Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 43
`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 CBM2015-000291
`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 15 of U.S. Patent No. 7,334,720 B2 in CBM2015-
`00125 was consolidated with this proceeding. Paper 28, 9–11.
`
`
`Tel: 571-272-7822
`
`Paper 43
`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 CBM2015-000291
`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 15 of U.S. Patent No. 7,334,720 B2 in CBM2015-
`00125 was consolidated with this proceeding. Paper 28, 9–11.
`
`
`
`CBM2015-00029
`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 3 and 13–15 of U.S. Patent
`
`No. 7,334,720 B2 (Ex. 1301, “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 3 and 15 are directed to
`
`patent ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 19.
`
`Subsequent to institution, Smartflash filed a Patent Owner Response
`
`(Paper 23, “PO Resp.”), and Apple filed a Reply (Paper 26, “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 15 be consolidated
`with this case and that its challenge to claim 1 be consolidated with
`CBM2015-00028. CBM2015-00028, filed by Apple, involves claims 1 and
`2 of the ’720 patent. A Final Written Decision in CBM2015-00028 is issued
`concurrently with this Decision.
`
`2
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`Google’s challenge to claim 15 of the ’720 patent with this proceeding.4
`
`Paper 28; 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 41, “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 3 and 15 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. 1301, 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 CBM2015-00029, and refer collectively to Apple and Google as
`“Petitioner.”
`
`3
`
`
`
`CBM2015-00029
`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
`
`We instituted a review of Petitioner’s challenges to claims 3 and 15 of
`
`the ’720 patent. Claim 3 is independent and claim 15 depends from claim
`
`145. Claims 3, 14, and 15 are repoduced below:
`
`A data access terminal for retrieving data from a data
`3.
`supplier 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:
`
`
`5 We instituted a review of claims 13 and 14 of the ’720 patent under § 101
`in CBM2014-00190. Samsung Electronics. v. Smartflash LLC, Case
`CBM2015-00190 (Paper 9, 18). A Final Written Decision in CBM2014-
`00190 is issued concurrently with this Decision.
`
`4
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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 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. 1301, 26:41–67.
`
`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.
`
`15. A method of providing data from a data supplier
`according to claim 14 further comprising:
`
`5
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`recieving payment validation data from the payment
`
`validation system; and
`
`transmitting at least a portion of the payment validation
`
`data to the data supplier.
`
`Id. at 28:21–26.
`
`A.
`
`Claim Construction
`
`ANALYSIS
`
`Consistent with the statute and the legislative history of the AIA,6 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 3 and 15 as directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101. Pet. 19–30. Petitioner submits a
`
`
`6 Leahy-Smith America Invents Act, Pub. L. No. 11229, 125 Stat. 284
`(2011) (“AIA”).
`
`6
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`declaration from Anthony J. Wechselberger (“Wechselberger Declaration”)7
`
`in support of its petition. Ex. 1319.
`
`According to Petitioner, claims 3 and 15 are directed to an abstract
`
`idea and do not disclose an “inventive concept” that is “significantly more”
`
`than the abstract idea. Pet. 19–30. Smartflash argues that claims 3 and 15
`
`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. 17 (citation
`
`omitted). Specifically, Smartflash asserts that “the claims are directed to a
`
`particular device and method that can download and store digital content
`
`into a data carrier.” Id.
`
`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 3 recites a “machine” (“a data access terminal”), and
`
`claim 15 recites a “process” (“[a] method”), under § 101. Section 101,
`
`however, “contains an important implicit exception [to subject matter
`
`eligibility]: Laws of nature, natural phenomena, and abstract ideas are not
`
`
`7 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.
`
`7
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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
`
`(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
`
`8
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`“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 3 and 15 are directed to the abstract idea
`
`of “paying for and/or controlling access to content.” Pet. 19; see id. at 20–
`
`23. Although Smartflash does not concede, in its Patent Owner Response,
`
`that claims 3 and 15 are directed to an abstract idea, it does not persuasively
`
`explain how the challenged claims escape being classified as abstract. PO
`
`Resp. 15–22 (Patent Owner Response argues that claims are statutory under
`
`only the second step of Mayo and Alice); see also Paper 41 (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 3 and 15 are drawn to an abstract idea.
`
`Specifically, claims 3 and 15 are directed to performing the fundamental
`
`economic practice of conditioning and controlling access to content based on
`
`payment. Claim 3 recites “code . . . to receive at least one access rule . . . 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.” Independent claim 14, not at
`
`issue here, recites a similar limitation. Claim 15, depending from claim 14,
`
`further recites “receiving payment validation data . . . and transmitting at
`
`least a portion of the payment validation data to the data supplier.”
`
`9
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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. 1301, 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
`
`3 and 15 are not limited to the Internet. Claim 3 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,” “responsive to the payment validation data to retrieve
`
`data from the data supplier and to 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.
`
`Claim 14, from which claim 15 depends, recites “reading payment data from
`
`the data carrier,” “forwarding the payment data to a payment validation
`
`10
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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,” “writing the at at least one access rule into the data carrier,” and
`
`“writing the at least one access rule into the data carrier . . . specifying at
`
`least one condition for accessing the retrieved data . . . the at least one
`
`condition being dependent upon the amount of payment associated with the
`
`payment data.” As noted above, claim 15 further adds “receiving . . . and
`
`transmitting at least a portion of the payment validation data to the data
`
`supplier.” The underlying concept of claims 3 and 15, 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 3 and 15 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
`
`11
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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
`
`within § 101 patent eligibility. Pet. 23–28. 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 3 and 15 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 3 and 15 are either field of use limitations or
`
`12
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`generic features of a computer that do not bring these claims within § 101
`
`patent eligibility. Pet. 23–28; 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. 23 (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 (citing Ex. 2049, 19:1–4). We agree with Petitioner for the
`
`following reasons.
`
`The ’720 patent specification treats as well-known and conventional
`
`all potentially technical aspects of claims 3 and 15, including the recited
`
`“data access terminal” (preamble of cliam 3), “data supplier,” “data carrier,”
`
`and “payment validation system.” See Reply 11. For example, 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.” Ex. 1301, 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.” Id. at 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
`
`13
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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 3 performs generic computer
`
`functions, such as reading, forwarding, receiving, retrieving and writing.
`
`See Pet. 25–28; Reply 11. The recitation of these generic computer
`
`functions is insufficient to confer specificity. See Content 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 3 and 15 “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. Claims 3 and 15 do not require any
`
`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
`
`14
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
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`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
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`patent-eligible application.
`
`Claims 3 and 15 also require several generic and conventional data
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`types, including “data,” “retrieved data,” “code,” “payment data,” “payment
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`validation data,” and “access rule.” We are not persuaded that the recitation
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`of these data types, by itself, amounts to significantly more than the
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`underlying abstract idea. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct.
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`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
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`than a patent upon the [ineligible concept] itself.’”) (brackets in original).
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`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
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`implementation or programming that results in these data constructs.
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`In addition, because the recited elements can be implemented on a
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`general purpose computer, claims 3 and 15 do not cover a “particular
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`machine.” Pet. 30; see Bilski, 561 U.S. at 604–05 (stating that machine-or-
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`transformation test remains “a useful and important clue” for determining
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`whether an invention is patent eligible). And claims 3 and 15 do not
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`transform an article into a different state or thing. Pet. 30.
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`Thus, we determine the potentially technical elements of claims 3 and
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`15 are nothing more than “generic computer implementations” and perform
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`functions that are “purely conventional.” Alice, 134 S. Ct. at 2358–59;
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`Mayo, 132 S. Ct. at 1294.
`
`15
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`CBM2015-00029
`Patent 7,334,720 B2
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`b. Challenged claims are not comparable to DDR claim
`DDR Holdings
`
`Relying on the Federal Circuit’s decision in DDR Holdings,
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`Smartflash asserts that claims 3 and 15 are directed to statutory subject
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`matter because the claims are “‘rooted in computer technology in order to
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`overcome a problem specifically arising in the realm of computer
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`networks.’” PO Resp. 17 (quoting DDR Holdings, LLC v. Hotels.com, L.P.,
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`773 F.3d 1245, 1257 (Fed. Cir. 2014)). Specifically, Smartflash avers that
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`the claims are directed to “a particular device and method that can download
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`and store digital content into a data carrier.” Id. at 17.
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`Petitioner responds that claims 3 and 15 are distinguishable from the
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`claims in DDR Holdings. Reply 7–14. The DDR Holdings patent is directed
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`at retaining website visitors when clicking on an advertisement hyperlink
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`within a host website. 773 F.3d at 1257. Conventionally, clicking on an
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`advertisement hyperlink would transport a visitor from the host’s website to
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`a third party website. Id. The Federal Circuit distinguished this Internet-
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`centric problem over “the ‘brick and mortar’ context” because “[t]here is . . .
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`no possibility that by walking up to [a kiosk in a warehouse store], the
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`customer will be suddenly and completely transported outside the warehouse
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`store and relocated to a separate physical venue associated with the third
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`party.” Id. at 1258. The Federal Circuit further determined that the DDR
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`Holdings claims specify “how interactions with the Internet are manipulated
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`to yield a desired result—a result that overrides the routine and conventional
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`sequence of events ordinarily triggered by the click of a hyperlink.” Id. The
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`unconventional result in DDR Holdings is the website visitor is retained on
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`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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`16
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`CBM2015-00029
`Patent 7,334,720 B2
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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 3 and 15 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 3 and 15 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” and
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`“‘address . . . a challenge particular to the Internet.’” PO Resp. 17 (quoting
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`DDR Holdings, 773 F.3d at 1257). The challenged claims are not limited to
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`the Internet or computer networks. Moreover, data piracy exists in contexts
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`other than the Internet. See Reply 10 (identifying other contexts in which
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`data piracy is a problem). For example, data piracy was a problem with
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`compact discs. See Ex. 1301, 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. 1319 ¶ 92); Ex. 1306, 1:67–2:9 (“It is an
`
`17
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`
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`CBM2015-00029
`Patent 7,334,720 B2
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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. 1319 ¶¶ 33, 91–92; Ex. 1308, 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 10–14. For example, claim 3
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`recites “code” to “read payment data,” “receive payment validation data,”
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`“write the retrieved data into the data carrier,” and “receive at least one
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`access rule . . . write the at least one access rule.” Similiarly, claim 15 of the
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`’720 patent requires “reading payment data,” “forwarding the payment
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`data,” “retrieving data from the data supplier,” “writing the retrieved data
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`into the data carrier,” “receiving at least one access rule from the data
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`supplier,” and “writing the at least one access rule into the data carrier.”
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`These limitations, and the other limitations of claims 3 and 15, 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 f
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