Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 51
`Entered: March 29, 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 CBM2014-001941
`Patent 8,118,221 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`1 CBM2015-00117 (Patent 8,118,221 B2) was consolidated with this
`proceeding.
`
`
`Tel: 571-272-7822
`
`Paper 51
`Entered: March 29, 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 CBM2014-001941
`Patent 8,118,221 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`1 CBM2015-00117 (Patent 8,118,221 B2) was consolidated with this
`proceeding.
`
`
`
`CBM2014-00194
`Patent 8,118,221 B2
`
`INTRODUCTION
`
`A. Background
`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 2, 11, and 32 of U.S. Patent No. 8,118,221 B2 (Ex. 1001, “the ’221
`patent”) pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).
`Paper 4 (“Pet.”). On March 30, 2015, we instituted a covered business
`method patent review (Paper 9, “Institution Decision” or “Inst. Dec.”) based
`upon Petitioner’s assertion that claims 2, 11, and 32 are directed to patent
`ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 20.
`On April 30, 2015, Apple Inc. filed a Petition to institute covered
`business method patent review of the same claims of the ’221 patent based
`on the same grounds. Apple Inc. v. Smartflash LLC, Case CBM2015-00117
`(Paper 2, “Apple Pet.”). Apple simultaneously filed a “Motion for Joinder”
`of its newly filed case with Samsung’s previously instituted case.
`CBM2015-00117 (Paper 3, “Apple Mot.”). On August 8, 2015, we granted
`Apple’s Petition and consolidated the two proceedings.3 Paper 32; Apple
`Inc. v. Smartflash LLC, Case CBM2015-00117, slip. op. at 6–7 (PTAB Aug.
`8, 2015) (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
`
`
`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 For purposes of this decision, we will cite only to Samsung’s Petition.
`
`2
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`CBM2014-00194
`Patent 8,118,221 B2
`
`Petitioner has shown by a preponderance of the evidence that claim 32 of the
`’221 patent is directed to patent ineligible subject matter under 35 U.S.C.
`§ 101.
`B. Related Matters and Estoppel
`In a previous covered business method patent review, CBM2014-
`00102, we issued a Final Written Decision determining claims 1, 2, and 11–
`14 unpatentable under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC, Case
`CBM2014-00102, (PTAB Sept. 25, 2015) (Paper 52). On March 18, 2016,
`however, Patent Owner filed an authorized motion to terminate this
`proceeding as to claims 2 and 11 stating that “[o]n March 4, 2016, pursuant
`to Fed. R. App. P. 42(b), the United States Court of Appeals for the Federal
`Circuit dismissed [Patent Owner’s] appeal of [the final written decision in
`CBM2014-00102 determining] that claims 2 and 11 of the ’221 Patent are
`unpatentable.” Paper 50, 2. 4
`We are persuaded that the particular facts of this proceeding now
`counsel termination of our consideration of claims 2 and 11. 37 C.F.R.
`§ 42.72. Claims 2 and 11 of the ’221 patent have been finally cancelled and
`any decision we might reach in this proceeding regarding the patentability of
`these claims would be moot and purely advisory. We do not see how the
`just, speedy, and inexpensive resolution of every proceeding (37 C.F.R.
`§ 42.1(b)) would be secured by rendering a final written decision regarding
`these claims. Accordingly, we terminate this review as to claims 2 and 11
`and consider below only the remaining challenged claim—claim 32.
`
`
`4 Fed. R. App. P. 42 provides for dismissal of an appeal at the request of the
`parties or on motion by the appellant.
`
`3
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`CBM2014-00194
`Patent 8,118,221 B2
`
`C. The ’221 Patent
`The ’221 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored” and the “corresponding methods and computer programs.” Ex. 1001
`1:21–25. Owners of proprietary data, especially audio recordings, have an
`urgent need to address the prevalence of “data pirates” who make
`proprietary data available over the Internet without authorization. Id. at
`1:29–56. The ’221 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:59–2:11. This combination allows data owners to make their data
`available over the Internet with less fear of data piracy. Id. at 2:11–15.
`As described, the portable data storage device is connected to a
`terminal for Internet access. Id. at 1:59–67. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from the data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 2:1–4. The
`’221 patent makes clear that the actual implementation of these components
`is not critical and may be implemented in many ways. See, e.g., id. at
`25:41–44 (“The skilled person will understand that many variants to the
`system are possible and the invention is not limited to the described
`embodiments . . . .”).
`D. Challenged Claim
`Petitioner challenges claim 32 of the ’221 patent. Claim 32 is
`independent and recites the following:
`
`32. A data access terminal for retrieving data from a data
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`
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`CBM2014-00194
`Patent 8,118,221 B2
`
`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;
`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;
`and
`
`code to retrieve from the data supplier and output to a
`user-stored data identifier data and associated value data and
`use rule data for a data item available from the data supplier.
`Id. at 28:23–50.
`
`ANALYSIS
`
`A. Claim Construction
`In a covered business method patent review, claim terms are given
`their broadest reasonable interpretation in light of the specification in which
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`
`5
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`CBM2014-00194
`Patent 8,118,221 B2
`
`of the ’221 patent according to their ordinary and customary meaning in the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this Decision, we
`need not construe expressly any claim term.
`B. Statutory Subject Matter
`Petitioner challenges claim 32 as directed to patent-ineligible subject
`matter under 35 U.S.C. § 101. Pet. 21–34. According to Petitioner, claim
`32 is 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. in support of its
`Petition.5 Ex. 1003. Patent Owner argues that the subject matter claimed by
`claim 32 is statutory because it is “rooted in computer technology in order to
`overcome a problem specifically arising in the realm of computer
`networks—that of digital data piracy.” Paper 24, (“PO Resp.”) 13.
`
`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, each claim 32 recites a “machine,” e.g., a “data access
`terminal,” under § 101. Section 101, however, “contains an important
`
`
`5 In its Response, Patent Owner argues that this declaration should be given
`little or no weight. PO Resp. 3–4. Because Patent Owner 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 Patent Owner’s argument as part of our
`analysis of the motion to exclude, below.
`
`6
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`CBM2014-00194
`Patent 8,118,221 B2
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`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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`CBM2014-00194
`Patent 8,118,221 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 claim 32 is directed to the abstract idea of
`“enabling limited use of paid-for/licensed content.” Pet. 23. Although
`Patent Owner does not concede, in its brief, that claim 32 is directed to an
`abstract idea, it does not persuasively explain how the claimed subject
`matter escapes this classification. PO Resp. 11–28; see also Paper 47
`(transcript of oral hearing) 46:21–47:11 (Patent Owner arguing that the
`subject matter does not claim an abstract idea, but conceding this argument
`was not made in the briefs).
`We are persuaded that claim 32 is drawn to a patent-ineligible abstract
`idea. Specifically, claim 32 is directed to performing the fundamental
`economic practice of conditioning and controlling access to content based on
`payment. For example, claim 32 recites “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.” Furthermore, as discussed above, the ’221 patent
`discusses addressing recording industry concerns of data pirates offering
`unauthorized access to widely available compressed audio recordings. Ex.
`1001, 1:20–55. The patent specification explains that these pirates obtain
`data either by unauthorized or legitimate means and then make the data
`
`8
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`CBM2014-00194
`Patent 8,118,221 B2
`
`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 ’221 patent proposes to solve this problem
`by restricting access to data on a portable data carrier based upon payment
`validation. Id. at 1:59–2:4. The ’221 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. at 1:59–2:15.
`Although the specification refers to data piracy on the Internet, claim
`32 is not limited to the Internet. Claim 32 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,” and “write the
`retrieved data into the data carrier.” The underlying concept of claim 32,
`particularly when viewed in light of the ’221 patent specification, is
`conditioning and controlling access to content based upon payment. As
`discussed further below, 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 ’221 patent specification and
`the language of claim 32 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”).
`
`9
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`CBM2014-00194
`Patent 8,118,221 B2
`
`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 “[t]he claims of the ’221 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.”
`Paper 31, (“Reply 11”) (quoting Ex. 1003 ¶ 126). Petitioner persuades us
`that claim 32 of the ’221 patent does not add an inventive concept sufficient
`to ensure that the patent in practice amounts to significantly more than a
`patent 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
`
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`CBM2014-00194
`Patent 8,118,221 B2
`
`claim 32 are generic features of a computer that do not bring claim 32 within
`§ 101 patent eligibility. Pet. 24–29; Reply 11–21.
`
`a. Technical Elements
`Petitioner argues that claim 32 is unpatentable because it is directed to
`an abstract idea and any technical elements it recites are repeatedly
`described by the ’221 patent itself as “both ‘conventional’ and as being used
`‘in a conventional manner.’” Pet. 23 (citing Ex. 1001, 4:4–5, 16:46–49,
`21:33–38). Patent Owner disagrees, arguing that claim 32 is patentable
`because it “recite[s] specific ways of using distinct memories, data types,
`and use rules that amount to significantly more than the underlying abstract
`idea.” PO Resp. 18 (quoting Ex. 2049, 19). We agree with Petitioner for the
`following reasons.
`The ’221 patent specification treats as well-known all potentially
`technical aspects of claim 32, including the “data carrier,” “data supplier,”
`“payment validation system,” and “mobile communication device.” See
`Reply 13 (citing Ex. 1003 ¶ 24; Ex. 1001, 4:4–5, 16:46–50, 18:7–11). 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 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,
`11:28–30; see also id. at 14:25–29 (“[l]ikewise data stores 136, 138 and 140
`may comprise a single physical data store or may be distributed over a
`
`11
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`CBM2014-00194
`Patent 8,118,221 B2
`
`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 system”
`may be “a signature transporting type e-payment system” or “a third party e-
`payment system.” Id. at 7:11–16, 8:18–22, 13:36–38 (“an e-payment system
`according to, for example, MONDEX, Proton, and/or Visa cash compliant
`standards”). Further, the claimed computer code performs generic computer
`functions, such as reading, receiving, transmitting, and outputting data. See
`Pet. 24–29; Reply 14–16. 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 claim 32 “recite[s] 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. 18. Claim 32 does not recite any
`particular or “distinct memories.” To the extent Patent Owner 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
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`conventional manner is insufficient to confer the specificity required to
`elevate the nature of the claim into a patent-eligible application.
`Claim 32 also recites several generic data types including, “data,”
`“retrieved data,” “code,” “payment data,” “payment validation data,”
`“access rule,” “use rule data,” “user-stored data identifier data,” and
`“associated value 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
`on the [ineligible concept] itself.’”) (brackets in original). Patent Owner
`does not point to any inventive concept in the ’221 patent related to the way
`the recited data types are constructed or used. In fact, the ’221 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, claim 32 does not cover a “particular machine.”
`Pet. 31–33; 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 claim 32 does not transform an
`article into a different state of thing. Pet. 33–34.
`Thus, we determine the potentially technical elements of the claim 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.
`
`13
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`b. DDR Holdings
`Relying on the Federal Circuit’s decision in DDR Holdings, Patent
`Owner asserts that claim 32 is directed to statutory subject matter because
`the claimed solution is “necessarily rooted in computer technology in order
`to overcome a problem specifically arising in the realm of computer
`networks.’” PO Resp. 12 (quoting DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245, 1257 (Fed. Cir. 2014)). Patent Owner contends that claim 32
`is “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
`digital content to be obtained effectively and legitimately.” Id. at 12–13.
`Patent Owner further argues that because claim 32 also “utilizes at least one
`access rule, also written to the data carrier,” “access control to the digital
`content can be continuously 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 claim 32 is distinguishable from the claims in
`DDR Holdings. Reply 19–21. 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
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`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 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 claim 32 is distinguishable from the
`claims at issue in DDR Holdings. As an initial matter, we are not persuaded
`by Patent Owner’s argument that claim 32 is “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[es] . . . a challenge
`particular to the Internet.” PO Resp. 13. Data piracy exists in contexts other
`than the Internet. See Reply 17 (identifying other contexts in which data
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`piracy is a problem). For example, data piracy was a problem with compact
`discs. See Ex. 1001 5:9–12 (“where 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 solution
`provided by claim 32 is not rooted in specific computer technology, but is
`based on conditioning and controlling access to content only when payment
`is validated. See Reply 15–16.
`Even accepting Patent Owner’s assertion that claim 32 addresses data
`piracy on the Internet (PO Resp. 13), we are not persuaded that it does so by
`achieving a result that overrides the routine and conventional use of the
`recited devices and functions. In fact, the differences between claim 32 and
`the claims at issue in DDR Holdings are made clear by Patent Owner in its
`table mapping claim 32 of the ’221 patent to claim 19 of the patent at issue
`in DDR Holdings. PO Resp. 14–17. For example, Patent Owner compares
`the limitation highlighted by the Federal Circuit in DDR Holdings with 3
`limitations recited by claim 32: (1) “code to retrieve from the data supplier
`and output to a user-stored data identifier data and associated value data and
`use rule data for a data item available from the data supplier”; (2) “code
`responsive to the payment validation data to . . . to write the retrieved data
`into the data carrier”; and (3) “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
`
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`CBM2014-00194
`Patent 8,118,221 B2
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`validation system.” PO Resp. 16–17. Patent Owner, however, fails to
`identify how these limitations of claim 32, like the corresponding DDR
`Holdings limitation, do not “adher[e] to the routine, conventional
`functioning” of the technology being used. PO Resp. 14–24; DDR
`Holdings, 773 F.3d at 1258. Instead, unlike the claims in DDR Holdings,
`these limitations, like all the other limitations of claim 32, 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. They 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).
`On the other hand, the claims at issue in Ultramercial, like claim 32,
`were also directed to a method for distributing media products. Instead of
`conditioning and controlling access to data based on payment, as in claim
`32, 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 claim 32 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, writing data to a data carrier, and
`transmitting a portion of the payment validation data 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,
`
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`CBM2014-00194
`Patent 8,118,221 B2
`
`and use of the Internet does not transform an otherwise abstract idea into
`patent-eligible subject matter.”).
`We are, therefore, persuaded that claim 32 is 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 Patent Owner argues claim 32 includes an “inventive
`
`concept” because of the specific combination of elements in claim 32, we
`disagree. Specifically, Patent Owner refers to the following disclosure from
`the ’221 patent specification: “[b]y combining digital rights management
`with content data storage using a single carrier, the stored content data
`becomes mobile and can be accessed anywhere while retaining control over
`the stored data for the data content provider or data copyright owner.” PO
`Resp. 8–9 (quoting Ex. 1001, 5:29–33). Referring to this disclosure, Patent
`Owner argues that “[b]y using a system that combines on the data carrier
`both the digital content and the use rules/use status data, access control to
`the digital content can be continuously enforced prior to access to the digital
`content.” Id. at 9. Thus, Patent Owner concludes that “[b]y comparison,
`unlike a system that uses use rules/use status data 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” and “there was no way to track
`a use of the DVD such that a system could limit its playback to [a] specific
`number of times (e.g. three times) or determine that the DVD had only been
`partially used.” Id.
`The concept of storing two different types of information in the same
`place or on the same device is an age old practice. For example, storing
`
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`CBM2014-00194
`Patent 8,118,221 B2
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`names and phone numbers (two different types of information) in the same
`place, such as a book, or on a storage device, such as a memory device
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