and do not disclose an “inventive concept” that is “significantly more” than
`
`the abstract idea. Pet. 25–38. Smartflash argues that claims 1 and 2 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. 21 (citation
`
`omitted). Specifically, Smartflash asserts that
`
`[T]he claims are directed to a particular method to combat data
`content piracy on the Internet by providing for legitimate
`acquisition of content data by transmitting requested data content
`to the requester after evaluating use status data using use rules to
`determine whether access to the requested data content is
`permitted.
`
`Id. at 20.
`
`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, claims 1 and 2 recite a “process,” e.g., a “method,” under
`
`
`6 In its Response, Smartflash argues that the Wechselberger Declaration
`should be given little or no weight. PO Resp. 8–15. Because Smartflash has
`filed a Motion to Exclude that includes a request to exclude the
`Wechselberger Declaration in its entirety, or in the alternative, portions of
`the declaration based on essentially the same argument, we address
`Smartflash’s argument as part of our analysis of the motion, discussed
`below.
`
`6
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`§ 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
`
`(“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
`
`7
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`
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`CBM2015-00028
`Patent 7,334,720 B2
`
`(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 1 and 2 are directed to the abstract idea
`
`of “controlling access to content, including based on payment data.” Pet. 25;
`
`see id. at 28–30. Although Smartflash does not concede, in its Patent Owner
`
`Response, that claims 1 and 2 are directed to an abstract idea, it does not
`
`persuasively explain how the challenged claims escape being classified as
`
`abstract. PO Resp. 19–22 (Patent Owner Response argues that claims are
`
`statutory under only the second step of Mayo and Alice); see also Paper 42
`
`(transcript of oral hearing), 6:13–16 (Petitioner stating that “Patent Owner
`
`has presented no argument whatoever to contest that its claims are directed
`
`to abstract ideas under the first prong of Mayo and Alice.”) id. at 6:17–18
`
`(Petitioner also stating “It [] also never disputed the articulation of those
`
`abstract ideas”).
`
`We are persuaded that claims 1 and 2 are drawn to an abstract idea.
`
`Specifically, claims 1 and 2 are directed to performing the fundamental
`
`economic practice of conditioning and controlling access to content, based
`
`on, for example, payment. Claim 1 recites “evaluating the use status data
`
`using the use rules to determine whether access to the at least one requested
`
`content item stored in the content memory is permitted.” Claim 2 recites
`
`“selecting one of said use rules dependent upon said payment data.”
`
`Furthermore, as discussed above, the ’720 patent discusses addressing
`
`8
`
`
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`CBM2015-00028
`Patent 7,334,720 B2
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`recording industry concerns of data pirates offering unauthorized access to
`
`widely available compressed audio recordings. Ex. 1201, 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
`
`1 and 2 are not limited to the Internet. Claim 1, from which claim 2
`
`depends, recites “receiving a data access request from a user for at least one
`
`content item,” “reading the use status data and use rules [ ] that pertain to
`
`use of the at least one requested content item,” “evaluating the use status
`
`data using the use rules to determine whether access to the at least one
`
`requested content item [ ] is permitted,” and “displaying to the user whether
`
`access is permitted for each of the at least one requested content item.” As
`
`noted above, claim 2 further adds “selecting one of said use rules dependent
`
`upon said payment data.” The underlying concept of claims 1 and 2,
`
`particularly when viewed in light of the ’720 patent specification, is
`
`conditioning and controlling access to content, including based upon
`
`payment. This is a fundamental economic practice long in existence in
`
`commerce. See Bilski, 561 U.S. at 611.
`
`9
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`
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`CBM2015-00028
`Patent 7,334,720 B2
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`We are, thus, persuaded, based on the ’720 patent specification and
`
`the claim language, that each of claims 1 and 2 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’
`
`capable of performing the basic calculation, storage, and transmission
`
`functions required by the method claims.”).
`
`Petitioner argues that the challenged claims do not disclose an
`
`“inventive concept” because any additional features recited in the challenge
`
`claims are either field of use limitaitons or generic computer
`
`implementations, which Petitioner argues are insufficient to bring the claims
`
`10
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`
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`CBM2015-00028
`Patent 7,334,720 B2
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`within § 101 patent eligibility. Pet. 29–30. Specifically, Petitioner contends
`
`that the challenged claims “recite no more than generic computer elements
`
`and functions that were well-known, routine, and conventional to a POSITA
`
`at the time of filing.” Reply 6 (citations omitted); see id. at 13–14.
`
`Petitioner persuades us that claims 1 and 2 of 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 1 and 2 are either field of use limiations or
`
`generic features of a computer that do not bring these claims within § 101
`
`patent eligibility. Pet. 29–35; Reply 4–6.
`
`a. Every claimed hardware component and function was
`known
`
`Petitioner argues that the challenged claims are unpatentable because
`
`they are “directed only to an abstract idea with nothing more than ‘well-
`
`understood, routine, conventional, activity.’” Pet. 30 (citations omitted).
`
`Smartflash argues that the challenged claims are patentable because they
`
`“recite specific ways of using distinct memories, data types, and use rules
`
`that amount[s] to significantly more than the underlying abstract idea.” PO
`
`Resp. 21–22 (citing Ex. 2049, 19:1–4). We agree with Petitioner for the
`
`following reasons.
`
`11
`
`
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`CBM2015-00028
`Patent 7,334,720 B2
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`The ’720 patent specification treats as well-known and conventional
`
`all potentially technical aspects of claims 1 and 2, including the “data
`
`carrier,” “non-volatile data memory,” and “non-volatile parameter memory.”
`
`See Reply 11. For example, the specification states the recited “data store”
`
`may be a generic device such as a “standard smart card.” Ex. 1201, 11:36–
`
`39; see also id. at 11:28–30, 14:38–42 (“[l]ikewise 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. In addition, the ’720 patent specification describes the recited non-
`
`volatile “data memory” and “parameter memory” as conventional. See e.g.,
`
`Ex. 1201, 6:17–19 (stating that [t]he data memory for storing content data
`
`may be optic, magnetic or semiconductor memory, but preferably comprises
`
`Flash memory.”), 3:64–65, 16:62–65, 18:26–30 (describing components as
`
`“conventional”), Fig. 9. Furthermore, to the extent the challenged claims
`
`require a computer, the claimed method steps perform generic computer
`
`functions, such as receiving, reading, evaluating, and displaying. See Pet. 3–
`
`4. The recitation of these generic computer functions is insufficient to
`
`confer specificity. See Content Extraction and Transmission LLC v. Wells
`
`Fargo Bank, Nat. Ass’n, 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 1 and 2 “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. 21–22. Claims 1 and 2 do not recite any
`
`12
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`CBM2015-00028
`Patent 7,334,720 B2
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`particular or “distinct memories.” As noted above, the ’720 patent
`
`specification indicates that the required memories may be conventional types
`
`of memory. 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 1 and 2 also recite several generic and conventional data types,
`
`including “content data,” “data access request,” “use status data,” “use
`
`rules,” and “payment data.” 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). 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 1 and 2 do not cover a “particular
`
`13
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`CBM2015-00028
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`machine.” Pet. 37–38; 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 1 and 2 do not
`
`transform an article into a different state or thing. Pet. 37–38.
`
`Thus, we determine the potentially technical elements of claims 1 and
`
`2 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. Challenged claims are not comparable to DDR claim
`DDR Holdings
`
`Relying on the Federal Circuit’s decision in DDR Holdings,
`
`Smartflash asserts that claims 1 and 2 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. 5, 20 (quoting DDR Holdings, LLC v. Hotels.com,
`
`L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). Specifically, Smartflash avers
`
`that the claims are directed to “a particular method to combat data content
`
`piracy on the Internet by providing for legitimate acquisition of content data
`
`by transmitting requested data content to the requester after evaluating use
`
`status data using use rules to determine whether access to the requested data
`
`content is permitted.” Id. at 20.
`
`Petitioner responds that claims 1 and 2 are distinguishable from the
`
`claims in DDR Holdings. Reply 7–14. 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
`
`14
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`CBM2015-00028
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`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
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`merchant. Id. at 1257–58. The limitation referred to by the Federal Circuit
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`in DDR Holdings recites “using the data retrieved, automatically generate
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`and transmit to the web browser a second web page that displays:
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`(A) information associated with the commerce object associated with the
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`link that has been activated, and (B) the plurality of visually perceptible
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`elements visually corresponding to the source page.” Id. at 1250.
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`Importantly, the Federal Circuit identified this limitation as differentiating
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`the DDR Holdings claims from those held to be unpatentable in
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`Ultramercial, which “broadly and generically claim ‘use of the Internet’ to
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`perform an abstract business practice (with insignificant added activity).”
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`Id. at 1258.
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`We agree with Petitioner that claims 1 and 2 are distinguishable from
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`the claims at issue in DDR Holdings. See Reply 7–14. As an initial matter,
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`we are not persuaded by Smartflash’s argument that claims 1 and 2 are
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`“‘rooted in computer technology in order to overcome a problem specifically
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`arising in the realm of computer networks’ — that of digital data piracy’”
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`and “‘address . . . a challenge particular to the Internet.’” PO Resp. 21
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`(quoting DDR Holdings, 773 F.3d at 1257). The challenged claims are not
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`limited to the Internet or computer networks. Moreover, data piracy exists
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`in contexts other than the Internet. See Reply 10 (identifying other contexts
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`in which data piracy is a problem). For example, data piracy was a problem
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`with compact discs. See Ex. 1201, 5:4–7 (“[W]here the data carrier stores . .
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`. music, the purchase outright option may be equivalent to the purchase of a
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`compact disc (CD), preferably with some form of content copy protection
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`such as digital watermarking.”). As another example, to prevent piracy of
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`software data, time-limited promotional trials were used to prevent software
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`data piracy. Reply 10 (citing Ex. 1219 ¶ 85); Ex. 1206, 1:67–2:9 (“It is an
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`object of this invention to provide a means for selling and distributing
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`protected software using standard telephone lines for transferring the
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`software from the seller to the purchaser. Another object of this invention is
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`to permit the purchaser to rent the protected software for a period of time
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`after which it will self destruct. Another object of this invention is to permit
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`the purchaser to rent the protected software for a specified number of runs . .
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`. .”). Furthermore, whatever the problem, the solution provided by the
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`challenged claim is not rooted in specific computer technology, but is based
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`on conditioning access to content based on payment or rules. See Reply 9
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`(citing Ex. 1219 ¶¶ 33, 84–85; Ex. 1208, Abstract, 4:27–35).
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`Even accepting Smartflash’s assertion that the challenged claims
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`address data piracy on the Internet, we are not persuaded that they do so by
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`achieving a result that overrides the routine and conventional use of the
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`recited devices and functions. See Reply 11–14. For example, claim 1 of
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`the ’720 patent requires “receiving a data access request from a user for at
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`least one content item,” “reading the use status data and use rules [ ] that
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`pertain to use of the at least one requested content item,” “evaluating the use
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`status data using the use rules to determine whether access to the at least one
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`requested content item [ ] is permitted,” and “displaying to the user whether
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`access is permitted for each of the at least one requested content item.”
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`These limitations, and the other limitations of claims 1 and 2, do not yield a
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`result that overrides the routine and conventional manner in which this
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`technology operates. Instead, these limitations, like all the other limitations
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`of the challenged claims, are “specified at a high level of generality,” which
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`the Federal Circuit has found to be “insufficient to supply an ‘inventive
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`concept.’” Ultramercial, 772 F.3d at 716. They merely rely on
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`conventional devices and computer processes operating in their “normal,
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`expected manner.” OIP Techs., 788 F.3d at 1363 (citing DDR, 773 F.3d at
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`1258–59).
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`The claims at issue in Ultramercial, like claims 1 and 2, were also
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`directed to a method for distributing media products. Instead of
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`conditioning and controlling access to data, based on, for example, payment,
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`as in claims 1 and 2, the Ultramercial claims condition and control access
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`based on viewing an advertisement. 772 F.3d at 712. Similar to the claims
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`in Ultramercial, the majority of limitations in claims 1 and 2 comprise this
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`abstract concept of conditioning and controlling access to data. See id. at
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`715. Adding routine additional steps such as “reading the use status data nd
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`use rules,” “evaluating the use status data using the use rules to determine
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`whether acces” to requested content is permitted, and “displaying to the user
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`whether access is permitted” does not transform an otherwise abstract idea
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`into patent-eligible subject matter. See id. at 716 (“Adding routine
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`additional steps such as updating an activity log, requiring a request from the
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`consumer to view the ad, restrictions on public access, and use of the
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`Internet does not transform an otherwise abstract idea into patent-eligible
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`subject matter.”).
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`We are, therefore, persuaded that claims 1 and 2 are closer to the
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`claims at issue in Ultramercial than to those at issue in DDR Holdings.
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`c. Smartflash’s Alleged Inventive Concept
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`
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`To the extent Smartflash argues claims 1 and 2 include an “inventive
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`concept” because of the specific combination of elements in these claims,
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`we disagree. Specifically, Smartflash refers to the following disclosure from
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`the ’720 patent specification: “[b]y combining digital rights management
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`with content data storage using a single carrier, the stored content data
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`becomes mobile and can be accessed anywhere while retaining control over
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`the stored data for the data content provider or data copyright owner.” PO
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`Resp. 17 (quoting Ex. 1201, 5:25–29). Referring to this disclosure,
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`Smartflash argues that “[b]y using a system that combines on the data carrier
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`both the digital content and the at least one access rule, access control to the
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`digital content can be enforced prior to access to the digital content.” Id. at
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`17. Thus, Smartflash concludes that:
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`[b]y comparison, unlike a system that uses at least one access
`rule as claimed, when a DVD was physically rented for a rental
`period, the renter could continue to play the DVD, even if the
`renter kept the DVD past the rental period because the use rules
`were not associated with the DVD. Similarly, there was no way
`to track a use of the DVD such that