UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`AMAZON.COM, INC., AMAZON DIGITAL SERVICES, INC., AMAZON
`FULFILLMENT SERVICES, INC., HULU, LLC, and NETFLIX, INC.,
`Petitioners,
`
`v.
`
`UNILOC LUXEMBOURG, S.A.,
`Patent Owner.
`
`CASE: IPR2017-00948
`Patent No. 8,566,960
`
`Before DAVID C. MCKONE, BARBARA A. PARVIS, and MICHELLE N.
`WORMMEESTER, Administrative Patent Judges.
`
`PETITIONERS’ REPLY
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`AMAZON.COM, INC., AMAZON DIGITAL SERVICES, INC., AMAZON
`FULFILLMENT SERVICES, INC., HULU, LLC, and NETFLIX, INC.,
`Petitioners,
`
`v.
`
`UNILOC LUXEMBOURG, S.A.,
`Patent Owner.
`
`CASE: IPR2017-00948
`Patent No. 8,566,960
`
`Before DAVID C. MCKONE, BARBARA A. PARVIS, and MICHELLE N.
`WORMMEESTER, Administrative Patent Judges.
`
`PETITIONERS’ REPLY
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`PATENT OWNER MISCHARACTERIZES THE INVENTION
`BASED UPON ALLEGED LIMITATIONS NOT PRESENT IN THE
`CLAIMS OR DISCLOSED IN THE PATENT .............................................1
`
`THE BOARD PROPERLY CONSTRUED THE CLAIM LIMITA-
`TIONS.............................................................................................................3
`
`A.
`
`The Board Properly Concluded That “Setting” The Allowed
`Copy Count Does Not Require “Adjusting” The Allowed Copy
`Count ....................................................................................................3
`
`B.
`
`The Board Properly Construed The “Verify” Limitation ....................8
`
`III.
`
`THE LIMITATIONS CHALLENGED BY PATENT OWNER ARE
`DISCLOSED IN THE PRIOR ART ............................................................13
`
`A.
`
`B.
`
`C.
`
`D.
`
`DeMello Discloses The “Verify” Limitation As Properly Con-
`strued By The Board...........................................................................13
`
`DeMello Discloses Setting the Allowed Copy Count In Re-
`sponse To The Device Identity Not Being On Record ......................16
`
`Patent Owner Fails To Identify Any Error In The Board’s De-
`termination That DeMello Anticipates Claims 7, 12, and 16 ............19
`
`Petitioners Proved That Claims 6, 11, And 15 Are Obvious
`Based Upon DeMello And The Knowledge Of A POSITA ..............20
`
`IV.
`
`INTER PARTES REVIEW PROCEEDINGS ARE CONSTITU-
`TIONAL........................................................................................................23
`
`V.
`
`CONCLUSION.............................................................................................23
`
`CERTIFICATE OF COMPLIANCE WITH LIMITATION ON WORD
`COUNT (37 C.F.R. § 42.24) ........................................................................25
`
`CERTIFICATE OF SERVICE ...............................................................................26
`
`-i-
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`Arendi S.A.R.L. v. Apple Inc.,
`832 F.3d 1355 (Fed. Cir. 2016) ..........................................................................22
`
`PAGE
`
`In re Sang-Su Lee,
`277 F.3d 1338 (Fed. Cir. 2002) ..........................................................................22
`
`In re Smith Int’l, Inc.,
`871 F.3d 1375 (Fed. Cir. 2017) ..........................................................................12
`
`Johnson Health Tech. Co. Ltd. v. Icon Health & Fitness, Inc.,
`IPR2014-00184, Paper 12 (PTAB June 10, 2014) .............................................22
`
`MCM Portfolio LLC v. Hewlett-Packard Co.,
`812 F.3d 1284 (Fed. Cir. 2015) ..........................................................................23
`
`Rhine v. Casio, Inc.,
`183 F.3d 1342 (Fed. Cir. 1999) ............................................................................5
`
`STATUTES
`
`35 U.S.C. § 311(b) ...................................................................................................22
`
`-ii-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`Petitioners respectfully reply to Patent Owner’s Response (Paper No. 15),
`
`which fails to overcome Petitioners’ showing and the Board’s correct assessment
`
`that claims 1-25 of U.S. Patent No. 8,566,960 are invalid and should be cancelled.
`
`I.
`
`5
`
`PATENT OWNER MISCHARACTERIZES THE INVENTION
`BASED UPON ALLEGED LIMITATIONS NOT PRESENT IN THE
`CLAIMS OR DISCLOSED IN THE PATENT.
`
`To support its argument that “setting” in the claims of the ’960 Patent means
`
`“adjusting,” Patent Owner repeatedly mischaracterizes the patent and invention.
`
`Specifically, Patent Owner argues that the ’960 Patent is directed to a system for
`
`10
`
`“temporarily” increasing a limit on the number of devices allowed to access a digi-
`
`tal product and then returning the device limit to a previous setting. (See, e.g., Re-
`
`sponse at 4 (“Under certain conditions, a temporary ‘grace period’ may be applied,
`
`during which a reasonable number of additional copy count(s) may also be allowed
`
`to run.”).) The ’960 Patent, however, never discloses or claims returning the de-
`
`15
`
`vice limit (i.e., the “allowed copy count”) to a previous setting. Indeed, the patent
`
`never discloses how such a system could be implemented, and the limitations of
`
`the claims prohibit such a system.
`
`To allow users to access a digital product from newly acquired devices, the
`
`patent discloses a system where the number of allowed devices is set to a first limit,
`
`20
`
`and then that limit can be increased over time. (See, e.g., ’960 Patent at 4:13-17
`
`(“In accordance with one or more aspects of the embodiments described herein,
`
`-1-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`there is provided a system for adjustable digital licensing over time allows a soft-
`
`ware user to increase the number of devices they can use with a particular software
`
`license over the period of ownership of that license.”).) For example, the patent
`
`discloses setting the allowable device limit to five devices for the first five days af-
`
`5
`
`ter the initial authorization, then increasing the limit to seven devices for the next
`
`25 days, and then increasing the limit to 11 devices thereafter. (Id. at 4:27-34.)
`
`The patent never discloses increasing the allowed device limit to a higher
`
`number of devices and then decreasing the limit back to a previous setting. Not
`
`surprisingly, Patent Owner has not identified any such disclosure in the specifica-
`
`10
`
`tion or claims.
`
`Not only is there no disclosure of decreasing the device limit back down to a
`
`previous setting, the claims preclude reducing the number of authorized devices to
`
`a lower number. Each of the independent claims of the ’960 Patent recite that the
`
`system checks if the device identity is on record, and if it is on record, allowing the
`
`15
`
`digital product to be used on the device. (’960 Patent at 12:5-7 (“in response to the
`
`device identity already being on a record, allow the digital product to be used on
`
`the given device”); id. at 13:42-44 (same); id. at 14:32-34 (same).) Thus, even if
`
`the allowed copy count were decreased back down to a previous, lower setting, all
`
`of the previously authorized devices would continue to be allowed access to the
`
`-2-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`digital product because their device identities would already be on record as an au-
`
`thorized device.1
`
`Thus, the specification does not support, and the claims contradict, Patent
`
`Owner’s assertion that the invention provides for a “grace period” or a temporary
`
`5
`
`increase followed by a decrease in the number of devices allowed to access the
`
`digital product.
`
`II.
`
`THE BOARD PROPERLY CONSTRUED THE CLAIM
`LIMITATIONS.
`
`Patent Owner challenges two of the Board’s claim constructions but fails to
`
`10
`
`show error with either construction under the broadest reasonable interpretation
`
`(“BRI”) standard.
`
`A.
`
`The Board Properly Concluded That “Setting” The Allowed
`Copy Count Does Not Require “Adjusting” The Allowed
`Copy Count.
`The Board correctly rejected Patent Owner’s argument that “setting the al-
`
`15
`
`lowed copy count to a first upper limit for a first time period” requires “adjusting
`
`the allowed copy count” from one setting to another. (Paper 10 at 12-16 (emphasis
`
`
`1 Though the patent specification does discuss reducing the number of devices
`
`authorized to access a digital product (Ex. 1001 at 6:34-40), the patent never dis-
`
`closes how such a system could be implemented given that previously authorized
`
`devices would continue to be allowed access to the digital product.
`
`-3-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`added).) In its Institution Decision, the Board found that, regardless of whether the
`
`preamble is a claim limitation, Patent Owner had failed to demonstrate why
`
`“set[ing] the allowed copy count” in the body of the claims should be redefined by
`
`the term “adjusting” recited in the preamble. (Id. at 13.) As the Board noted, “set-
`
`5
`
`ting” the allowed copy count to a value might be a change from a previous value.
`
`(Id. at 15.) But it also encompasses “setting” the allowed copy count for the first
`
`time. (See, e.g., Ex. 1001 at 4:5-9 (“Upon installation of the protected software the
`
`invention will allow the user to obtain additional device installations from the pub-
`
`lishers [sic] license management server for the same license (e.g., up to a total of
`
`10
`
`seven devices) even though the device limit is initially set to five.”) (emphasis
`
`added).) Patent Owner fails to demonstrate any error in the Board’s analysis.
`
`Patent Owner first argues that the purpose of the claim recited in the pream-
`
`ble would be vitiated if the independent claims had no limitation “directed to ad-
`
`justing.” (Response at 9.) That argument fails because, as evidenced by some of
`
`15
`
`the dependent claims, the claimed invention could be used to adjust an allowed de-
`
`vice limit, at least to a higher limit, thereby satisfying the intended purpose of the
`
`invention. (See, e.g., Ex. 1001 at 12:42-51, 12:55-58, 12:66-13:9.)
`
`Patent Owner next argues that when the allowed copy count is “set,” that
`
`means it must be “adjusted” from its current value to a new value. (Response at
`
`20
`
`10.) According to Patent Owner, the allowed copy count is changed from a non-
`
`-4-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`zero number of “at least one,” as recited in the preamble, to the “first upper limit,”
`
`as recited in the body of the claims. (Id.) There are several errors in Patent Own-
`
`er’s arguments. Most significantly, there is nothing recited in the claims or dis-
`
`closed in the specification whereby the allowed copy count would be set to any
`
`5
`
`number before being set in response to a device identity not being on record.
`
`Therefore, the first time a device identity is not found on the record, the allowed
`
`copy count would be “set” to a value and not “adjusted” from a previous value.
`
`Patent Owner also errs in asserting that the reference to “at least one allowed
`
`copy count” in the preamble means that the allowed copy count has a “non-zero”
`
`10
`
`value. (Response at 10.) As Patent Owner’s expert admits, the “allowed copy
`
`count” is a variable. (Ex. 2001 at 18, fn. 1 (Patent Owner’s expert explaining that
`
`“[t]he allowed copy count is a variable”).) The recitation in the preamble of “at
`
`least one allowed copy count” means that there can be one or more variables; it
`
`does not mean that the variable or variables are set to a value of “at least one.”
`
`15
`
`Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999) (“Use of the phrase ‘at
`
`least one’ means that there could be only one or more than one.”). Similarly, a
`
`claim that refers to “at least one doorknob” would mean that there is at least one
`
`such doorknob, not that the doorknob has a value of at least one.
`
`Patent Owner further errs in quoting a portion of Dr. Rubin’s testimony as
`
`20
`
`allegedly supporting its assertion that “setting” means “adjusting.” (Response 10-
`
`-5-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`11.) First, Patent Owner questioned Dr. Rubin without providing him with a copy
`
`of his declaration, despite his request for a copy, thereby forcing him to try to ei-
`
`ther recall or reanalyze issues on the fly. (Ex. 2003 at 9:1-7.) Second, in portions
`
`of the deposition transcript not addressed by Patent Owner, Dr. Rubin clarified that
`
`5
`
`“setting” can mean an initial setting of a variable, whereas “adjusting” means
`
`changing the variable from one setting to another:
`
`Q: And in the context of, again, this patent what is the difference
`then if any between the terms adjusting and set?
`
`. . .
`
`A:
`
`10
`
`15
`
`. . . But if I’m going to do this in realtime right now without my
`report I would say that the difference is that if you are adjusting
`then you are already set at a particular value and you change it
`and possibly change it to some other value. Whereas when you
`set it, it could have not been set. You just would -- you know,
`it could be an undefined or uninitialized variable and then you
`just set it to a particular value.
`
`(Ex. 2003 at 12:3-13:3.) Dr. Rubin further testified:
`
`Q:
`
`Sure. Is it the case that initially setting a variable is not an ad-
`justment of that variable?
`
`20
`
`MR. SHVODIAN: Same objections.
`
`THE WITNESS: So in what programming language?
`
`BY MR. HUANG:
`
`-6-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`Q: What is the program language you’re most familiar with?
`
`A:
`
`Q:
`
`C.
`
`In C then. If you in the act of initiating a variable in C is that
`not considered an adjustment of that variable?
`
`5
`
`MR. SHVODIAN: Same objections.
`
`THE WITNESS: Outside of my case and without my report I would
`say that’s not an adjustment, that’s a setting.
`
`(Id. at 26:18-27:12.) Thus, Dr. Rubin distinguished between “setting” and “adjust-
`
`ing,” despite Patent Owner’s assertion to the contrary.
`
`10
`
`Patent Owner next argues that the dependent claims support Patent Owner’s
`
`position. (Response at 11-12.) They do not. As the Board noted in its Institution
`
`Decision, “setting” can mean setting the allowed copy count for the first time, or it
`
`can mean setting the allowed copy count to a new value from a previous setting.
`
`(Paper 10 at 15.) Thus, the reference in the dependent claims to setting the allowed
`
`15
`
`copy count to a second or third upper limit does not provide any support that “set-
`
`ting” means “adjusting.” In sum, Patent Owner’s proposed construction should not
`
`be adopted because Patent Owner has failed to show any error with the Board’s
`
`construction.
`
`Patent Owner also asserts that
`
`this claim construction issue is “fully-
`
`20
`
`dispositive” (Response at 1, 8) and that “the Petition ignores altogether the ‘adjust-
`
`ing’ limitations of the independent claims” (id. at 13). In making those assertions,
`
`-7-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`Patent Owner ignores that Petitioners demonstrated that, even if the preamble is
`
`limiting and even if “setting” does require “adjusting” the copy count, DeMello
`
`discloses adjusting the allowed copy count and the claims are still invalid. (See,
`
`e.g., Paper 1 at 21 (“The preamble is not a limitation. Nevertheless, DeMello
`
`5
`
`teaches . . . .”); id. at 23 (“More particularly, the DeMello system sets an allowed
`
`copy count under the license, i.e., a maximum number of devices authorized for
`
`use, and adjusts this number over time.”); id. at 31 (discussing DeMello’s disclo-
`
`sure of five activations followed by an additional activation for every subsequent
`
`90 day period).) Patent Owner fails to address either of these showings and there-
`
`10
`
`fore has waived any argument that this disclosure in DeMello does not disclose ad-
`
`justing the allowed copy count, even if Patent Owner’s construction for “setting”
`
`were adopted.
`
`The Board Properly Construed The “Verify” Limitation.
`B.
`In its Decision instituting this inter partes review, the Board construed the
`
`15
`
`“verify[ing]” limitation found in each of the independent claims. (Paper 10 at 7-
`
`11.) The Board found that the “verify[ing]” limitation encompasses “checking
`
`whether the unique device information is reflected in a database as authorized for a
`
`license.” (Id. at 11.) The Board further found that the test for “verifying validity
`
`based in part on a device identity . . . is evaluated in the following two ‘response to
`
`20
`
`limitations’” of the independent claims. (Id. at 11 (discussing claim 25, though the
`
`-8-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`same analysis applies to the other two independent claims).) The Board reached
`
`this construction, in part, because “[d]etermining whether the unique device infor-
`
`mation is on record for a license, at steps 15 and 16, is a determination whether the
`
`license is valid for the corresponding device and is the only test that the specifica-
`
`5
`
`tion describes as based at least in part on the unique device information.” (Id. at 10
`
`(emphasis added).) Patent Owner disputes the Board’s construction of this term,
`
`though Patent Owner primarily repeats arguments already rejected by the Board
`
`and fails to show any error in the Board’s analysis.
`
`Patent Owner argues that the “verify” limitation concerns a distinct test “di-
`
`10
`
`rected to the ‘license data’ itself, not to the expressly distinguished ‘device identi-
`
`ty’ . . . .” (Response at 14.) The claims, however, recite that the verification is
`
`“based at least in part on a device identity generated by sampling physical parame-
`
`ters of the given device.” (’960 Patent at 12:1-4, 13:38-41, 14:28-31.) As the
`
`Board found, the only test disclosed in the patent based, even in part, on the device
`
`15
`
`identity is the check of whether the device identity is already on record, allowing
`
`access if the device identity is already on record, and if not on record checking if
`
`an additional device can be authorized without exceeding the limit on the number
`
`of allowed devices. (Paper 10 at 10.)
`
`Patent Owner next argues that the claim language itself shows that determin-
`
`20
`
`ing whether the license data is valid is a distinct inquiry from determining whether
`
`-9-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`the device identity is on the record. (Response at 14-15.) To the contrary, the
`
`claim language recites only a single inquiry based upon the device identity. The
`
`subsequent two claim limitations recite what is done “in response to” the outcome
`
`of that inquiry – allow access if the device is on the record and, if not on the record,
`
`5
`
`allow access if the device count is less than the current device limit. (’960 Patent
`
`at 12:1-19.)
`
`Though Patent Owner points to step 13 of Figure 2 as a distinct inquiry (Re-
`
`sponse at 15), there is no disclosure in the patent of that inquiry being based in part
`
`on the device identity, as recited in the claims. For example, Patent Owner quotes
`
`10
`
`the following portion of the specification:
`
`If the request for authorization 12 includes license information/data
`that is valid, the license information checking process (at step 13) will
`pass and the requesting devices unique identity information 11 is
`checked to see if it exists in the database of prior authorizations 15.
`
`15
`
`(Response at 15, quoting Ex. 1001 at 5:1-5.) There is no indication in that quote
`
`that the inquiry at step 13 is based in part on the device identity. Indeed, the quote
`
`indicates that the device identity is not checked until the subsequent step. Thus,
`
`there is no basis for Patent Owner to tie step 13 of Figure 2 to the “verify” limita-
`
`tion recited in the claim.
`
`20
`
`Moreover, Patent Owner offers no explanation of how such a test could
`
`work. The “License Info checked” inquiry at step 13 of Figure 2 shows that if the
`
`-10-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`test fails, authorization is denied. (’960 Patent at Fig. 2; see also id. at 4:60-64.) If
`
`a user tries to access the digital product using a new device, how could the system
`
`verify the validity of the license information based at least in part on a device iden-
`
`tity when the system had never previously seen that device identity? Patent Owner
`
`5
`
`offers no explanation. The only verification inquiry based in part on a device iden-
`
`tity that makes sense is the test identified by the Board – checking to determine if
`
`the device identity is on record and then, based upon the results of that inquiry,
`
`performing the two “in response to” limitations recited in the claims.
`
`Patent Owner also argues that the Board’s construction must be wrong be-
`
`10
`
`cause the claims recite that the verify inquiry is based, not entirely but only “at
`
`least in part,” on the device identity. (Response at 15.) Patent Owner contends
`
`that the two “in response to” limitations of the claims do not recite the “at least in
`
`part qualifications.” First, a test that depends entirely on the device identity is a
`
`test that is at least based in part on the device identity. Second, the record contain-
`
`15
`
`ing the device identity would necessarily include some additional information,
`
`such as information associating the device identities in the record with a particular
`
`user or license. (See, e.g., Ex. 1003 at 25:1-8 (a data base associating the PASS-
`
`PORT ID, device ID, and time stamps).) Otherwise, there would be no way to de-
`
`termine if the device limit for that particular license has been exceeded. Therefore,
`
`20
`
`the verification test identified by the Board is “based in part” on the device identity.
`
`-11-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`Patent Owner further argues that its proposed construction is not precluded
`
`by the specification (Response at 17), but claims are not construed such that a
`
`claim term can mean anything not precluded by the specification. Instead, claim
`
`terms must be construed in light of the specification such that the specification
`
`5
`
`supports the construction. In re Smith Int’l, Inc., 871 F.3d 1375, 1382–83 (Fed. Cir.
`
`2017). The Board’s construction is supported by the specification, whereas Patent
`
`Owner’s construction lacks any such support.
`
`Finally, Patent Owner argues that specification is replete with examples of
`
`using unique device information to perform validity checks. (Response at 18.)
`
`10
`
`The portions of the specification cited by Patent Owner, however, do not discuss
`
`performing validity checks. They discuss what information can be contained in or
`
`used to generate the unique device identity:
`
`15
`
`20
`
` “In still further related aspects, the device identity may comprise
`unique device identifying information . . . .” (Ex. 1001 at 9:20-24
`(emphasis added).)
`
` “The device identity may be generated by utilizing at least one ir-
`reversible transformation . . . .” (Id. at 9:24-28 (emphasis added).)
`
` “The device identity may be generated by utilizing a cryptographic
`hash function . . . .” (Id. at 9:28-31 (emphasis added).)
`
` “It is noted that generating the device identity may also be de-
`scribed as generating a device fingerprint and may entail . . . .” (Id.
`at 9:32-36 (emphasis added).)
`
`-12-
`
`
`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
` “In addition to the chip benchmarking and degradation measure-
`ments, the process for generating a device identity may 55 include
`measuring physical, non-user-configurable characteristics . . . .”
`(Id. at 9:54-57 (emphasis added).)
`
`5
`
` “The device identity may be generated by utilizing machine or de-
`vice parameters . . . .” (Id. at 10:3-9 (emphasis added).)
`
`Indeed, the next thirteen consecutive paragraphs cited by Patent Owner begin “The
`
`device identity may also be generated by . . . .” (Id. at 10:10-67.)
`
`Thus, Patent Owner fails to show any error in the Board’s construction of
`
`10
`
`the “verify[ing]” limitations.
`
`III. THE LIMITATIONS CHALLENGED BY PATENT OWNER ARE
`DISCLOSED IN THE PRIOR ART.
`
`A.
`
`DeMello Discloses The “Verify” Limitation As Properly
`Construed By The Board.
`
`15
`
`As discussed above, the Board properly construed the “verify” limitation in
`
`the asserted claims. Under that construction, the Board correctly determined that
`
`DeMello discloses the limitation. (Paper 10 at 24-25.) In trying to refute that find-
`
`ing, Patent Owner presents three arguments, none of which show any error in the
`
`Board’s analysis.
`
`20
`
`First, Patent Owner argues that DeMello’s disclosure of checking a user’s
`
`PASSPORT ID, standing alone, does not meet the claim limitation. (Response at
`
`21.) Petitioners did not assert that it does. Rather, Petitioners explained how the
`
`-13-
`
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`
`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
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`user’s PASSPORT ID is used in conjunction with the device identity to perform
`
`the verify test. (Paper 1 at 27-28.)
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`Second, Patent Owner argues that the Board misconstrued the “verify” limi-
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`tation and that the limitation, under Patent Owner’s construction, is not satisfied by
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`5
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`DeMello. (Response at 21-22.) As addressed in Section II.B above, the Board
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`properly construed the limitation.
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`Third, Patent Owner argues that Petitioners’ application of DeMello would
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`render claim 25 nonsensical (Response at 22-23), but Patent Owner fails to support
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`that assertion. According to Patent Owner, it would be impossible for an initial
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`10
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`device authorization to succeed in claim 25 under Petitioners’ construction of the
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`“verify” limitation. (Id. at 23.) Patent Owner’s argument appears to be based upon
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`a misunderstanding of Petitioners’ showing of anticipation and the Board’s con-
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`struction of the “verify” limitation.
`
`As demonstrated in the Petition, DeMello discloses using the device identity
`
`15
`
`to check if the request for access to the digital product is being made from a new
`
`device. (Paper 1 at 27-28; Ex. 1003 at 25:1-7, 22:46-53.) If the device is already
`
`on record, the user is given access to digital product. (Paper 1 at 28-29; Ex. 1003
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`at 25:4-8.) If the device is not on record, then the system determines the appropri-
`
`ate device limit for that period (such as five devices for the first 90 days) and de-
`
`20
`
`termines if the current device count is less than the device limit that is applicable
`
`-14-
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`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
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`for that time period. (Paper 1 at 30-31; Ex. 1003 at 22:54-56; 23:4-10.) If so, the
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`user is given access to the media. (Paper 1 at 32; Ex. 1003 at 23:11-14.) If the re-
`
`quest is the initial request from a user, there would be no devices on record, and
`
`the system would know that this is the initial authorization and would apply the
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`5
`
`initial device limit (e.g. five devices for the first 90 days) and would allow the de-
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`vice to access the media.
`
`Patent Owner appears to contend that the system of claim 25 would be ren-
`
`dered inoperative when the first device is used because the allowed copy count
`
`could not be set to “a first upper limit for a first time period after an initial authori-
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`10
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`zation” because no initial authorization had yet to take place. (Response at 22-23.)
`
`But this same argument would apply under Patent Owner’s construction of the
`
`“verify” limitation. Even if the “verify” step referred to some undisclosed separate
`
`analysis of license data based in part upon the device identify, as proposed by Pa-
`
`tent Owner, passing that verify step would not be an “authorization.” As demon-
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`15
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`strated in Figure 2 of the ’960 Patent at box 18, the authorization would not occur
`
`until after the device identity is checked and the device is allowed to access the
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`digital product. (’960 Patent at Fig. 2, box 18; id. at 4:25-34 (using “authorized” to
`
`refer to devices allowed to access the digital product); id. at 5:1-6:7 (same).) Ac-
`
`cordingly, if Patent Owner were correct about the initial authorization request al-
`
`-15-
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`
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`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
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`ways failing, that would be true under Patent Owner’s interpretation of the “verify”
`
`limitation.
`
`Patent Owner’s argument fails for another reason. Even if Patent Owner
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`were correct that the “allowed copy count” in claim 25 could not be set during the
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`5
`
`first device request because there had not been an initial authorization, the first de-
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`vice would still be authorized because the final limitation of the claim does not
`
`compare the device count to the allowed copy count. Instead, the limitation states
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`“when the calculated device count is less than the first upper limit, allow the digital
`
`product to be used on the given device.” (’960 Patent at 12:17-19; id. at 14:4-6; id.
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`10
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`at 14:45-47).) Thus, the first device would be authorized even if Patent Owner
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`were correct that the allowed copy count had not been assigned a value. Addition-
`
`ally, even if Patent Owner were correct that claim 25 is not anticipated by the ini-
`
`tial authorization request in DeMello, it would be anticipated by each subsequent
`
`device request, and therefore DeMello would still anticipate claim 25.
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`15
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`Patent Owner therefore failed to demonstrate any error in the Board’s find-
`
`ing that DeMello discloses the “verify” limitation.
`
`B.
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`DeMello Discloses Setting the Allowed Copy Count In Re-
`sponse To The Device Identity Not Being On Record.
`
`Patent Owner argues that DeMello does not disclose “in response to the de-
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`20
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`vice identify not being on record, set the allowed copy count to a first upper limit
`
`for a first time period.” (Response at 25.) According to Patent Owner, Petitioners
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`-16-
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`
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`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
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`fail to demonstrate that DeMello discloses this limitation because they did not in-
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`terpret “setting” to mean “adjusting.” (Id.) As discussed in Section II.A above,
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`both Petitioners and the Board have correctly determined that “setting” does not
`
`mean “adjusting.” As also discussed in Section II.A, even if “setting” the allowed
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`5
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`copy count did require “adjusting” it, DeMello discloses adjusting the limit on the
`
`number of allowed devices. (See, e.g., Ex. 1003 at 24:60-63 (“As time passes, the
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`number [of allowed activations] is increased, at a suggested rate of, e.g., one addi-
`
`tional activation every 90 days (from the date of the first Activation) until the
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`number reaches 10.”).)
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`10
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`Patent Owner also argues that “DeMello relies on a static schedule of activa-
`
`tion limits, such that increases only occur at fixed intervals.” (Response at 26.)
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`The system disclosed in DeMello, however, first checks if the device identity is on
`
`record. (Ex. 1003 at Fig. 8, step 164.) Only if the device is not on record (i.e., it is
`
`a new activation) does the system proceed to step 168, where the system deter-
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`15
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`mines and applies the proper limit for the current time period. (Id. at Fig. 8, step
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`168.) This step is described in the specification:
`
`If it is determined that this is a new activation at step 164, then the
`process proceeds to step 168 to determine whether an activation limit
`has been reached. . . . In the example of FIG. 8, users are limited to
`five activations within 90 days after the first activation of the read-
`er. . . . The limit on activations may also allow for additional activa-
`
`20
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`-17-
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`
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`Petitioners’ Reply regarding Inter Partes Review of U.S. Patent No. 8,566,960
`
`tions as time passes—e.g., one additional activation for each 90 day
`period after the first 90 days, up to a limit of 10 total activations.
`
`(Id. at 22:54- 23:8.) Because the determination of what device limit to apply in
`
`step 168 is only reached if the device identity is not on record, that device limit is
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`5
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`set in response to the device identity not being on record.
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`Moreover, claim 1 of the ’960 Patent must encompass systems where the
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`device limits are determined based upon “fixed intervals” measured from the time
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`of the initial authorization, just as they are in DeMello, because the dependent
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`claims recite such limitations:
`
`10
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`15
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`5. The system of claim 1, wherein the first time period comprises a
`defined number of days after an initial authorization of the digital
`product.
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`6. The system of claim 5, wherein the defined number of days com-
`prises six days since the initial authorization, and wherein the first up-
`per limit comprises five authorized devices.
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`(Ex. 1001 at 12:27-34 (emphasis added).) Because claim 22 uses the same lan-
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`guage as claim 1, it must be equally as broad. And claim 25 of the ’960 Patent re-
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`cites that the first time period runs from the time of the initial authorization. (Id. at
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`Ex. 1001 at 14:14:37-38.) Thus, Patent Owner fails to distingui
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