Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 31
`Entered: November 7, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00127
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`
`CBM2015-00127
`Patent 7,334,720 B2
`
`A. Background
`
`INTRODUCTION
`
`Apple Inc. (“Petitioner”), filed a Petition to institute covered business
`
`method patent review of claims 4–12 and 16–18 of U.S. Patent No.
`
`7,334,720 B2 (Ex. 1001, “the ’720 patent”) pursuant to § 18 of the Leahy-
`
`Smith America Invents Act (“AIA”). Paper 2 (“Pet.”).1 Smartflash LLC
`
`(“Patent Owner”) filed a Preliminary Response. Paper 5 (“Prelim. Resp.”).
`
`On November 10, 2015, we instituted a covered business method patent
`
`review (Paper 7, “Institution Decision” or “Inst. Dec.”) based upon
`
`Petitioner’s assertion that claims 4–12 and 16–18 (“the challenged claims”)
`
`are directed to patent ineligible subject matter under 35 U.S.C. § 101. Inst.
`
`Dec. 25.2
`
`Subsequent to institution, Patent Owner filed a Patent Owner
`
`Response (Paper 17, “PO Resp.”) and Petitioner filed a Reply (Paper 21,
`
`“Pet. Reply”) to Patent Owner’s Response.
`
`Patent Owner, with authorization, filed a Notice of Supplemental
`
`Authority. Paper 28 (“Notice”). Petitioner filed a Response to Patent
`
`Owner’s Notice. Paper 29 (“Notice Resp.”).
`
`We held a joint hearing of this case and several other related cases on
`
`July 18, 2016. Paper 30 (“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
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–07 (2011).
`
`2 Although Patent Owner argues that claim 17 is not indefinite, we did not
`institute a review of claim 17 on that basis. Inst. Dec. 25.
`
`2
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`

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`CBM2015-00127
`Patent 7,334,720 B2
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`preponderance of the evidence that claims 4–12 and 16–18 of the ’720
`
`patent are directed to patent ineligible subject matter under 35 U.S.C. § 101.
`
`B. Related Matters
`
`The ’720 patent is the subject of the following district court cases:
`
`Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145 (E.D. Tex.); Smartflash
`
`LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D. Tex.); Smartflash LLC v.
`
`Apple Inc., Case No. 6:13-cv-447 (E.D. Tex.); Smartflash LLC v. Samsung,
`
`Case No. 6:13-cv-448 (E.D. Tex.), and; Smartflash LLC v. Amazon.Com,
`
`Inc., Case No. 6:14-cv-992 (E.D. Tex.). Pet. 2, 35–36; Paper 4, 4–5.
`
`We have issued three previous Final Written Decisions in reviews
`
`challenging the ’720 patent. In CBM2015-000283, we found claims 1 and 2
`
`of the ’720 to be unpatentable Apple Inc. et. al v. Smartflash LLC, Case
`
`CBM2015-00028, (PTAB May 26, 2016) (Paper 44). In CBM2015-000294,
`
`we found claims 3 and 15 of the ’720 to be unpatentable. Apple Inc. et. al v.
`
`Smartflash LLC, Case CBM2015-00029, (PTAB May 26, 2016) (Paper 43).
`
`In CBM2014-001905, we cound claims 13 and 14 of the ’720 to be
`
`unpatentable. Samsung Electronics America, Inc. et. al v. Smartflash LLC,
`
`Case CBM2014-00190, (May 26, 2016) (Paper 47).
`
`
`3 The challenge to claim 1 of U.S. Patent No. 7,334,720 B2 in CBM2015-
`00125 was consolidated with this proceeding. CBM2015-00028, Paper 29,
`9–11.
`
`4 The challenge to claim 15 of U.S. Patent No. 7,334,720 B2 in CBM2015-
`00125 was consolidated with this proceeding. CBM2015-00029, Paper 28,
`9–11.
`
`5 CBM2015-00118 (U.S. Patent 7,334,720 B2) was consolidated with this
`proceeding. CBM2014-00190, Paper 31, 6–7.
`
`3
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`CBM2015-00127
`Patent 7,334,720 B2
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`C. The ’720 Patent
`
`The ’720 patent relates to “a portable data carrier for storing and
`
`paying for data and to computer systems for providing access to data to be
`
`stored,” and the “corresponding methods and computer programs.”
`
`Ex. 1001, 1:6–10. Owners of proprietary data, especially audio recordings,
`
`have an urgent need to address the prevalence of “data pirates,” who make
`
`proprietary data available over the Internet without authorization. Id. at
`
`1:15–41. The ’720 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:46–62. According to the ’720 patent, this combination of the
`
`payment validation means with the data storage means allows data owners to
`
`make their data available over the Internet without fear of data pirates. Id. at
`
`1:62–2:3.
`
`As described, the portable data storage device is connected to a
`
`terminal for Internet access. Id. at 1:46–55. The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`storage device from a data supplier. Id. The data on the portable storage
`
`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.”).
`
`D. Challenged Claims
`
`The claims under review are claims 4–12 and 16–18 of the ’720
`
`patent. Inst. Dec. 25. Of the challenged claims, claims 4–12 depend,
`
`4
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`CBM2015-00127
`Patent 7,334,720 B2
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`directly or indirectly, from independent claim 3 (held unpatentable under
`
`§ 101 in CBM2015-00029). Claims 16–18 depend, directly or indirectly,
`
`from independent claim 14 (held unpatentable under § 101 in CBM2014-
`
`00190). Claims 3 and 14 are illustrative of the claimed subject matter and
`
`recite the following:
`
`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:
`
`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. 1001, 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;
`
`5
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`CBM2015-00127
`Patent 7,334,720 B2
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`forwarding the payment data to a payment validation
`system;
`
`retrieving data from the data supplier;
`
`writing the retrieved data into the data carrier;
`
`receiving at least one access rule from the data supplier;
`
`and
`
`writing the at least one access rule into the data carrier,
`the at least one access rule specifying at least one condition for
`accessing the retrieved data written into the data carrier, the at
`least one condition being dependent upon the amount of
`payment associated with the payment data forwarded to the
`payment validation system.
`
`Id. at 28:5–20.
`
`A. Claim Construction
`
`ANALYSIS
`
`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
`
`of the ’720 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
`
`The Petition challenges claims 4–12 and 16–18 as directed to patent-
`
`ineligible subject matter under 35 U.S.C. § 101. Pet. 43–73. According to
`
`the Petition, the challenged claims are directed to an abstract idea without
`
`additional elements that transform the claims into a patent-eligible
`
`application of that idea. Id. Petitioner submits a declaration from Dr. John
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`6
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`CBM2015-00127
`Patent 7,334,720 B2
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`P. J. Kelly in support of its Petition.6 Ex. 1019. Patent Owner argues that
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`the challenged claims are statutory because they are “‘rooted in computer
`
`technology in order to overcome a problem specifically arising in the realm
`
`of computer networks,” that of “data content piracy.’” PO Resp. 1–2
`
`(citation omitted).
`
`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 of the challenged claims recites a “machine,” i.e., a “data
`
`access terminal” (claims 4–12) or a “process,” i.e., a “method” (claims 16–
`
`18), under § 101. Section 101, however, “contains an important implicit
`
`exception [to subject matter eligibility]: Laws of nature, natural phenomena,
`
`and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank
`
`Int’l., 134 S. Ct. 2347, 2354 (2014) (citing Assoc. for Molecular Pathology
`
`v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal quotation
`
`marks and brackets omitted)). In Alice, the Supreme Court reiterated the
`
`framework set forth previously in Mayo Collaborative Services v.
`
`Prometheus Laboratories, 132 S. Ct. 1289, 1293 (2012) “for distinguishing
`
`patents that claim laws of nature, natural phenomena, and abstract ideas
`
`
`6 In its Response, Patent Owner argues that this declaration should be given
`little or no weight. PO Resp. 5–16. Because Patent Owner has filed a
`Motion to Exclude (Paper 24) that includes a request to exclude Dr. Kelly’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.
`
`7
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`CBM2015-00127
`Patent 7,334,720 B2
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`from those that claim patent-eligible applications of these 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, 1353–55 (Fed. Cir. 2014) (stating that patent
`
`claims related to “long-familiar commercial transactions” and relationships
`
`(i.e., business methods), no matter how “narrow” or “particular,” are
`
`directed to abstract ideas as a matter of law). As a further example, the
`
`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
`
`Circuit].” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
`
`Cir. 2015) (citations omitted).
`
`Petitioner argues that the challenged claims are directed to the abstract
`
`idea of “payment for and controlling access to data.” Pet. 43. Specifically,
`
`Petitioner contends that “the challenged claims are drawn to the concepts of
`
`8
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`payment and controlling access using rules in that they recite steps to and
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`‘code to,’ e.g., read payment data, receive payment validation data, retrieve
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`and write data in response to payment validation data, and receive and write
`
`access rules in response to payment validation data.” Id. at 46–47.
`
`We are persuaded that the challenged claims are drawn to a patent-
`
`ineligible abstract idea. Specifically, the challenged claims are directed to
`
`performing the fundamental economic practice of conditioning and
`
`controlling access to content. For example, claim 3 (from which challenged
`
`claims 4–12 depend) recites “code responsive to the payment validation data
`
`to retrieve data from the data supplier and to write the retrieved data into the
`
`data carrier.” Claim 14 (from which challenged clams 16–18 depend)
`
`recites “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.”
`
`As discussed above, the ’720 patent discusses addressing recording
`
`industry concerns of data pirates offering unauthorized access to widely
`
`available compressed audio recordings. Ex. 1001, 1:26–41. The ’720 patent
`
`proposes to solve this problem by restricting access to data on a portable
`
`data carrier based upon payment validation. Id. at 1:46–1:59. The ’720
`
`patent makes clear that the heart of the claimed subject matter is restricting
`
`access to stored data based on supplier-defined access rules and validation of
`
`payment. Id. at 1:60–2:3.
`
`Although the specification refers to data piracy on the Internet, the
`
`challenged claims are not limited to the Internet. The underlying concept of
`
`9
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`CBM2015-00127
`Patent 7,334,720 B2
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`the challenged claims, particularly when viewed in light of the Specification,
`
`is paying for and/or controlling access to content, as Petitioner contends. As
`
`discussed further below, this is a fundamental economic practice long in
`
`existence in commerce. See Bilski, 561 U.S. at 611.
`
`Patent Owner argues that claims claims 4–12 and 16–18 are directed
`
`to “machines or processes,” and “are not directed to an abstract idea.” PO
`
`Resp. 1. Specifically, Patent Owner argues that claims 4–12 cover “a data
`
`access terminal comprised of real-world, specialized physical components”
`
`(id. at 24) and claims 16–18 “are directed to real-world useful processes (id.
`
`at 25). Patent Owner, however, cites no controlling authority to support the
`
`proposition that subject matter is patent-eligible as long as it is directed to
`
`“machines with specialized physical components” or “real-world useful
`
`processes.” Id. at 24–25. As Petitioner correctly points out (Pet. Reply 2–
`
`3), that argument is contradicted by well-established precedent:
`
`There is no dispute that a computer is a tangible system (in § 101
`terms, a “machine”), or that many computer-implemented claims
`are formally addressed to patent-eligible subject matter. But if
`that were the end of the § 101 inquiry, an applicant could claim
`any principle of the physical or social sciences by reciting a
`computer system configured to implement the relevant concept.
`Such a result would make the determination of patent eligibility
`“depend simply on the draftman’s art,” … thereby eviscerating
`the rule that “‘… abstract ideas are not patentable.’”
`
`Alice Corp., 134 S. Ct. at 2358-59 (internal citations omitted).
`
`Patent Owner also argues that the challenged claims are like those
`
`found not to be directed to an abstract idea in Google Inc. v. Network-1
`
`Technologies, Inc., CBM2015-00113, and in Hulu, LLC v. iMTX Strategic,
`
`LLC, CBM2015-00147. PO Resp. 21–21. These decisions are non-
`
`precedential and distinguishable. In CBM2015-00113, the panel’s
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`10
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`determination turned on a step requiring “correlating, by the computer
`
`system using a non-exhaustive, near neighbor search, the first electronic
`
`media work with [an or the first] electronic media work identifier” and on
`
`the Petitioner’s formulation of the alleged abstract idea. Google Inc. v.
`
`Network-1 Technologies, Inc., CBM2015-00113, (PTAB Oct. 19, 2015)
`
`(Paper 7, 13).
`
`Patent Owner argues that the challenged claims are like those at issue
`
`in CBM2015-00113 because they “each of the instituted claims requires
`
`retrieval or forwarding of data responsive to or correlated with some other
`
`data (e.g., payment validation data or payment data).” PO Resp. 22. As the
`
`panel in CBM2015-00113 explained, however, the claims at issue there
`
`required “particular types of searching processes”—i.e., “a non-exhaustive,
`
`near neighbor search”—that are different than the abstract idea alleged by
`
`Petitioner in that proceeding. CBM2015-00113, Paper 7, 12–13. In this
`
`case, none of the challenged claims recite a specific search process by which
`
`retrieval or forwarding of data is correlated with some other data. For
`
`example, claim 3 recites “code responsive to the payment validation data to
`
`recdive at least one access rule from the data supplier and to write the lat
`
`least one access rule into the data carrier, the at least one access rule
`
`specifying at least one condition for accessing the retrieved data into the data
`
`carrier.” Claim 14 recites “writing the lat least one access rule into the data
`
`carier, the at least one access rule specifying at least one condidtion for
`
`accessing the retrieved data written into the data carrier.” With respect to
`
`CBM2015-00147, Patent Owner mischaracterizes the Institution Decision.
`
`PO Resp. 23–24. The panel’s determination in that case was based on step
`
`two, not step one, of the Mayo/Alice test. Hulu, LLC v. iMTX Strategic,
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`11
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`LLC, CBM2015-00147 (PTAB Nov. 30, 2015) (Paper 14, 14) (“As in DDR,
`
`we are persuaded that, however the abstract idea is characterized, the ʼ854
`
`patent claims do not meet the second prong of the Mayo/Alice test.”).
`
`Patent Owner’s Notice of Supplemental Authority also does not alter
`
`our determination. Patent Owner argues that the challenged claims are
`
`“‘directed to an improvement to computer functionality.’” Notice 1 (quoting
`
`Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016)). The
`
`challenged claims, according to Patent Owner, are “directed to specific
`
`organization of data and defined sequences of transaction steps with distinct
`
`advantages over alternatives” (id. at 2) and, therefore, “like those in Enfish,
`
`‘are directed to a specific implementation of a solution to a problem,’ in
`
`Internet digital commerce” (id. at 3) (emphasis added by Patent Owner).
`
`Unlike the self-referential table at issue in Enfish, however, the challenged
`
`claims do not purport to be an improvement to the way computers operate.
`
`Instead, they “merely implement an old practice in a new environment.”
`
`FairWarning IP, LLC v. Iatric Systems, Inc., No. 2015-1985, slip op. 7 (Fed.
`
`Cir. Oct. 11, 2016). Petitioner argues, and we agree, that the challenged
`
`claims, like those in In re TLI Communications LLC Patent Litigation, 823
`
`F.3d 607 (Fed. Cir. 2016), “‘perform[] generic computer functions such as
`
`storing, receiving, and extracting data’ using ‘physical components’” that
`
`“‘behave exactly as expected according to their ordinary use’ and ‘merely
`
`provide a generic environment in which to carry out the abstract idea’ of
`
`controlling access to content based on payment and/or rules.” Notice Resp.
`
`2–3 (quoting In re TLI Communications LLC Patent Litigation, 823 F.3d at
`
`612–15). The limitations of the challenged claims—e.g., “code to read,”
`
`12
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`“code to receive,” “code to retreive,” “code to write,” “reading,”
`
`“forwarding,” “retrieving,” and “writing”—are so general that they
`
`do no more than describe a desired function or outcome, without
`providing any limiting detail
`that confines the claim to a
`particular solution to an
`identified problem. The purely
`functional nature of the claim confirms that it is directed to an
`abstract idea, not to a concrete embodiment of that idea.
`
`Affinity Labs of Texas, LLC v. Amazon.com Inc., No. 2015-2080, slip
`
`op. 7 (Fed. Cir. Sept. 23, 2016) (citation omitted).
`
`We are, thus, persuaded, based on the specification and the language
`
`of the challenged claims, that claims 4–12 and 16–18 of the ’720 patent are
`
`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
`
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`Patent 7,334,720 B2
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`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 c]laims’ ‘additional features’
`
`recite only well-known, routine, and conventional computer components and
`
`activities, which is insufficient to establish an inventive concept.” Pet.
`
`Reply 6. We are persuaded that claims 4–12 and 16–18 of the ’720 patent
`
`do 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 the rationale
`
`articulated in the Petition that the additional elements of the challenged
`
`claims are either field of use limitations and/or generic features of a
`
`computer that do not bring the challenged claims within § 101 patent
`
`eligibility. Pet. 52–73.
`
`a. Technical Elements
`
`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. 52 (citations omitted).
`
`Patent Owner disagrees, arguing that the challenged claims are patentable
`
`because they recite “specific ways of using distinct memories, data types,
`
`and use rules that amount to significantly more than the underlying abstract
`
`14
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`idea.” PO Resp. 37 (quoting Ex. 2049, 19) (emphasis omitted). We agree
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`with Petitioner for the following reasons.
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`The ’720 patent treats as well-known all potentially technical aspects
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`of the challenged claims, which simply require generic computer
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`components (e.g., interfaces, data carrier, program store, and processor). See
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`Pet. Reply 6–7, 15 (citing Ex. 1001, 3:64–4:2, 11:36–38, 12:38–41, 13:46–
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`49, 16:47–67, 18:24–30). With respect to the recited “data carrier” and
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`“payment validation system” in claims 3 and 14, for example, the
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`Specification notes that the data carrier may be a generic, known, hardware
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`device such as a “standard smart card,” and that “[t]he payment validation
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`system may be part of the data supplier’s computer systems or it may be a
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`separate e-payment system.” See Ex. 1001, 8:22–25, 8:64–66, 11:36–39,
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`13:46–58. Moreover, on this record, Patent Owner has not argued
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`persuasively that any of the other potentially technical additions to the
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`claims performs a function that is anything other than “purely conventional.”
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`Alice, 134 S. Ct. at 2359. The use of a data carrier and the linkage of
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`existing hardware devices appear to be “‘well-understood, routine,
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`conventional activit[ies]’ previously known to the industry.” Alice, 134 S.
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`Ct. at 2358; Mayo, 132 S. Ct. at 1294.
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`Further, “[t]he challenged claims’ ‘code to’ and other functional
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`limitations simply instruct that the abstract ideas of payment for and
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`controlling access to data should be implemented in software.” Pet. 56. The
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`claimed computer code performs generic computer functions, e.g., code to
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`receive/retrieve/write data (claim 3); “reading,” “forwarding,” “retrieving,”
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`“writing,” “receiving,” and “transmitting” (claim 14). See Pet. 56–59. The
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`recitation of these generic computer functions is insufficient to confer
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`specificity. See Content Extraction and Transmission LLC v. Wells Fargo
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`Bank, Nat’l Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of
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`data collection, recognition, and storage is undisputedly well-known.
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`Indeed, humans have always performed these functions.”).
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`Moreover, we are not persuaded that claims 4–12 and 16–18 “recite
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`specific ways of using distinct memories, data types, and use rules that
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`amount to significantly more than” paying for and/or controlling access to
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`content. See PO Resp. 37 (quoting Ex. 2049, 19) (emphasis omitted). The
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`challenged claims generically recite several memories, including “a program
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`store” and “data carrier,” and generically recite several data types, including
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`“code,” payment data,” “payment validation data,” “data,” and “access rule.”
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`We are not persuaded that the recitation of these memories and data types,
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`by itself, amounts to significantly more than the underlying abstract idea.
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`Patent Owner does not point to any inventive concept in the ’720 patent
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`related to the way these memories or data types are constructed or used. In
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`fact, the ’720 patent simply discloses these memories and data types with no
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`description of the underlying implementation or programming. See Content
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`Extraction and Transmission LLC, 776 F.3d at 1347 (“The concept of data
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`collection, recognition, and storage is undisputedly well-known. Indeed,
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`humans have always performed these functions.”). This recitation of generic
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`computer memories and data types, being used in the conventional manner,
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`is insufficient to confer the specificity required to elevate the nature of the
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`claim into a patent-eligible application. Alice, 134 S. Ct. at 2355 (quoting
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`Mayo, 132 S. Ct. at 1294) (“We have described step two of this analysis as a
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`search for an ‘inventive concept’—i.e., an element or combination of
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`elements that is ‘sufficient to ensure that the patent in practice amounts to
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`significantly more than a patent upon the [ineligible concept] itself.’”)
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`(brackets in original); Affinity Labs, No. 2015-2080, slip op. 10–11 (“The
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`claims thus do not go beyond ‘stating [the relevant] functions in general
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`terms, without limiting them to technical means for performing the functions
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`that are arguably an advance over conventional computer and network
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`technology.’”).
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`In addition, because the recited elements can be implemented on a
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`general purpose computer, the challenged claims do not cover a “particular
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`machine.” Pet. 73; 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 the challenged claims do not
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`transform an article into a different state or thing. Id.
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`Thus, we determine, the potentially technical elements of the
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`challenged claims are nothing more than “generic computer
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`implementations” and perform functions that are “purely conventional.”
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`Alice, 134 S. Ct. at 2358–59; Mayo, 132 S. Ct. at 1294.
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`b. DDR Holdings
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`Relying on the Federal Circuit’s decision in DDR Holdings, Patent
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`Owner asserts that the challenged claims are directed to statutory subject
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`matter because the claimed solution is “‘necessarily rooted in computer
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`technology in order to overcome a problem specifically arising in the realm
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`of computer networks.’” PO Resp. 1–2, 30 (quoting DDR Holdings, LLC v.
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`Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). Patent Owner
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`contends that
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`By 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
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`to the digital content. By 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.
`Similarly, there was no way to track a use of the DVD such that
`a system could limit its playback to specific number of times
`(e.g., three times) or determine that the DVD had only been
`partially used.
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`Id. at 19.
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`Petitioner responds that the challenged claims are distinguishable
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`from the claims in DDR Holdings. Pet. Reply 13–16. The DDR Holdings
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`patent is directed at retaining website visitors when clicking on an
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`advertisement hyperlink within a host website. 773 F.3d at 1257.
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`Conventionally, clicking on an advertisement hyperlink would transport a
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`visitor from the host’s website to a third party website. Id. The Federal
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`Circuit distinguished this Internet-centric problem over “the ‘brick and
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`mortar’ context” because “[t]here is . . . no possibility that by walking up to
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`[a kiosk in a warehouse store], the customer will be suddenly and completely
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`transported outside the warehouse store and relocated to a separate physical
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`venue associated with the third party.” Id. at 1258. The Federal Circuit
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`further determined that the DDR Holdings claims specify “how interactions
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`with the Internet are manipulated to yield a desired result—a result that
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`overrides the routine and conventional sequence of events ordinarily
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`triggered by the click of a hyperlink.” Id. The unconventional result in
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`DDR Holdings is the website visitor is retained on the host website, but still
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`is able to purchase a product from a third-party merchant. Id. at 1257–58.
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`The limitation referred to by the Federal Circuit in DDR Holdings recites
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`“using the data retrieved, automatically generate and transmit to the