CBM2017-00002
`Patent No.9,203,870
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`FACEBOOK, INC. and INSTAGRAM, LLC,
`Petitioner,
`
`v.
`SKKY, LLC,
`Patent Owner.
`
`Case CBM2017-00002
`Patent 9,203,870 B2
`
`
`
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`37 C.F.R. § 42.207
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`Table of Contents
`
`CBM2017-00002
`Patent No.9,203,870
`
`I. Summary of Preliminary Response ....................................................................... 1
`II. Factual Background of the ’870 Patent ................................................................. 1
`III. This Board should reject the Petition on its face because the ’870 patent is
`not a CBM patent ................................................................................................... 5
`a. This Board should only consider remaining claims 8 and 10-14 in the
`’870 patent for CBM review. ............................................................................ 5
`b. Claim 8 is not subject to CBM review because it is not directed to a
`financial product or service .............................................................................. 6
`i. Claim 8 is not directed to a financial product or service because it does not
`specifically disclose how money is used or handled ............................................ 6
`ii. Claim 8’s copyright limitation does not render the claim CBM eligible
`because copyright ownership is not specific to the financial sector. ................... 8
`c. Claims 10 and 11 are not subject to CBM review because the
`“tracking” limitation is not limited to determining royalty payments. .......... 15
`d. Claim 14 is not subject to CBM review because it is not directed to a
`financial product or service ............................................................................ 17
`e. Claims 8 and 10-14 are not subject to CBM review because they claim
`technological inventions ................................................................................. 18
`IV. Claim Construction ............................................................................................. 25
`V. Petitioners Have Not Proven That One Or More Claims Of The ’870
`Patent Are More Likely Than Not Unpatentable Under 35 U.S.C. § 101........... 26
`a. An inventive concept or transformation of building blocks of human
`ingenuity is patent eligible under Section 101. .............................................. 26
`b. A solution to a problem necessarily rooted in computer technology
`constitutes an inventive concept under Section 101. ...................................... 27
`c. The ’870 patent is patent eligible because it is a solution to a problem
`necessarily rooted in computer technology. ................................................... 28
`VI. Petitioners Have Not Proven That One Or More Claims Of The ’870
`Patent Are More Likely Than Not Unpatentable Under 35 U.S.C. § 112........... 36
`a. The ’870 patent complies with the “regards as” clause .................................. 37
`b. The ’870 patent complies with the written description requirement............... 43
`
`
`
`i
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`

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`CBM2017-00002
`Patent No.9,203,870
`VII. Conclusion ......................................................................................................... 49
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`
`ii
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`

`
`TABLE OF AUTHORITIES
`
`
`
`CBM2017-00002
`Patent No.9,203,870
`
`Page(s)
`
`Cases
`Alcon Research Ltd. v. Barr Labs., Inc.,
`745 F.3d 1180 (Fed. Cir. 2014) .......................................................................... 44
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347, 2354 (2014) .............................................................................. 27
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) ...................................................................... 27, 31, 34, 36
`
`Allen Eng’g Corp. v. Bartell Indus., Inc.,
`299 F.3d 1336 (Fed. Cir. 2002) .................................................................... 39, 40
`
`Ancora Techs. v. Apple, Inc.,
`744 F.3d 732 (Fed. Cir. 2014) .......................................................... 38, 39, 40, 41
`
`Apple, Inc. v. ContentGuard Holdings, Inc.,
`CBM2015-00046, Paper 12 (PTAB June 3, 2015) ............................................. 24
`
`Ariad Pharms., Inc. v. Eli Lilly & Co.,
`598 F.3d 1336 (Fed. Cir. 2010) .......................................................................... 44
`
`Ass’n for Molecular Pathology v. Myriad Genetics, Inc.,
`133 S. Ct. 2107 (2012) ........................................................................................ 26
`
`Bamberg v. Dalvey,
`815 F.3d 793 (Fed. Cir 2016) ............................................................................. 48
`
`BASCOM Global Internet Servs. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. June 27, 2016) .......................................... 32, 33, 34, 35
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ............................................................................................ 32
`
`Boston Sci. Corp. v. Johnson & Johnson,
`647 F.3d 1333 (Fed. Cir. 2011) .......................................................................... 44
`
`Community for Creative Non-Violence v. Reid,
`490 U.S. 730 (1989) ........................................................................................ 9, 15
`
`
`
`iii
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`

`
`CBM2017-00002
`Patent No.9,203,870
`
`CoreLogic,
`CBM2016-00018, Paper 9 .................................................................................. 12
`
`CoreLogic, Inc. v. Boundary Solutions, Inc.,
`CBM2016-00018 (PTAB May 24, 2016) ........................................................... 12
`
`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014) .......................................................................... 28
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ...................................................................................... 27, 29
`
`Emnos USA Corp. v. Dunnhumby Ltd.,
`CBM2015-00116, Paper 8 (PTAB Nov. 10, 2015) ............................................ 24
`
`Enfish, LLC v. Microsoft Corp.,
`822 F.3d 1327 (Fed. Cir. 2016) .............................................................. 28, 29, 30
`
`Enzo Biochem, Inc. v. Gen-Probe Inc.,
`323 F.3d 956 (Fed. Cir. 2002) ............................................................................ 45
`
`Experian Mktg. Sols., Inc. v. RPost Commc’ns Ltd.,
`CBM2014-00010, Paper 20 (PTAB Apr. 22, 2014) ........................................... 24
`
`Facebook, Inc. v. Skky, LLC,
`CBM2016-00091, Paper 7 (PTAB Nov. 23, 2016) .............................. 5, 6, 11, 14
`
`Google Inc. v. At Home Bondholders’ Liquidating Trust,
`CBM2016-0036, Paper 12 (PTAB Aug. 22, 2016) ................................ 19, 20, 24
`
`Google Inc. v. SimpleAir, Inc.,
`CBM2015-00019, Paper 11 (PTAB May 19, 2014) ............................................. 5
`
`Great West Cas. Co. v. Intellectual Ventures II LLC,
`CBM2015-00171, Paper 10 (PTAB Feb. 9, 2016) ...................5, 9, 11, 14, 16, 18
`
`ICU Med., Inc. v. Alaris Med. Sys.,
`558 F.3d 1368 (Fed. Cir. 2009) .................................................................... 46, 47
`
`In re Conley,
`490 F.2d 972 (CCPA 1974) ................................................................................ 38
`
`
`
`iv
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`

`
`CBM2017-00002
`Patent No.9,203,870
`
`In re Cormany,
`476 F.2d 998 (CCPA 1973) ................................................................................ 38
`
`In re Prater,
`415 F.2d 1392 (CCPA 1969) .............................................................................. 38
`
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343 (Fed. Cir. 2015) .......................................................................... 28
`
`J.P. Morgan Chase & Co. v. Intellectual Ventures II,
`CBM2014-00160, Paper 11 (PTAB Jan. 29, 2015) .............................................. 6
`
`J.P Morgan Chase,
`CBM 2014-00160 ......................................................................................... 12, 17
`
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ...................................................................................... 26, 29
`
`LizardTech, Inc. v. Earth Resource Mapping, Inc.,
`424 F.3d 1336 (Fed. Cir. 2005) .......................................................................... 45
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ................................................... 26, 27, 29, 31, 32, 34, 35
`
`McRo, Inc. v. Bandai Namco Games Am. Inc.,
`2016 U.S. App. LEXIS 16703 (Sept. 13, 2016) ........................................... 29, 36
`
`Old Republic Gen. Ins. Group, Inc.,
`CBM2015-00184, Paper 7 (PTAB Apr. 15, 2016) ....................................... 19, 24
`
`Par Pharm., Inc. v. Jazz Pharms., Inc.,
`CBM2014-00149, Paper 12 (PTAB Jan. 13, 2015) ...................................... 12, 13
`
`Park v. Booth,
`102 U.S. 96 (1880) ........................................................................................ 26, 30
`
`PNC Financial Servs. Group, Inc. v. Intellectual Ventures I, LLC,
`CBM2014-00032, Paper 13 (PTAB May 22, 2014) ............................................. 7
`
`Qualtrics, LLC v. OpinionLab, Inc.,
`CBM2015-00164, Paper 8 (PTAB Feb. 3, 2016) ......................... 7, 14, 15, 16, 18
`
`
`
`v
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`

`
`CBM2017-00002
`Patent No.9,203,870
`
`Salesforce.com, Inc. v. Application in Internet Time LLC,
`CBM 2014-00162 ............................................................................................... 11
`
`ServiceNow Inc. v. Hewlett-Packard, Co.,
`CBM2015-00108, paper 10 (PTAB Oct. 7, 2015) ....................................... 13, 15
`
`Solomon v. Kimberly-Clark Corp.,
`216 F.3d 1372 (Fed. Cir. 2000) .......................................................................... 38
`
`Streck, Inc. v. Research& Disagnostic Sys.,
`665 F.3d 1269 (Fed. Cir. 2012) .......................................................................... 44
`
`Thorner v. Sony Computer Ent. Am. LLC,
`669 F.3d 1362 (Fed. Cir. 2012) .......................................................................... 46
`
`TIP Sys., LLC v. Phillips & Brooks/Gladwin, Inc.,
`529 F.3d 1364 (Fed. Cir. 2008) .......................................................................... 14
`
`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (Fed. Cir. 2014) ............................................................................ 28
`
`Unwired Planet, LLC v. Google Inc.,
`841 F.3d 1376, 2016 U.S. App. LEXIS 20764 (Fed. Cir. 2016) ................ 6, 9, 17
`
`Statutes
`
`17 U.S.C. § 102 .......................................................................................................... 9
`
`35 U.S.C. § 101 ....................................... 1, 26, 27, 28, 29, 30, 32, 35, 36, 37, 49, 50
`
`35 U.S.C. § 103 ............................................................................................ 19, 33, 35
`
`35 U.S.C. § 112 ............................................................................1, 37, 38, 43, 49, 50
`
`35 U.S.C. § 112(a) ............................................................................................. 37, 43
`
`35 U.S.C. § 112(b) ....................................................................................... 37, 38, 43
`
`35 U.S.C. § 324(a) ............................................................................................. 37, 48
`
`17 U.S. Code § 106 .................................................................................................. 10
`
`
`
`vi
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`

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`CBM2017-00002
`Patent No.9,203,870
`
`Other Authorities
`
`37 C.F.R. § 42.207 ..................................................................................................... 5
`
`37 C.F.R. § 42.300(b) .............................................................................................. 26
`
`37 C.F.R. § 42.301 ..................................................................................................... 6
`
`37 C.F.R. § 42.301(a) ............................................................................................... 19
`
`37 C.F.R. § 42.301(b) .............................................................................................. 19
`
`157 Cong. Rec. S5441 (Sept. 8, 2011) ....................................................................... 7
`
`77 Fed. Reg. 48,7343 (Aug. 14, 2012) .................................................................... 13
`
`77 Fed. Reg. 48,735 (Aug. 14, 2012)....................................................................... 13
`
`A.I.A § 18(d)(1) ............................................................................................. 6, 19, 49
`
`
`
`vii
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`

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`CBM2017-00002
`Patent No.9,203,870
`
`
`Exhibit Title
`2001
`Statutory Disclaimer Under 35 U.S.C. § 253(a) and 37 C.F.R. §1.321(a)
`
`Exhibit List
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`
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`viii
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`

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`CBM2017-00002
`Patent No.9,203,870
`
`I. Summary of Preliminary Response
`
`On June 15, 2016, Petitioners Facebook, Inc. and Instagram, LLC submitted
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`a Petition requesting that the Board conduct Covered Business Method (CBM)
`
`review of U.S. Patent No. 9,203,870 (’870 patent). Institution of CBM review
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`should be denied for at least three reasons:
`
`• The ’870 patent does not claim a method or corresponding apparatus for
`
`performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service, and thus
`
`does not qualify for CBM review;
`
`• Petitioners have not demonstrated that the claims of the ’870 patent are more
`
`likely than not unpatentable under 35 U.S.C. § 101; and
`
`• Petitioners have not demonstrated that the claims of the ’870 patent are more
`
`likely than not unpatentable under 35 U.S.C. § 112.
`
`For these reasons, discussed in more detail below, the Board should decline to
`
`institute CBM proceedings for the ’870 patent and reject the Petition.
`
`II. Factual Background of the ’870 Patent
`
`The ’870 patent, having a priority date of June 26, 2001, generally claims an
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`improved method for wireless delivery of digital audio and/or visual media files
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`from one or more servers to an electronic device. Ex. 1001 at 1. The ’870 patent has
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`two independent claims, claims 1 and 8. Id. at 46-47. On January 19, 2017, Patent
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`1
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`

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`CBM2017-00002
`Patent No.9,203,870
`Owner disclaimed 1) independent claim 1 and its independent claims 2-7; and 2)
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`dependent claim 9. Ex. 2001. The remaining independent claim 8 recites:
`
`A method for distributing electronic content over a
`cellular network to a user operating a cellular phone, the
`method being executable by a computer system that
`includes server hardware and a database, the method
`comprising:
`providing for the transmission to the cellular phone by
`orthogonal
`frequency-division multiplex
`(OFDM)
`modulation of a database of electronically accessible data
`files, each data file being subject to a copyright owner;
`receiving, by the computer system, a selection from the
`cellular phone corresponding to at least one of the data
`files;
`providing for the transmission of, by the computer system
`and in response to the received selection, a portion of the
`selected data file to the cellular phone electronic device;
`receiving, by the computer system, a request for the data
`file for which the portion was provided to the cellular
`phone electronic device; and
`providing for the transmitting, by the computer system, of
`the requested data file to the cellular phone, said cellular
`phone including a digital signal processor configured to
`receive the data file over a cellular network by orthogonal
`frequency-division multiplex (OFDM) modulation.
`
`Ex. 1001 at 47 (33:40-34:18).
`
`
`
`2
`
`

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`CBM2017-00002
`Patent No.9,203,870
`As described by claim 8, the claimed method requires a cellular phone
`
`
`
`containing at least one digital signal processor and must be configured to receive
`
`and process files transmitted by orthogonal frequency-division multiplex
`
`modulation (“OFDM”). Id. In other words, the claimed method relies on a novel,
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`non-obvious cellular phone created by the inventors of the ’870 patent over 15 years
`
`ago.
`
`
`
`The ’870 patent was invented by two of Skky LLC’s cofounders, Mr. John
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`Mikkelsen and Dr. Robert Freidson, and is a continuation of U.S. Patent No.
`
`9,037,502 (’502 patent), which is a continuation of U.S. Patent No. 7,548,875 (’875
`
`patent). Mr. Mikkelsen and Dr. Freidson worked together in the early 2000s to
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`develop and patent a means to transmit high quality audio and/or visual files to
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`mobile devices. The two inventors were uniquely positioned to design the invention
`
`described in the ’870, ’502, and ’875 patents.
`
`
`
`Mr. Mikkelsen’s background is in the entertainment industry. As part of his
`
`work, he created high quality sound clips that sounded like songs played on the
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`radio. Mr. Mikkelsen then used those sound clips to replace the normal alerts,
`
`consisting of simple chimes and beeps, on his computer. As the age of cellular
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`phones was just dawning in the late 1990s, Mr. Mikkelsen believed that cellular
`
`phone users would want to wirelessly receive and play high quality audio and/or
`
`visual files, such as his sound clips, on their cellular phones.
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`
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`3
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`

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`CBM2017-00002
`Patent No.9,203,870
`The missing piece to Mr. Mikkelsen’s idea came from his introduction to Dr.
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`
`
`Freidson. Dr. Freidson has a Ph.D. in computer science and mathematics from
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`Steklov Mathematical Institute in St. Petersburg, Russia. He is also the inventor on
`
`several patents related to telecommunications industry. Dr. Freidson is currently a
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`mathematics professor at St. Petersburg Electrical Engineering University and
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`serves as the chairman of the Russian National Research Center on computer
`
`science. Dr. Freidson possesses extensive experience in specialized wireless
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`transmission and telecommunications. Dr. Freidson provided the technical expertise
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`relating to wireless delivery to cellular devices and the playback of high quality
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`audio and visual files on those devices.
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`Together, the two inventors devised an invention capable of wirelessly
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`receiving and then playing back high quality audio and/or visual files, such as Mr.
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`Mikkelsen’s sound clips. They did so in the early 2000s, long before smartphones
`
`existed, let alone the iPhones and Galaxies of today. Mr. Mikkelsen and Dr.
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`Freidson then applied for the ’875 patent, encompassing their invention.
`
`The ’875 patent issued on June 16, 2009 after a lengthy prosecution process.
`
`The ’870 patent was filed in 2014, with a priority date reaching back to June 27,
`
`2001. Documentation from the prosecution of the ’875 patent was submitted during
`
`the prosecution of the ’870 patent, including a declaration from Dr. Freidson
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`describing his efforts in creating a prototype device encompassing the invention of
`
`
`
`4
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`

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`CBM2017-00002
`Patent No.9,203,870
`the ’875 patent. Ex. 1079 at 9. The ’870 patent issued on December 1, 2015.
`
`Subsequently, on January 19, 2017, Patent Owner filed a disclaimer, disclaiming
`
`claims 1-7 and 9 of the ’870 patent. Independent claim 8 and dependent claims 10-
`
`14 remain at issue here. Ex. 2001.
`
`III. This Board should reject the Petition on its face because the ’870 patent
`is not a CBM patent.
`a. This Board should only consider remaining claims 8 and 10-14 in
`the ’870 patent for CBM review.
`
`When a patent owner files a statutory disclaimer with its preliminary
`
`response, “no post-grant review will be instituted based on disclaimed claims.” 37
`
`C.F.R. § 42.207. See also Google Inc. v. SimpleAir, Inc., CBM2015-00019, Paper
`
`15 at 5 (PTAB Aug. 19, 2015) (“Our rules permit a patent owner to file a statutory
`
`disclaimer with its preliminary response and no post-grant review will be instituted
`
`based on the disclaimed claims.”). As such, “the decision whether to institute a
`
`covered business method patent review is based on the ‘claims of the patent as they
`
`exist at the time of the decision,’ not as they may have existed at some previous
`
`time.” Id. at 5. For the purpose of determining whether or not to instate CBM
`
`proceedings, disclaimed claims are treated “as never having existed.” Great West
`
`Cas. Co. v. Intellectual Ventures II LLC, CBM2015-00171, Paper 10 at 7 (PTAB
`
`Feb. 9, 2016). The Board correctly followed this approach in denying institution of
`
`a related patent. See Facebook, Inc. v. Skky, LLC, CBM2016-00091, Paper 7 at 9
`
`
`
`5
`
`

`
`CBM2017-00002
`Patent No.9,203,870
`(PTAB Nov. 23, 2016) (“This panel treats the disclaimed claims as if they never
`
`existed.”). The Board should do the same here.
`
`With claims 1-7 and 9 disclaimed, only Petitioners’ arguments relating to
`
`independent claim 8 and its dependent claims 10-14 remain. Ex. 2001. Patent
`
`Owner addresses these remaining arguments in turn.
`
`b. Claim 8 is not subject to CBM review because it is not directed to a
`financial product or service.
`
`i. Claim 8 is not directed to a financial product or service
`because it does not specifically disclose how money is used or
`handled.
`
`To qualify for CBM review, a patent must “claim[] a method or
`
`corresponding apparatus for performing data processing or other operations used in
`
`the practice, administration, or management of a financial product or service,” or is
`
`a “patent[] for technological inventions.” A.I.A. § 18(d)(1); 37 C.F.R. § 42.301. The
`
`’870 patent – specifically, claims 8 and 10-14 – contains no such claims, and thus is
`
`not eligible for CBM review. See J.P. Morgan Chase & Co. v. Intellectual Ventures
`
`II, CBM2014-00160, Paper 11 at 5 (PTAB Jan. 29, 2015) (“the Board may institute
`
`a transitional proceeding only for a patent that is a CBM patent”); Facebook,
`
`CBM2016-00091, Paper 7 at 9 (“A patent is eligible for review if it has at least one
`
`claim directed to a covered business method.”).
`
`A claim is directed to a financial product or service if the claimed activities
`
`are “financial in nature.” Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 2016
`
`
`
`6
`
`

`
`CBM2017-00002
`Patent No.9,203,870
`U.S. App. LEXIS 20764, *9 (Fed. Cir. 2016). An activity is financial in nature if it
`
`“relate[s] to how money is used or handled.” Great West Cas., CBM 2015-00171,
`
`Paper 10 at 10-11. CBM review “was not meant to be applied ‘to technologies
`
`common in business environments across sectors and that have no particular
`
`relation to the financial services sector, such as computers, communications
`
`networks, and business software.’” Qualtrics, LLC v. OpinionLab, Inc., CBM2015-
`
`00164, Paper 8 at 5 (PTAB Feb. 3, 2016) (citing 157 Cong. Rec. S5441 (Sept. 8,
`
`2011) (statement of Sen. Leahy)). As such, claims that are “general utility not
`
`specific to any application” do not subject the patent to CBM review. See, e.g., PNC
`
`Financial Servs. Group, Inc. v. Intellectual Ventures I, LLC, CBM2014-00032,
`
`Paper 13 at 10 (PTAB May 22, 2014).
`
`Claim 8 is not financial in nature. Claim 8 recites:
`
`A method for distributing electronic content over a
`cellular network to a user operating a cellular phone, the
`method being executable by a computer system that
`includes server hardware and a database, the method
`comprising:
`providing for the transmission to the cellular phone by
`orthogonal
`frequency-division multiplex
`(OFDM)
`modulation of a database of electronically accessible data
`files, each data file being subject to a copyright owner;
`
`
`
`7
`
`

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`CBM2017-00002
`Patent No.9,203,870
`receiving, by the computer system, a selection from the
`cellular phone corresponding to at least one of the data
`files;
`providing for the transmission of, by the computer system
`and in response to the received selection, a portion of the
`selected data file to the cellular phone electronic device;
`receiving, by the computer system, a request for the data
`file for which the portion was provided to the cellular
`phone electronic device; and
`providing for the transmitting, by the computer system, of
`the requested data file to the cellular phone, said cellular
`phone including a digital signal processor configured to
`receive the data file over a cellular network by orthogonal
`frequency-division multiplex (OFDM) modulation.
`
`Ex. 1001 at 47 (33:40-34:18). In sum, claim 8 discloses a method for distributing
`
`electronic content over a cellular network, that electronic content subject to
`
`copyright ownership. On its face, nothing in claim 8 relates to how money is used
`
`or handled. Petitioners do not, and cannot, dispute this point. A method to distribute
`
`copyrighted electronic content is not related to the financial services sector.
`
`ii. Claim 8’s copyright limitation does not render the claim
`CBM eligible because copyright ownership is not specific to
`the financial sector.
`
`
`
`Petitioners’ reliance on claim 8’s copyright limitation to establish claim 8 as
`
`“financial in nature, incidental to a financial activity or complementary to a
`
`
`
`8
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`

`
`CBM2017-00002
`Patent No.9,203,870
`financial activity” is misplaced. Pet. at 7-8. First, activities that are “incidental to”
`
`or “complementary to” financial activities are insufficient to establish CBM
`
`eligibility. Unwired Planet, 2016 U.S. App. LEXIS 20764 at *8 (“It is not enough
`
`that a sale has occurred or may occur, or even that the specification speculates such
`
`a potential sale might occur.”). As such, claims are not “finance-related on their
`
`face” when the “only potential commerce related example” required “several leaps
`
`of logic in order to relate it to how money is used or handled.” Great West Cas.,
`
`CBM 2015-00171, Paper 10 at 10-11.
`
`Petitioners’ attempt to connect copyright ownership to “how money is used
`
`or handled” requires several unfounded leaps of logic. Copyright ownership arises
`
`“in original works of authorship fixed in any tangible medium of expression, now
`
`known or later developed, from which they can be perceived, reproduced, or
`
`otherwise communicated, either directly or with the aid of a machine or device.” 17
`
`U.S.C. § 102. Copyright arises from the simple creation of a work automatically—
`
`the author is not required to pay a fee to obtain the copyright or exact payment from
`
`the work. For example, when an individual takes a photo with a cellular phone, that
`
`individual automatically has copyright ownership over the photo. See, e.g.,
`
`Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737 (1989) (“As a
`
`general rule, the author is the party who actually creates the work, that is, the person
`
`
`
`9
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`who translates an idea into a fixed, tangible expression entitled to copyright
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`protection.”).
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`Petitioners argue that “the underlying purpose of copyright is to create
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`financial incentives for the creation of original works.” Pet. at 8. This broad
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`interpretation of the purpose and effect of copyright is misplaced. Section 106 of the
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`Copyright Act grants exclusive rights to authors to “do and authorize” a broad range
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`of non-financial activities such as:
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`• Reproducing the copyrighted work in copies;
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`• Preparing derivative works based upon the copyrighted work; and
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`• Performing or displaying the copyrighted work publicly, or to transmit
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`the work publically by means of digital audio transmission.
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`17 U.S.C. § 106. When a person uploads her vacation photos to her own blog (or,
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`indeed, Facebook’s website), she has a copyright ownership in the photos that
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`existed from the point they were taken. The average person, however, does not
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`charge a fee to view those photos. Rather, the photographer’s friends, family, and
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`the general public browsing the Internet are able to view the photos at no cost. In
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`other words, the photographer may choose to exercise her copyright for artistic or
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`personal reasons, entirely independent of any financial purpose. While it is true that
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`some artists may collect a fee to share their work, limiting the concept of copyright
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`ownership to that context paints with too broad a brush. Connecting copyright
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`10
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`ownership—the mere act of taking a photo—directly to a financial purpose in all
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`cases does not follow. That the claims of a patent could potentially be used for a
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`financial purpose is insufficient to support CBM institution. Facebook, CBM2016-
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`00091, Paper 7 at 13-14 (“It is not sufficient for CBM eligibility that the
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`Specification also indicates that ‘in addition’ to these applications, the tracking
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`feature also may be used in the calculation of a royalty fee.”); Great West Cas.,
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`CBM2015-00171, Paper 10 at 12 (because financial related examples in
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`specification were “merely non-limiting examples of otherwise general content”
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`institution of CBM review was inappropriate).
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`Second, Petitioners’ argument that examples in the specification render claim
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`8 as having a financial purpose is insufficient to support institution of CBM review.
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`Salesforce.com, Inc. v. Application in Internet Time LLC, CBM 2014-00162, Paper
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`11 at 10 (PTAB Feb. 2, 2015) (“Petitioner’s argument fails to address the language
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`of the claims, which is the focus of our inquiry . . . Petitioner’s contentions based on
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`the written description alone do not show that the ’111 patent claims a method or
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`apparatus ‘for performing data processing or other operations used in the practice,
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`administration, or management of a financial product or service’ or claims an
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`activity that is ‘financial in nature, incidental to a financial activity or
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`complementary to a financial activity.’”); Great West Cas., CBM 2015-00171,
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`Paper 10 at 13 (“These disclosures, however, are but a small portion of the
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`11
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`Specification, and in any case, Petitioner has not shown how they inform our
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`analysis of a specific claim limitation of claims 11-20, as is required to make a
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`determination that the ’177 patent is a covered business method patent.”). This is
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`consistent with the Board’s prior determinations. For example, in CoreLogic, the
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`petitioner attempted to rely on portions of the specification to support its CBM
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`petition. CoreLogic, Inc. v. Boundary Solutions, Inc., CBM2016-00018, Paper 9 at
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`7 (PTAB May 24, 2016). The Board denied institution because, by relying only on
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`the specification and ignoring the disclosure of the claims themselves, the petitioner
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`at best “established that the claimed methods could be used to generate revenue in a
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`number of ways, even though the language of the claims does not require any
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`exchange of money or other financially related step.” Id. at 10. Thus it is the claims
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`that determine eligibility, not examples plucked from the specification. Other panels
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`have consistently come to this same conclusion, holding that the focus is on the
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`claims to reach an institution decision. J.P Morgan Chase, CBM 2014-00160, Paper
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`11 at 11 (“for purposes of determining whether a patent is eligible for review as a
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`CBM patent, we focus on the claims”); Par Pharm., Inc. v. Jazz Pharms., Inc.,
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`CBM2014-00149, Paper 12 at 9 (PTAB Jan. 13, 2015) (“In making this
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`determination, our focus is firmly on the claims.”).
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`The Board’s focus on the claims, not the specification, is rooted in the
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`legislative history of the America Invents Act. Examination of the proceedings
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`12
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`leading to the codification of the AIA “explains that the definition of covered
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`business method patent was drafted to encompass patents claiming activities that
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`are financial in nature.” ServiceNow Inc. v. Hewlett-Packard, Co., CBM2015-
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`00108, paper 10 at 8 (PTAB Oct. 7, 2015) (citing Transition Program for Covered
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`Business Method Patents—Definitions of Covered Business Method Patent and
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`Technological Invention; Final Rule, 77 Fed. Reg. 48,7343, 48,735 (Aug. 14,
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`2012)) (emphasis added).
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`Accordingly, to institute CBM proceedings, the petitioner must “analyze the
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`claim language, in detail and in context, to explain how the claim language recites”
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`a financial purpose. Par Pharm., CBM2014-00149, Paper 12 at 12. Absent this
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`showing, a petitioner’s argument is merely conclusory and does not support
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`institution of CBM proceedings. Id. Even if the specification does disclose
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`financial-related embodiments, without a tie to the claims themselves, such
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`disclosures are just general examples, and do not render the patent CBM eligible.
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`ServiceNow, CBM2015-00108, Paper 10 at 15 (denying institution of CBM review
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`noting that while the only embo