Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 33
`Entered: November 10, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GOOGLE, INC.,
`Petitioner
`
`and
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-001261
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`1 CBM2015-00126 has been consolidated with CBM2015-00130.
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`A. Background
`
`INTRODUCTION
`
`Google, Inc., filed a Petition to institute covered business method
`
`patent review of claim 3 of U.S. Patent No. 8,118,221 B2 (“the ’221
`
`patent”). CBM2015-00126, Paper 32 (“’126 Pet.”). Apple Inc., also filed a
`
`Petition to institute covered business method patent review of claims 3–10,
`
`12–31, and 33 of the ’221 patent. CBM2015-00130, Paper 2 (“Pet.”). On
`
`November 16, 2015, we instituted a covered business method patent review
`
`in CBM2015-00126 (Paper 8, “’126 Institution Decision” or “’126 Inst.
`
`Dec.”) based upon Google’s assertion that claim 3 is directed to patent
`
`ineligible subject matter under 35 U.S.C. § 101. CBM2015-00126, Inst.
`
`Dec. 19. The same day we instituted a covered business method patent
`
`review in CBM2015-00130 (Paper 9, “Institution Decision” or “Inst. Dec.”)
`
`based upon Apple’s assertion that claims 3–10, 15–31, and 33 are directed to
`
`patent ineligible subject matter under 35 U.S.C. § 101 and that claim 22 is
`
`indefinite under 35 U.S.C. § 112. CBM2015-00130, Inst. Dec. 25.
`
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed
`
`Patent Owner Responses (CBM2015-00126, Paper 21 (“’126 PO Resp.”);
`
`CBM2015-00130, Paper 19 (“PO Resp.”) and Google and Apple each filed
`
`Replies (CBM2015-00126, Paper 22 (“’126 Reply”); CBM2015-00130,
`
`Paper 23 (“Reply”) to Patent Owner’s Response, respecitvely.
`
`
`2 Google filed two versions of the Petition: Paper 2, which is sealed and
`accessible to the parties and Board only, and Paper 3, which is a public
`version of the Petition containing a small portion of redacted text. For
`purposes of this Decision, we refer only to the public version of the Petition.
`
`2
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`Patent Owner, with authorization, filed Notices of Supplemental
`
`Authority. CBM2015-00126, Paper 28; CBM2015-00130, Paper 30
`
`(“Notice”). Google and Apple each filed Responses to Patent Owner’s
`
`Notices, respectively. CBM2015-00126, Paper 29 (“126 Notice Resp.”);
`
`CBM2015-00130, Paper 31 (“Notice Resp.”).
`
`We held a joint hearing of both cases, along with several other related
`
`cases, on July 18, 2016. CBM2015-00126, Paper 30; CBM2015-00130,
`
`Paper 32 (“Tr.”).3 At the hearing, we discussed with all parties the
`
`possibility of consolidating these two cases because of the overlapping
`
`issues. Tr. 30:3–16, 72:11–73:12. No party objected. Id. Thus, we issue
`
`one opinion covering both CBM2015-00126 and CBM2015-00130.4
`
`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 3–10,
`
`15–31, and 33 of the ’221 patent are directed to patent ineligible subject
`
`matter under 35 U.S.C. § 101. We also determine that claim 22 is indefinite
`
`under 35 U.S.C. § 112.
`
`B. Related Matters and Estoppel
`
`We have issued two previous Final Written Decisions in reviews
`
`challenging the ’221 patent. In CBM2014-00102, we found claims 1, 2, and
`
`11–14 unpatentable under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC,
`
`
`3 Unless otherwise noted (using “’126” prior to the citation), all future
`citations in this Decision are to CBM2015-00130.
`
`4 For purposes of this Decision, the term “Petitioner” refers to both Google
`and Apple.
`
`3
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`Case CBM2014-00102, (PTAB Sept. 25, 2015) (Paper 52). In CBM2014-
`
`00194, we found claim 32 unpatentable under 35 U.S.C. § 101. Samsung
`
`Electronics America, Inc. v. Smartflash LLC, Case CBM2014-00194,
`
`(PTAB Mar. 29, 2016) (Paper 51).
`
`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 . . . .”).
`
`4
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`D. Challenged Claims
`
`The claims under review are claims 3–10, 15–31, and 33 of the ’221
`
`patent (the “challenged claims”). Inst. Dec. 24. Of the challenged claims,
`
`claim 17, 24, and 28 are independent, claims 3–10 depend directly or
`
`indirectly from unchallenged independent claim 1, claims 15 and 16 depend
`
`directly or indirectly from unchallenged independent claim 12, claims 18–23
`
`depend directly or indirectly from challenged independent claim 17, claims
`
`25–27 depend directly or indirectly from challenged independent claim 24,
`
`claims 29–31 depend directly or indirectly from challenged independent
`
`claim 28, and claim 33 depends from unchallenged independent claim 32.
`
`Claims 1, 3, 12, 17, and 24 are reproduced below:
`
`A data access terminal for retrieving data from a data
`1.
`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 implementable by a
`processor; and
`
`a processor, coupled to the first interface, to the data
`carrier interface, and to 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.
`
`5
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`Ex. 1001, 25:50–62.
`
`A data access terminal as claimed in claim 1, further
`3.
`comprising code to transmit at least a portion of the payment
`validation data to the data supplier or to a destination received
`from the data supplier.
`
`Id. at 25:62–65.
`
`12. 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; and
`
`writing the retrieved data into the dat[a] carrier.
`
`Id. at 27:1–16.
`
`17. A data access device for retrieving stored data from a
`data carrier, the device comprising:
`
`a user interface;
`
`a data carrier interface;
`
`a program store storing code implementable by a
`processor; and
`
`a processor, coupled to the user interface, to the data
`carrier interface and to the program store for implementing the
`stored code, the code comprising:
`
`code to retrieve use status data indicating a use status of
`data stored on the carrier, and use rules data indicating
`permissible use of data stored on the carrier;
`
`code to evaluate the use status data using the use rules
`data to determine whether access is permitted to the stored data;
`and
`
`code to access the stored data when access is permitted.
`
`6
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`Id. at 27:1–16.
`
`24. A method of controlling access to data from a data
`carrier, comprising:
`
`retrieving use status data from the data carrier indicating
`past use of the stored data;
`
`retrieving use rules from the data carrier;
`
`evaluating the use status data using the use rules to
`determine whether access to data stored on the carrier is
`permitted; and
`
`permitting access to the data on the data carrier
`dependent on the result of said evaluating.
`
`Id. at 27:37–45.
`
`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 ’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 claims 3–10, 15–31, and 33 as directed to patent-
`
`ineligible subject matter under 35 U.S.C. § 101. Pet. 39–76; ’126 Pet. 18–
`
`33. According to Petitioner, the challenged claims are directed to an abstract
`
`idea without additional elements that transform the claims into a patent-
`
`7
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`eligible application of that idea. Id. Google submits a declaration from Dr.
`
`Justin Douglas Tygar in support of its Petition.5 ’126 Ex. 1002. Apple
`
`submits a declaration from Dr. John P. J. Kelly in support of its Petition.6
`
`Ex. 1021. Patent Owner argues that the challenged claims are “directed to
`
`machines or useful processes, both patent eligible subject matter under
`
`§ 101.” PO Resp. 20.
`
`1. Abstract Idea
`
`Under 35 U.S.C. § 101, we must first identify whether an invention
`
`fits within one of the four statutorily provided categories of patent-
`
`eligibility: “processes, machines, manufactures, and compositions of
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–714 (Fed. Cir.
`
`2014). Here, the challenged claims recite a “machine,”—i.e., a “data access
`
`terminal,” (claims 3-10, 32, 33), a “data access system” (claims 28–31), or a
`
`“data access device” (claims 17–23)—and a “process”—i.e., a “method”
`
`(claims 15, 16, 24–27)—under § 101. Section 101, however, “contains an
`
`important implicit exception [to subject matter eligibility]: Laws of nature,
`
`
`5 In its Response, Patent Owner argues that Dr. Tygar’s declaration should
`be given little or no weight. ’126 PO Resp. 5–11. Because Patent Owner
`has filed a Motion to Exclude (’126 Paper 24, 1–8) that includes a request to
`exclude Dr. Tygar’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 In its Response, Patent Owner argues that Dr. Kelly’s declaration should be
`given little or no weight. PO Resp. 6–17. Because Patent Owner has filed a
`Motion to Exclude (Paper 26, 7–12) 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.
`
`8
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`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
`
`9
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`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 the challenged claims are directed to the abstract
`
`idea of “controlling access to something based on validation that payment
`
`has been made” (’126 Pet. 21) or “payment for and/or controlling access to
`
`data” (Pet. 41). Specifically, Petitioner contends that “each challenged claim
`
`is drawn on its face to the concept of payment for and/or controlling access
`
`to data.” Pet. 43; see also ’126 Pet. 22 (“challenged claim 3 simply
`
`performs four steps inherent in the abstract idea of conditioning access on
`
`payment validation.”).
`
`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 17 recites “code to
`
`evaluate the use status data using the use rules data to determine whether
`
`access is permitted to the stored data.” Ex. 1001, 27:1–15.
`
`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
`
`Specification explains that these pirates obtain data either by unauthorized or
`
`legitimate means and then make the data available over the Internet without
`
`10
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`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, the
`
`challenged claims are not limited to the Internet. The underlying concept of
`
`the challenged claims, particularly when viewed in light of the Specification,
`
`is controlling access to content based upon payment 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 3–10, 15–31, and 33 are directed to
`
`“machines or useful processes, both patent eligible under § 101.” PO Resp.
`
`20. Patent Owner, however, cites no controlling authority to support the
`
`proposition that subject matter is patent-eligible as long as it is directed to
`
`“various real-world structural components” or “real-world physical
`
`components.” PO Resp. 21. As Petitioner correctly points out (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.
`
`11
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`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. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2358-59 (2014)
`
`(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. 23–26. These decisions are non-
`
`precedential and distinguishable. In CBM2015-00113, the panel’s
`
`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 “correlate use status data and/or
`
`use rules with content” (PO Resp. 21). 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. CBM2015-00113,
`
`Paper 7, 12–13. In this case, none of the challenged claims recite a specific
`
`search process by which use rules would be correlated with content data
`
`items. Some challenged claims do not even recite “use rules” or “use rule
`
`data” (e.g., claims 12, 15). Method claim 16 recites “retrieving from the
`
`data supplier a stored data item identifier and associated value data and use
`
`12
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`rule data,” but “retrieving” does not imply “correlating, by the computer
`
`system” using a particular type of search. With respect to CBM2015-00147,
`
`Patent Owner mischaracterizes the Institution Decision. PO Resp. 25–26.
`
`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, 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
`
`devices, systems, and methods for managing data to facilitate convenient
`
`and secure provision of digital content” (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
`
`13
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`“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 payment data,” “code to receive payment
`
`validation data,”—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 3–10, 15–31, and 33 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,
`
`14
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`132 S. Ct. at 1297). “This requires more than simply stating an abstract idea
`
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`
`the prohibition on patenting an ineligible concept cannot be circumvented by
`
`limiting the use of an ineligible concept to a particular technological
`
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`
`mere recitation of generic computer components performing conventional
`
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`
`computer will include a ‘communications controller’ and ‘data storage unit’
`
`capable of performing the basic calculation, storage, and transmission
`
`functions required by the method claims.”).
`
`Petitioner argues that “the [challenged c]laims’ ‘additional features’
`
`recite only well-known, routine, and conventional computer components and
`
`activities, which is insufficient to establish an inventive concept.” Reply 6.
`
`Petitioner adds that “[t]he specification [of the ’221 patent] itself disclaims
`
`[the claimed hardware elements] as non-inventive.” Id. (citing Ex. 1001,
`
`4:4–13, 11:28–29, 12:29–32, 13:35–38, 16:46–50, 18:7–17). We are
`
`persuaded that claims 3–10, 15–31, and 33 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 generic features of a
`
`15
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`computer that do not bring the challenged claims within § 101 patent
`
`eligibility. Pet. 49–82; Reply 6–19; ’126 Pet. 25–31; ’126 Reply 8–12.
`
`a. Technical Elements
`
`Petitioner argues that the challenged claims are unpatentable because
`
`they are directed to an abstract idea and any “additional features” fall into
`
`“at the very most two categories—field of use limitations and generic
`
`computer implementations.” Pet. 49–50; Reply 6. Patent Owner disagrees,
`
`arguing that the challenged claims are patentable because they “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.
`
`40 (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 the challenged claims, including the “data carrier,” “data
`
`supplier,” “payment validation system,” and “mobile communication
`
`device.” See Reply 6 (citing Ex. 1001, 4:4–13, 11:28–29, 12:29–32, 13:35–
`
`38, 16:46–50, 18:7–17). 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.” 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
`
`16
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`(“[l]ikewise data stores 136, 138 and 140 may comprise a single physical
`
`data store or may be distributed over a plurality of physical devices and may
`
`even be at physically remote locations from processors 128-134 and coupled
`
`to these processors via internet 142”), Fig. 6. 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. 53–55; Reply 7–10. 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 the challenged claims “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. 40. The challenged claims also
`
`recite 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
`
`17
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`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. See Content Extraction and
`
`Transmission LLC, 776 F.3d at 1347 (“The concept of data collection,
`
`recognition, and storage is undisputedly well-known. Indeed, humans have
`
`always performed these functions.”). This recitation of generic computer
`
`memories and data types, being used in the conventional manner, is
`
`insufficient to confer the specificity required to elevate the nature of the
`
`claim into a patent-eligible application. 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); Affinity Labs, No. 2015-2080, slip op. 10–11 (“The
`
`claims do not go beyond ‘stating [the relevant] functions in general terms,
`
`without limiting them to technical means for performing the functions that
`
`are arguably an advance over conventional computer and network
`
`technology.’”).
`
`18
`
`

`
`Case CBM2015-00126
`Case CBM2015-00130
`Patent 8,118,221 B2
`
`In addition, because the recited elements can be implemented on a
`
`general purpose computer, the challenged claims do not cover a “particular
`
`machine.” Pet. 75–76; 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 the challenged claims do not
`
`transform an article into a different state of thing. Pet. 75–76.
`
`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.
`
`b. DDR Holdings
`
`Relying on the Federal Circuit’s decision in DDR Holdings, Patent
`
`Owner asserts that the challenged claims are 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. 33 (quoting DDR Holdings, L