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
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00131
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Tel: 571-272-7822
`
`Paper 33
`Entered: November 10, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00131
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`CBM2015-00131
`Patent 8,061,598 B2
`
`A. Background
`
`INTRODUCTION
`
`Apple Inc. (“Petitioner”), filed a Petition to institute covered business
`
`method patent review of claims 3–6, 8–14, 16–30, and 32–41 of U.S. Patent
`
`No. 8,061,598 B2 (Ex. 1001, “the ’598 patent”) pursuant to § 18 of the
`
`Leahy-Smith America Invents Act (“AIA”). Paper 1 (“Pet.”).1 Smartflash
`
`LLC (“Patent Owner”) filed a Preliminary Response. Paper 6 (“Prelim.
`
`Resp.”). On November 16, 2015, we instituted a covered business method
`
`patent review (Paper 8, “Institution Decision” or “Inst. Dec.”) based upon
`
`Petitioner’s assertion that claims 3–6, 8–14, 16–25, 27–30, and 32–41 (“the
`
`challenged claims”) are directed to patent ineligible subject matter under 35
`
`U.S.C. § 101. Inst. Dec. 23. Because a final written decision determining
`
`claim 26 of the ’598 patent to be unpatentable under § 103 had already
`
`issued in CBM2014-00108, we declined to institute a review of claim 26
`
`under § 101 in this case. Id. at 5–7.
`
`Subsequent to institution, Patent Owner filed a Patent Owner
`
`Response (Paper 18, “PO Resp.”) and Petitioner filed a Reply (Paper 23,
`
`“Pet. Reply”) to Patent Owner’s Response.
`
`Patent Owner, with authorization, filed a Notice of Supplemental
`
`Authority. Paper 30 (“Notice”). Petitioner filed a Response to Patent
`
`Owner’s Notice. Paper 31 (“Notice Resp.”).
`
`We held a joint hearing of this this case and several other related cases
`
`on July 18, 2016. Paper 32 (“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.
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–07 (2011).
`
`2
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`CBM2015-00131
`Patent 8,061,598 B2
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`For the reasons that follow, we determine that Petitioner has shown by a
`
`preponderance of the evidence that claims 3–6, 8–14, 16–25, 27–30, and 32–
`
`41 of the ’598 patent are directed to patent ineligible subject matter under 35
`
`U.S.C. § 101.
`
`B. Related Matters
`
`The ’598 patent is the subject of the following district court cases:
`
`Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D. Tex. 2014);
`
`Smartflash LLC v. Samsung Electronics Co., Case No. 6:13-cv-448 (E.D.
`
`Tex. 2014); Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D.
`
`Tex. 2014); Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145 (E.D. Tex.
`
`2015). Paper 43, 4–5.
`
`We have issued three previous Final Written Decisions in reviews
`
`challenging the ’598 patent. In CBM2014-00108, we found claim 26
`
`unpatentable under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC, Case
`
`CBM2014-00108, (PTAB Sept. 25, 2015) (Paper 50). In CBM2014-00193,
`
`we found claim 7 unpatentable under 35 U.S.C. § 101. Samsung Electronics
`
`America, Inc. v. Smartflash LLC, Case CBM2014-00193, (March 30, 2016)
`
`(Paper 45). In CBM2015-00017, we found claims 1, 2, 15, and 31
`
`unpatentable under 35 U.S.C. § 101. Apple Inc. v. Smartflash LLC,
`
`CBM2015-00017, (March 30, 2016) (Paper 46).
`
`C. The ’598 Patent
`
`The ’598 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
`
`3
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`CBM2015-00131
`Patent 8,061,598 B2
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`proprietary data available over the internet without authorization. Id. at
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`1:29–55. The ’598 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
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`Id. at 1:59–2:11. This combination allows data owners to make their data
`
`available over the internet without fear of data pirates. 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 a data supplier. Id. The data on the portable storage
`
`device can be retrieved and output from a mobile device. Id. at 2:1–5. The
`
`’598 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 25:49–52 (“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 3–6, 8–14, 16–25, 27–30, and 32–
`
`41 of the ’598 patent. Inst. Dec. 23. Of the challenged claims, claims 21,
`
`27, 29, 35, 39, 40, and 41 are independent. Claims 3–6, 8–14 and 16–20
`
`depend from independent claim 1 (held unpatentable under § 101 in
`
`CBM2015-00017). Claims 22–25 depend from independent claim 21.
`
`Claim 28 depends from independent claim 27. Claim 30 depends from
`
`independent claim 29. Claims 32–34 depend, directly or indirectly, from
`
`independent claim 31 (held unpatentable under § 101 in CBM2015-00017).
`
`Claims 36–38 depend from independent claim 35. Independent claims 21
`
`and 35 are illustrative and recite the following:
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`4
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`CBM2015-00131
`Patent 8,061,598 B2
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`21. A portable data carrier comprising:
`
`use rule memory to store one or more use rules for a
`content data item;
`
`an interface for reading and writing the one or more use
`rules from and to the portable data carrier;
`
`a program store storing code implementable by a
`processor; and
`
`a processor coupled to [the] use rule memory, the
`interface and to the program store for implementing code in the
`program store,
`
`wherein the code comprises code for storing and
`accessing the one or more use rules in the use rule memory.
`
`Ex. 1001, 27:17–29.
`
`35. A method of controlling access to content data using a
`data carrier, the data carrier comprising:
`
`use rule memory to store one or more use rules for a
`content data item and use status data;
`
`the method comprising:
`
`receiving a data access request from a user for the
`content data item,
`
`reading the use status data and one or more use
`rules from the data carrier that pertain to use of the
`requested content data item;
`
`evaluating the use status data using the one or
`more use rules to determine whether access to the content
`data item is permitted; and
`
`enabling access to the content data item responsive
`to a determination that access to the content data item is
`permitted.
`
`Ex. 1001, 28:43–59.
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`5
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`CBM2015-00131
`Patent 8,061,598 B2
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`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 ’598 patent according to their ordinary and customary meaning in the
`
`context of the patent’s written description. See In re Translogic Tech., Inc.,
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`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 3–6, 8–14, 16–25, 27–30, and 32–41 as
`
`directed to patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 43–
`
`79. 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 P. J. Kelly in support of its Petition.2 Ex. 1019. Patent
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`Owner argues that 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.
`
`
`2 In its Response, Patent Owner argues that this declaration should be given
`little or no weight. PO Resp. 5–15. Because Patent Owner has filed a
`Motion to Exclude (Paper 26) 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.
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`6
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`CBM2015-00131
`Patent 8,061,598 B2
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`1. Abstract Idea
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`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 “portable
`
`data carrier” (claims 3–6, 8–14, 16–25, 27–30) or a “data access terminal”
`
`(claims 39, 40, and 41)—and a “process”—i.e., a “method” (claims 32–
`
`38)—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
`
`from those that claim patent-eligible applications of these concepts.” Alice,
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`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
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`patent-eligible inventions.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
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`7
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`CBM2015-00131
`Patent 8,061,598 B2
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`F.3d 1306, 1332 (Fed. Cir. 2015) (emphasis added); accord id. at 1333–34
`
`(“It is a building block, a basic conceptual framework for organizing
`
`information . . . .” (emphasis added)). This is similar to the Supreme Court’s
`
`formulation in Bilski v. Kappos, 561 U.S. 593, 611 (2010) (emphasis added),
`
`noting that the concept of risk hedging is “a fundamental economic practice
`
`long prevalent in our system of commerce.” See also buySAFE, Inc. v.
`
`Google, Inc., 765 F.3d 1350, 1353–54 (Fed. Cir. 2014) (stating that patent
`
`claims related to “long-familiar commercial transactions” and relationships
`
`(i.e., business methods), no matter how “narrow” or “particular,” are
`
`directed to abstract ideas as a matter of law). As a further example, the
`
`“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/or controlling access to content.” Pet. 45.
`
`Specifically, Petitioner contends that “the challenged claims are drawn to the
`
`concept of controlling access in that they recite steps to and ‘code to’
`
`evaluate rules to determine whether access is permitted.” Id. at 48.
`
`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 21 recites “code for
`
`storing and accessing the one or more use rules in the use rule memory.”
`
`Claim 35 recites “evaluating the use status data using the one or more use
`
`rules to determine whether access to the content data item is permitted” and
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`8
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`CBM2015-00131
`Patent 8,061,598 B2
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`“enabling access to the content data item responsive to a determination that
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`access to the content data item is permitted.”
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`As discussed above, the ’598 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
`
`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 that
`
`data by internet users who may not even realize that it is pirated. Id. The
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`’598 patent proposes to solve this problem by restricting access to data on a
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`portable data carrier based upon payment validation. Id. at 1:59–2:4. The
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`’598 patent makes clear that the crux of the claimed subject matter is
`
`restricting access to stored data based on supplier-defined access rules and
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`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 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 3–6, 8–14, 16, 17, 21–25, and 39–41
`
`are directed to “machines, not abstract ideas” (PO Resp. 18, 19), that claims
`
`18–20, 29, and 30 are “also a physical device” (id. at 19) and that method
`
`claims 32–38 “recite utilization of specific hardware . . . such that those
`
`claims are not abstract ideas” (id.). Patent Owner, however, cites no
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`9
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`CBM2015-00131
`Patent 8,061,598 B2
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`controlling authority to support the proposition that subject matter is patent-
`
`eligible as long as it is directed to “machines with specialized physical
`
`elements” or “real-world useful processes.” PO Resp. 22. 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. 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. 20–21. 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, Paper 7 (Oct. 19, 2015),
`
`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,
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`10
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`CBM2015-00131
`Patent 8,061,598 B2
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`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. Id.
`
`at 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 “content data items” (e.g., claims
`
`21, 26, 29). Method claims 31 and 35 recite “reading the use status data and
`
`one or more use rules . . . that pertain to use of the requested content data
`
`item,” but “reading” does not imply “correlating, by the computer system
`
`using a non-exhaustive, near neighbor search.” With respect to CBM2015-
`
`00147, Patent Owner mischaracterizes the Institution Decision. PO Resp.
`
`21–22. 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, Paper 14 (Nov. 30, 2015), 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
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`11
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`Patent 8,061,598 B2
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`claims do not purport to be an improvement to the way computers operate.
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`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 for storing,”
`
`“code to provide access,” “code to provide payment data,” “code for
`
`encrypting,”—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 3–6, 8–14, 16–25, 27–30, and 32–41 of
`
`the ’598 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
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`12
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`of a system claim to be “generating tasks [based on] rules . . . to be
`
`completed upon the occurrence of an event”).
`
`2. Inventive Concept
`
`“A claim that recites an abstract idea must include ‘additional
`
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`
`monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo,
`
`132 S. Ct. at 1297). “This requires more than simply stating an abstract idea
`
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`
`the prohibition on patenting an ineligible concept cannot be circumvented by
`
`limiting the use of an ineligible concept to a particular technological
`
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`
`mere recitation of generic computer components performing conventional
`
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`
`computer will include a ‘communications controller’ and ‘data storage unit’
`
`capable of performing the basic calculation, storage, and transmission
`
`functions required by the method claims.”).
`
`Petitioner argues that “the [challenged 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 3–6, 8–14, 16–25, 27–30, and 32–41
`
`of the ’598 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
`
`13
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`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. 53–73.
`
`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’ added.” Pet. 53 (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 idea.” PO Resp. 31 (quoting Ex. 2049, 19). We agree
`
`with Petitioner for the following reasons.
`
`The ’598 patent treats as well-known all potentially technical aspects
`
`of the challenged claims, which simply require generic computer
`
`components (e.g., interfaces, memory, program store, and processor). See
`
`Pet. Reply 6–10, 15 (citing Ex. 1001, 4:4–13, 11:28–29, 12:29–32, 16:46–
`
`50, 18:7–17). With respect to the “portable data carrier” recited in claim 21,
`
`for example, the Specification states it may be a generic device such as “a
`
`standard smart card.” Ex. 1001, 11:27–29; 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 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.
`
`14
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`Patent 8,061,598 B2
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`Further, the claimed computer code performs generic computer
`
`functions, such as storing, retrieving, receiving, reading, evaluating, and
`
`enabling access to. See Pet. 56–59. The recitation of these generic
`
`computer functions is insufficient to confer specificity. See Content
`
`Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776
`
`F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data collection,
`
`recognition, and storage is undisputedly well-known. Indeed, humans have
`
`always performed these functions.”).
`
`Moreover, we are not persuaded that claims 3–6, 8–14, 16–25, 27–30,
`
`and 32–41 “recite specific ways of using distinct memories, data types, and
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`use rules that amount to significantly more than” paying for and/or
`
`controlling access to content. See PO Resp. 31 (quoting Ex. 2049, 19). The
`
`challenged claims generically recite several memories, including “use rule
`
`memory,” “a program store,” “memory,” and “content data memory,” and
`
`generically recite several data types, including “data,” “content data item,”
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`“use rules,” “code,” “payment data,” and “use status data.” We are not
`
`persuaded that the recitation of these memories and data types, by itself,
`
`amounts to significantly more than the underlying abstract idea. Patent
`
`Owner does not point to any inventive concept in the ’598 patent related to
`
`the way these memories or data types are constructed or used. In fact, the
`
`’598 patent simply discloses these memories and data types with no
`
`description of the underlying implementation or programming. 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,
`
`15
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`Patent 8,061,598 B2
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`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.’”).
`
`In addition, because the recited elements can be implemented on a
`
`general purpose computer, the challenged claims do not cover a “particular
`
`machine.” Pet. 78; 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 or thing. Pet. 78–79.
`
`Thus, we determine, the potentially technical elements of the
`
`challenged claims 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
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`16
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`Patent 8,061,598 B2
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`of computer networks.’” PO Resp. 1–2, 26 (quoting DDR Holdings, LLC v.
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`Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). Patent Owner
`
`contends that
`
`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
`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, there was no mechanism to write
`partial use status data to the DVD when only part of the DVD
`had been accessed (e.g., to track whether a renter had “finished
`with” the DVD yet).
`
`Id. at 17–18.
`
`Petitioner responds that the challenged claims are distinguishable
`
`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
`
`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 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
`
`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 still
`
`17
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`CBM2015-00131
`Patent 8,061,598 B2
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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
`
`“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
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`(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 that the challenged claims are distinguishable from the
`
`claims at issue in DDR Holdings. As an initial matter, we are not persuaded
`
`by Patent Owner’s argument that the challenged claims 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), and “address the technological problem created by the nature of digital
`
`content and the Internet” (id. at 27). Data piracy exists in contexts other
`
`than the Internet. See Pet. Reply 13–14 (identifying other contexts in which
`
`data piracy is a problem). For example, data piracy existed in the contexts
`
`of compact discs, the pay TV industry, software data, and DVDs. Id. at 14
`
`(citing Ex. 1019 ¶ 76; 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”); Ex. 1015, 1:13–23. Further, whatever the
`
`problem, the solution provided by the challenged claims is not rooted in
`
`18
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`Patent 8,061,598 B2
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`specific computer technology, but is based on controlling access based on
`
`payment or rules. See Pet. Reply 16 (citing Ultramercial, 772 F.3d at 712);
`
`id. at 13–14 (citing Ex. 1019 ¶¶ 48–52, 76).
`
`Even accepting Patent Owner’s assertion that the challenged claims
`
`address data piracy on the Inte
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