IN THE UNITED STATES PATENT AND TRADEMARK OFFICE

Transcription

1 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE In re Patent of: Racz et al. Attorney Docket No.: U.S. Patent No.: 8,061,598 Issue Date: November 22, 2011 Appl. Serial No.: 13/012,541 Filing Date: January 24, 2011 Title: DATA STORAGE AND ACCESS SYSTEMS Mail Stop Patent Board Patent Trial and Appeal Board U.S. Patent and Trademark Office P.O. Box 1450 Alexandria, VA PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF UNITED STATES PATENT NO. 8,061,598 PURSUANT TO 35 U.S.C. 321 AND 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT

2 TABLE OF CONTENTS i Attorney Docket No I. MANDATORY NOTICES UNDER 37 C.F.R 42.8(a)(1)... 1 A. Real Party-In-Interest Under 37 C.F.R. 42.8(b)(1)... 1 B. Related Matters Under 37 C.F.R. 42.8(b)( C. Lead And Back-Up Counsel Under 37 C.F.R. 42.8(b)( II. PAYMENT OF FEES... 2 III. REQUIREMENTS FOR CBM UNDER 37 C.F.R A. Grounds for Standing Under 37 C.F.R (a... 2 B. Challenge Under (b) and Relief Requested... 2 C. Claim Construction under 37 C.F.R (b)(3)... 4 D. The 598 Patent is a Covered Business Method Patent... 5 E. The 598 Patent Is Not Directed to a Technological Invention, And Thus, Should Not Be Excluded From the Definition of a CBM Patent IV. SUMMARY OF THE 598 Patent A. Brief Description B. Summary of the Prosecution History of the 598 Patent C. OMITTED V. DEMONSTRATION OF A REASONABLE LIKELIHOOD THAT AT LEAST ONE CLAIM OF THE 598 PATENT IS UNPATENTABLE A. GROUND 1 Claim 7 is Patent-Ineligible under 35 U.S.C. 101 For Abstractness Legal Standard Claim 7 of the 598 Patent Recites an Abstract Idea, as Each of the Limitations Can be Performed in the Human Mind and by a Human Using a Pen and Paper (i) interface for reading and writing data (ii) use rule memory to store one or more use rules (iii) program store storing code for storing at least one content data item in the content data memory and at least one use rule in the use rule memory (iv) a processor (v) payment data memory to store payment data and code to provide the payment data to a payment validation system Claim 7 of the 598 Patent Recites an Abstract Idea, as it Preempts All Effective Uses of the Abstract Idea of Enabling Limited Use of Paid-for/Licensed Content... 21

3 4. Claim 7 of the 598 Patent is Not Tied to a Particular Machine in any Manner that Would Make Claim 7 Patent- Eligible Claim 7 of the 598 Patent Does Not Transform Anything in any Manner that Would Make it Patent-Eligible B. OMITTED VI. CONCLUSION ii

4 EXHIBITS Attorney Docket No Exhibit 1001 U.S. Patent No. 8, ( the 598 Patent or 598 ) Exhibit 1002 File history of U.S. Patent No. 8,061,598 Exhibit 1003 Declaration of Dr. Jeffrey Bloom ( Bloom ) Exhibit 1004 U.S. Patent No. 5,530,235 (incorporating 5,629,980) ( Stefik 235 ) Exhibit 1005 U.S. Patent No. 5,629,980 ( Stefik 980 ) Exhibit 1006 Exhibit 1007 PCT Publication No. WO 00/08909 ( Gruse ) PCT Application PCT/GB00/04110 ( the 110 Appln. or 110 ), which is the application as filed for U.S. Patent Application No. 11/336,758 ( the 758 Appln. or 758 ) and U.S. Patent Application No. 10/111,716 ( the 716 Appln. or 716 ) Exhibit 1008 United Kingdom Patent Application GB ( the Appln. or ) Exhibit 1009 Transitional Program for Covered Business Method Patents Definitions of Covered Business Method Patent and Technological Invention, 77 Fed. Reg. 157 Exhibit 1010 (August14, 2012) A Guide to the Legislative History of the America Invents Act; Part II of II, 21 Fed. Cir. Bar J. No. 4 Exhibit 1011 Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos (July 27, 2010) iii

5 Exhibit 1012 Exhibit 1013 Exhibit 1014 Attorney Docket No Apple Inc. v. Sightsound Technologies, LLC, CBM Paper No. 17 (entered October 8, 2013) at Volusion, Inc. v. Versata Software, Inc. and Versata Development Group, Inc., CBM Paper No. 8 (entered October 24, 2013) Salesforce.com, Inc. v. VirtualAgility, Inc., CBM Paper No. 16 (entered November 19, 2013) Exhibit 1015 U.S. Patent No. 8,336,772 ( the 772 Patent or 772 ) Exhibit 1016 U.S. Patent No. 8,118,221 ( the 221 Patent or 221 ) Exhibit 1017 RESERVED Exhibit 1018 U.S. Patent No. 8,033,458 ( the 458 Patent or 458 ) Exhibit 1019 U.S. Patent No. 7,942,317 ( the 317 Patent or 317 ) Exhibit 1020 U.S. Patent Application No. 12/014,558 ( the 558 Appln. or 558 ) Exhibit 1021 U.S. Patent No. 7,334,720 ( the 720 Patent or 720 ) Exhibit 1022 Exhibit 1023 Exhibit 1024 RESERVED RESERVED RESERVED Exhibit 1025 U.S. Patent Application No. 13/012,541 ( the 541 Exhibit 1026 Exhibit 1027 Exhibit 1028 Appln. or 541 ) RESERVED RESERVED Weinstein MasterCard Plans Point-of-Sale Product for Merchants Leery of Bank Cards Exhibit 1029 Mayo Collaborative Serv v. Prometheus Labs., Inc., 132 S. Ct (2012) iv

6 Exhibit 1030 Gottschalk v. Benson, 409 U.S. 63 (1972) Exhibit 1031 Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) Exhibit 1032 Bilski v. Kappos, 130 S. Ct (2010) Exhibit 1033 Alice Corp. v. CLS Bank Internationa1,134 S. Ct (2014) Exhibit 1034 Bancorp Serv., L.L.C. v. Sun Life Assur. Co. (U.S.) 687 Exhibit 1035 F.3d 1266 (Fed. Cir. 2012) Dealertrack, Inc. v. Huber, 674 F.3d 1323 (Fed. Cir. Exhibit 1036 SiRF Tech., Inc. v. Int l Trade Comm n, 601 F.3d 1319 Exhibit 1037 Exhibit 1038 Exhibit-1039 (Fed. Cir. 2010) In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008) Accenture Global Services, GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013) Keith, Michael C., The Radio Station Broadcast, Satellite and Internet, Eighth Edition, 2009 v

7 Apple Inc. ( Petitioner or Apple ) petitions for Covered Business Method Patent Review ( CBM ) under 35 U.S.C. 321 and 18 of the Leahy-Smith American Invents Act of claim 7 ( the Challenged Claim ) of U.S. Patent No. 8,061,598. As explained in this petition, there exists a reasonable likelihood that Apple will prevail in demonstrating unpatentability with respect to at least one of the Challenged Claims based on teachings set forth in at least the references presented in this petition. Apple respectfully submits that a CBM should be instituted, and that the Challenged Claims should be canceled as unpatentable. I. MANDATORY NOTICES UNDER 37 C.F.R 42.8(a)(1) A. Real Party-In-Interest Under 37 C.F.R. 42.8(b)(1) Apple Inc. is filing this Petition and is the real party-in-interest. B. Related Matters Under 37 C.F.R. 42.8(b)(2 Apple is not aware of any disclaimers or reexamination certificates for the 598 Patent. The 598 Patent is the subject of a number of civil actions including: Smartflash LLC et al. v. Apple, Inc., Case No. 6:13-cv , Smartflash et al v. Samsung Electronics Co. Ltd. et al, Case No. 6:13-cv-00448, Smartflash LLC et al v. Google, Inc. et al., Case No. 6:14- cv-00435, Smartflash LLC et al. v. Amazon.Com, Inc., et al., No. 6:14-cv- 992, and Smartflash LLC et al. v. Apple, Inc., Case No. 6:15-cv It 1

8 is also the subject of the following Petitions for Covered Business Method Review: Apple Inc. v. Smartflash LLC, CBM , CBM , CBM , CBM , and CBM C. Lead And Back-Up Counsel Under 37 C.F.R. 42.8(b)(3 Apple designates J. Steven Baughman, Reg. No. 47,414, as Lead Counsel and Ching-Lee Fukuda, Reg. No. 44,334, and Megan Raymond, Reg. No. 72,997, as Backup Counsel, all available for service at Ropes & Gray LLP, IPRM Floor 43, Prudential Tower, 800 Boylston Street, Boston, MA or by electronic service by at II. PAYMENT OF FEES Apple authorizes charges to Deposit Account No for the fee set in 37 C.F.R (b) for this Petition and any related additional fees. III. REQUIREMENTS FOR CBM UNDER 37 C.F.R A. Grounds for Standing Under 37 C.F.R (a Apple certifies that the 598 Patent is eligible for CBM. Apple is not barred or estopped from requesting this review challenging the Challenged Claims on the below-identified grounds. B. Challenge Under (b) and Relief Requested Apple requests a CBM review of the Challenged Claims on the grounds set forth in the table shown below, and requests that each of the 2

9 Challenged Claims be found unpatentable. An explanation of how these claims are unpatentable under the statutory grounds identified below is provided in the form of detailed description that follows. Additional explanation and support for the ground of rejection is set forth in Exhibit-1003, the Declaration of Dr. Jeffrey Bloom ( Bloom ), originally filed by Samsung in CBM and re-filed and relied upon here by Apple only as it relates to the ground of rejection under 35 U.S.C. 101 set forth in referenced throughout this Petition. 598 Patent Claims Basis for Rejection Ground The 598 Patent issued Nov. 22, 2011 from the 541 Appln. (Exhibit 1025), which was filed on Jan. 24, The 541 appln is a continuation of the `558 Appln. (Exhibit 1020), which was filed Jan. 15, 2008 (now US Patent No. 7,942,317, Exhibit-1019), which is a continuation of the 758 Appln. (Exhibit 1007) filed Jan. 19, 2006 (now US Patent No. 7,334,720, Exhibit- 1021), which is a continuation of the 716 Appln. (Exhibit-1007) filed Sep. 17, 2002 (now abandoned), which is a National Stage Entry of the 110 Appln. (Exhibit-1007) filed Oct. 25, The 110 Appln. claimed priority to United 3

10 Kingdom Patent Appln. GB (Exhibit-1008, the Appln. or ), which was filed Oct. 25, C. Claim Construction under 37 C.F.R (b)(3) In the institution decision in CBM , the PTAB construed only the term access rule, and decided that the other terms should be interpreted according to their ordinary and customary meaning: 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 (b); see also In re Cuozzo Speed Techs., LLC, 2015 WL at *7 (Fed. Cir. Feb. 4, 2015) ( We conclude that Congress implicitly adopted the broadest reasonable interpretation standard in enacting the AIA. ). 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., 504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this decision, we construe the claim term use rule. The term use rule is recited in independent claim 1. Neither party proposes a construction of use rule. The 598 patent describes use rules as for controlling access to the stored content (Ex. 1001, Abstract) and as indicating permissible use of data stored on the carrier (id. at 9:14-16). The 598 patent also describes evaluating the use status data using the use rules to determine whether access to the stored data is permitted. Id. at 6:38-40; see also id. at 21:48-53 ( [E]ach content data item has an 4

11 associated use rule to specify under what conditions a user of the smart Flash card is allowed access to the content data item. ). Accordingly, for purposes of this decision, we construe use rule as a rule specifying a condition under which access to content is permitted. See 4/2/2015 Decision in CBM (Pap. 7) at 6-7. Petitioner submits that, under these circumstances and the broadest reasonable interpretation standard applicable in this review, it would be appropriate for the Patent Trial and Appeal Board ( PTAB ) to adopt these constructions in this Covered Business Method review. 1 D. The 598 Patent is a Covered Business Method Patent The 598 Patent, which generally relates to systems and methods for downloading and paying for data is a covered business method patent ( CBM patent ) as defined under 18 of the AIA and 37 C.F.R at Abstract. The AIA defines a CBM patent as a patent that claims a method or corresponding apparatus for performing data processing or other operations 1 Because the standards of claim interpretation applied in litigation differ from PTO proceedings, any interpretation of claim terms in this CBM is not binding upon Petitioner in any litigation related to the subject patent. See In re Zletz, 893 F.2d 319, (Fed. Cir. 1989). 5

12 used in the practice, administration, or management of a financial product or service (emphases added). AIA 18(d)(1); see also 37 C.F.R. The AIA s legislative history demonstrates that the term financial product or service should be interpreted broadly, encompassing patents claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity. Exhibit-1009 at (quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)). Moreover, as the Guide to the Legislative History of the America Invents Act indicates, the language practice, administration, or management is intended to cover any ancillary activities related to a financial product or service, including... marketing, customer interfaces [and] management of data... (emphases added). Exhibit-1010 at Augmenting the statutory language with the above-referenced clarifications from the legislative history, and from the Guide to that legislative history, yields the following definition of a CBM patent: a patent that claims a method or corresponding apparatus for performing data processing or other operations used in activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity, including the management of data. See AIA 18(d)(1); Exhibit-1009 at 48735; and Exhibit-1010 at

13 In the words of the Patent Owner, the claims of the 598 Patent are directed to a portable data carrier for storing and paying for data. See 598 at 1: Claim 7 of the 598 Patent, for example, recites a portable data carrier, that includes payment data memory to store payment and code to provide the payment data to a payment validation system. As an example, the purported data carrier and payment validation system of claim 7 unquestionably are used for data processing in the practice, administration, and management of financial products and services; specifically, for processing payments for data downloads. Bloom at, e.g., 23. Indeed, in a recent decision involving highly similar claims, the Board determined that selling a desired digital audio signal to a user constitutes financial activity. See Exhibit-1012 at ( The cited entities may not provide typical financial services, but... they do sell digital content, which is the financial activity recited in claim 1 ). The specification of the 598 Patent, moreover, is replete with examples of financial activity, stating that payment data forwarded to a payment validation system may be data relating to an actual payment made to the data supplier, or... a record of a payment made to an e- payment system that can be coupled to banks. See 598 at 6:60-64, 7

14 13: Even if claim 7 did not explicitly reference financial activity, and it does, this description alone would be sufficient to establish that the claimed method is a method for performing data processing used in the practice, administration, or management of a financial product or service and that, therefore, the 598 Patent is a CBM patent. See Exhibit-1012 at 5, 6 (determining, based on a specification statement that embodiments of the present invention have application to a wide range of industries including financial services, despite the apparent lack of financial-related language in the claims); see also Exhibit-1013 at 9-15 ( Although claim 8 does not expressly refer to financial activity... When applied to the activities listed [in the patent s specification]... the method of claim 8 represents a financial product or service ). Thus, for at least the reasons described above, the 598 Patent is a CBM patent that is eligible for the review requested by Petitioner. E. The 598 Patent Is Not Directed to a Technological Invention, And Thus, Should Not Be Excluded From the Definition of a CBM Patent. The AIA excludes patents for technological inventions from the definition of CBM patents. AIA 18(d)(2). To determine when a patent covers a technological invention, the following will be considered on a caseby-case basis: whether the claimed subject matter as a whole recites a 8

15 technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution. 37 C.F.R (emphasis added); see also Exhibit-1009 at (USPTO clarified that to qualify as a technological invention, a patent must have a novel, unobvious technological feature and a technical problem solved by a technical solution). [A]bstract business concepts and their implementation, whether in computers or otherwise, are not included in the definition of technological inventions. Exhibit-1010 at 634. Indeed, Congress has explained that accomplishing a business process or method is not technological, whether or not that process or method is novel. See id. Finally, to institute a CBM, a patent need only have one claim directed to a covered business method, and not a technological invention. See, e.g., Exhibit-1009 at The claims of the 598 Patent fail to recite a novel and unobvious technological feature, and fail to recite a technical problem solved by a technical solution. See Bloom at, e.g., 24. Thus, the patent is subject to Section 18 review. Although the independent claims of the 598 Patent recite computer-related terms such as non-volatile memory, data terminal, and data carrier, Congress has explained that simply reciting words describing generic technology such as computer hardware,...software, memory, 9

16 computer-readable storage medium, [or] databases does not make a patent a technological invention. Exhibit-1010 at 634. The specification of the 598 Patent confirms that the computer-related terms recited in the 598 Patent s claims relate to technology that is merely, in the words of the Patent Owner, conventional : the specification states, for example, that [t]he data access terminal may be a conventional computer or, alternatively, it may be a mobile phone that terminal memory can comprise any conventional storage device, and that a data access device... such as a portable audio/video player... comprises a conventional dedicated computer system including a processor... program memory... and timing and control logic... coupled by a data and communications bus. 598 at 4:4-5, 16:46-53, 18:7-11. Consequently, the `598 Patent claim is not transformed into a technological invention by their recitation of these computer-related terms. The 598 Patent fails even to recite a technical problem, and instead addresses the non-technical task of allowing owners of... data to make the data available themselves over the internet without fear of loss of revenue... undermining the position of data pirates. 598 at 2:11-15, 5: The 598 Patent s solution to this non-technical problem is nothing more the combination of prior art structures to achieve a normal, expected, and predictable result: the use of a data supply system, content provision 10

17 system, data terminal and data carrier to restrict access to data based on payment. See, e.g., 598 at Abstract, 13: A teaching of a combination of prior art structures that achieves a predictable result does not render a patent a technological invention. Exhibit-1009 at Indeed, [a] person having ordinary skill in the art at the time that the 598 Patent was filed would not have considered the methods described and claimed by the 598 Patent to be technical. Bloom at, e.g., 24. In sum, the AIA s exclusion of patents for technological inventions from the definition of CBM patents is not applicable here because the 598 Patent fails to recite a novel and unobvious technological feature, and fails to recite a technical problem solved by a technical solution. CBM review is therefore appropriate for the 598 Patent. IV. SUMMARY OF THE 598 PATENT A. Brief Description The 598 Patent includes 41 claims, of which claims 1, 18, 21, 26, 27, 29, 31 and 35 are independent. The claims of the 598 Patent generally relates to systems and methods for downloading and paying for data such as audio and video data, text, software, [and] games at Abstract. The 598 Patent purports to address a specific problem: the growing prevalence of so- 11

18 called data pirates who obtain data either by unauthorized or legitimate means and then make this data available essentially world-wide over the internet without authorization. 598 at 1: Within this context, the 598 Patent describes combining digital right management with content data storage, and states that [b]inding the data access and payment together allows the legitimate owners of the data to make the data available themselves over the internet without fear of loss of revenue, thus undermining the position of data pirates. 598 at 2:7-11, 5: Specifically, the 598 Patent also discloses a portable data carrier for storing and paying for data. 598 at 1: The portable data carrier stores, in a parameter memory, use rules that are used to control access to content data and, in a content memory, the portable data carrier stores content data. See 598 at Figs. 5-6, 13: This disclosure is reflected in the limitations of independent claims 1 and 31, the latter of which recites reading the use status data and one or more use rules from parameter memory... evaluating the use status data using the one or more use rules to determine whether access to the content data item is permitted at 28:

19 B. Summary of the Prosecution History of the 598 Patent The 598 Patent issued Nov. 22, 2011 from the 541 Appln. (Exhibit 1025), which was filed on Jan. 24, 2011 with 41 claims. During prosecution of the 541 Appln., a Non-Final Office Action rejected claims 1, 21, and on the ground of nonstatutory obviousnesstype double patenting as being unpatentable over claims of U.S. Patent No. 7,334,720. See Non-Final Office Action of April 14, 2011 at 3 and 7-8. Claims 9, 18, 23-30, were rejected on the same double patenting ground over claims of the 720 patent in view of U.S. Patent No. 6,415,156 to Stademann. Id. Dependent claims 10, 12-14, and were deemed to contain allowable subject matter. Id. Subsequently, the Patent Owner filed a Terminal Disclaimer (TD) without substantive amendments. See Patent Owner s Response May 20, 2011 at 9. After the Power of Attorney has been duly corrected, the Patent Office accepted the Terminal Disclaimer and mailed a Notice of Allowance to allow all pending claims, noting that the prior art fails to disclose a portal data carrier comprising: (i) an interface for reading and writing data; (ii) a content data memory; (iii) a use rule memory; (iv) a program store; and having the functions and characteristics as recited in claim 1. The prior art also fails to disclose the limitations of claims 18, 21, 26, 27, 31 and 35. See Notice of Allowance September 12, 2011 at 2. After 13

20 allowance, formality errors in claims 26 and 29 were corrected. See Patent Owner s Amendment under Rule 312 Oct. 19, C. OMITTED V. DEMONSTRATION OF A REASONABLE LIKELIHOOD THAT AT LEAST ONE CLAIM OF THE 598 PATENT IS UNPATENTABLE Claim 7 is challenged. Claim 7 depends from claim 1 and, therefore, incorporates the subject matter of claim 1. As demonstrated below, claim 7 is directed toward ineligible subject matter. A. GROUND 1 Claim 7 is Patent-Ineligible under 35 U.S.C. 101 For Abstractness 1. Legal Standard Laws of nature, abstract ideas and natural phenomena cannot be patented. Mayo Collaborative Serv v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). Allowing patents on such matters would effectively grant impermissible monopolies over entire concepts. See, e.g., Gottschalk v. Benson, 409 U.S. 63, (1972). Thus, when claims of a patent recite abstract ideas, such as those that can be performed in the human mind, or by a human using a pen and paper, and those that preempt an entire concept or field, they must add significantly more to be patent-eligible. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 14

21 207); See also Mayo, 132 S. Ct. at 1294; Bilski v. Kappos, 130 S. Ct. 3218, 3230 (2010). As the Supreme Court recently reiterated, mere recitation of a particular technological environment does not make eligible a claim that is otherwise improperly abstract. Alice Corp. v. CLS Bank Internationa1,134 S. Ct. 2347, 2358 (2014) (quoting Bilski at 3230). Nor does addition of insignificant post solution activity or well-understood, routine, conventional activity. Mayo at 1291 (quoting Bilski at 3230), 1294, Instead, a claim involving an unpatentable abstract idea must contain other elements or a combination of elements, sometimes referred to as the inventive concept, sufficient to prevent patenting the underlying idea itself. Mayo at 1294 (internal quotations omitted). One indication that a claim recites more than an abstract idea is that it is tied to a particular machine or apparatus or transform[s] a particular article into a different state or thing. Bilski at An abstract claim is not salvaged, however, by claiming only its performance by computers, or by claiming the process embodied in program instructions on a computer readable medium. CyberSource at Instead, to impart patent-eligibility to otherwise unpatentable subject matter under the theory that the [claimed subject matter] is linked to a 15

22 machine, the use of the machine must impose meaningful limits on the claim s scope. Id. at 1369 (internal quotations omitted); see also Bancorp Serv., L.L.C. v. Sun Life Assur. Co. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) ( To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not ). Using a computer for no more than its most basic function making calculations or computations fails to circumvent the prohibition against patenting abstract ideas and mental processes. Id. As such, and as explained below, the mere fact that claim 7 of the 598 Patent incorporates a portable data carrier, an interface, various memory, a program store, and processor, does not salvage this otherwise patent ineligible claim. the 598 Patent itself repeatedly describes its computing systems as both conventional and as being used in a conventional manner. See, e.g., 598 at 4:4-5, 16:46-49, 21: As explained in detail below, claim 7 of the 598 Patent recites and impermissibly preempts an abstract idea that can be performed in the human mind and by paper and pen, namely the abstract idea of enabling limited use of paid for/licensed content, without being tied to a particular machine and without transform[ing] a particular article into anything different. 16

23 2. Claim 7 of the 598 Patent Recites an Abstract as Each of the Limitations Can be Performed in the Human Mind and by a Human Using a Pen and Paper Claim 7, by virtue of dependence on base claim 1, requires the following limitations: (i) an interface for reading and writing data, (ii) use rule memory to store one or more use rules, (iii) program store storing code for storing at least one content data item in the content data memory and at least one use rule in the use rule memory (iv) a processor, and (v) payment data memory to store payment data and code to provide the payment data to a payment validation system. See 598 Patent, claim 7 (Samsung-1001). From the plain claim language, the conclusion is inescapable that the recited components performing the actions merely describe an abstract idea, namely, the abstract idea of enabling limited use of paid-for/licensed content, i.e., paid for, and that copyright requirements regulate how content can be used (e.g., ASCAP use rights for music radio stations). This is precisely the type of abstract idea that is not patentable under 35 U.S.C. 101, among other reasons, because it can be performed in the human mind, or by a human using a pen and paper, and entirely without the use of a computer. Cybersource, 654 F.3d at In that regard, relevant limitations of claim 7 are discussed in turn: (i) interface for reading and writing data 17

24 This action of reading and writing self-evidently can be performed by a human reading paper and writing using a pen. Moreover, that claim 7 recites these features is immaterial because the mere recitation of basic, wellknown technology components in claim does not add anything more than a well-understood, routine, conventional element to an abstract idea. See Mayo, 132 S. Ct. at (ii) use rule memory to store one or more use rules Leveraging memory for use rules involves nothing more than a mental activity that has been done for decades, e.g., by radio stations required to comply with CARP and CRT in order to avail themselves of compulsory licenses. Bloom at, e.g., (referencing statutory compulsory licenses and PROs). In particular, this was done by a board operator, i.e., a human, in order to provide the requisite documentation. Bloom at, e.g., 124 (describing a programming director as planning the schedule of segments, which may be subject to copyright); see also Michael C. Keith, The Radio Station (8th ed. 2009). As such, using rule memory to store one or more use rules is a mental process that can be performed by a human, and without the use of a computer. This is true even though the claim recites the use of use rules. As such, the recited modules are nothing more than an attempt to render claim 7 patent eligible by adding standard computer technology. See Cybersource,

25 F.3d at 1375 ( an abstract idea is not changed by... claiming the process embodied in program instructions on a computer readable medium. ). The specification underscores the fact that this claimed configuration can be performed by a human using thought, manual actions, pen and paper. Bloom at, e.g., 126. Specifically, the specification reveals no description of the receiving step; it is instead devoid of any additional description or disclosure of any technical operations relating to the receiving step. Bloom at, e.g., 127 and 128. Moreover, none of the activities identified in the specification corresponding to this claim element require the use of a computer, but rather can be performed in the human mind or by a human using the conventional pen-and-paper process that was performed by countless radio station board operators. (iii) program store storing code for storing at least one content data item in the content data memory and at least one use rule in the use rule memory As noted above, storing code to administer copyright restrictions is an action that was performed for decades by radio station board operators without computerized transmission. Bloom at, e.g., 125. For example, a board operator could read (or learn) the copyright requirements and keep a reporting diary as a paper-and-ink system, steps that did not require any computer transmission. As with the above actions, the fact that the claim 19

26 recites an electronic use of use rules does save the claim from patent ineligibility as the mere recitation of basic technology components in claim 7 does not add anything more than a well-understood, routine, conventional element to an abstract idea. See Mayo, 132 S. Ct. at Again, the specification describes that only conventional components are employed. Bloom at, e.g., 124 and 125. (iv) a processor Recitation of a general purpose processor to encompass an abstract idea does not redeem ineligible subject matter since all of the actions recited in claim 7 either can be performed in the human mind, or by a human using a pen and paper, entirely without the use of a computer. Cybersource, 654 F.3d at And, as addressed below, even assuming arguendo that the express language of claim 7 literally requires the use of computers, none of claim 7 s features meaningfully limit its the scope since they are well-understood, routine, conventional elements. See Mayo, 132 S. Ct. at (v) payment data memory to store payment data and code to provide the payment data to a payment validation system Using payment data memory to store payment data that can be used to pay for copyrighted content mimics what copyright users have had to do for decades in order to comply with their requirements imposed by CARP 20

27 and CRT in order to avail themselves of compulsory licenses. This was typically done on a station-by-station basis by the program director. Bloom at, e.g., 125. As such, using payment memory data to store payment data is a mental process that can be performed by a human, and without the use of a computer. This is true even though the claim recites the use of making payments to a payment validation system. As such, the recited modules are nothing more than an attempt to render claim 7 patent eligible by adding standard computer technology. See Cybersource, 654 F.3d at 1375 ( an abstract idea is not changed by... claiming the process embodied in program instructions on a computer readable medium. ). 3. Claim 7 of the 598 Patent Recites an Abstract as it Preempts All Effective Uses of the Abstract Idea of Enabling Limited Use of Paid-for/Licensed Content For similar reasons, claim 7 of the 598 Patent is invalid under the preemption rationale of Mayo. In that regard, they are much like the claims found invalid by the Federal Circuit in Accenture Global Services, GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013). Claim 1 there recited a system for generating tasks to be performed in an insurance organization, comprising an insurance transaction database, a client component, and a server component, each of which recited carrying out particular operations. 21

28 The Federal Circuit found the claims invalid (even under a clear and convincing evidence standard, and on summary judgment, where all fact issues must be taken in favor of the patentee) because they fail to include limitations that set them apart from the abstract idea of handling insurance related information [id. at 1344] despite the claim reciting client and server components, a transaction database, and a number of terms reciting particular operations performed by the system (e.g., having a claim folder in the database that is decomposed into a plurality of levels, a task library database for storing rules for determining tasks to be completed upon an occurrence of an event, enabling access by an assigned claim handler, and triggering an event processor... by application events associated with a change in [] information [provided by the client component], among other things. In like manner, claim 7 of the 598 Patent is invalid because it does not add any limitations that set it apart from the abstract idea of enabling limited use of paid-for/licensed information. Although the specification describes software modules, data memory, and processors, these are nothing more than (and actually less than) the recitation of a client component and a server component in Accenture. The Federal Circuit in Accenture also rejected the arguments that application in a computer 22

29 environment and within the insurance industry saved the Accenture claims, because simply implementing an abstract concept on a computer, without meaningful limitations to that concept, does not transform a patentineligible claim into a patent-eligible one. Id. at 15 (citing Bancorp, 687 F.3d at 1280). In a similar manner, the recitation of basic, well-known computer modules and terminology in claim 7 of the 598 Patent does not add anything meaningful that would prevent claim 7 from effectively preempting all relevant uses of the general idea of enabling limited use of paid-for/licensed content. 4. Claim 7 of the 598 Patent is Not Tied to a Particular Machine in any Manner that Would Make Claim 7 Patent-Eligible That claim 7 of the 598 Patent purports to be limited to a portal data carrier with memory and a processor does not make it tied to a particular machine, nor does it otherwise promote patent eligibility. First, as explained above, the claim is not tied to a particular machine because it can be performed in the human mind, or by a human using a pen and paper. Cybersource, 654 F.3d at To the extent some language in the claim 7 is deemed to require computer implementation, mere inclusion of a general purpose computer, without more, is insufficient to satisfy the machine or transformation test. See e.g., Dealertrack, Inc. v. 23

30 Huber, 674 F.3d 1323, (Fed. Cir. 2012) ( [S]imply adding a computer aided limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible. ). Though the specification describes a clearinghouse, claim 7 simply does not do anything further than regulate access to content as was typically required by groups such as ASCAP, BMI, CARP, and CRT. Bloom at, e.g., Second, [t]o salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not. Bancorp, 687 F.3d at 1278; see also SiRF Tech., Inc. v. Int l Trade Comm n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Although the preamble of claim 7 recites a portable data carrier, nothing in the body of claim 7 establishes that a computer is integral to performance of the claimed functionality. To the contrary, as discussed above, the functionality in the claim has long been performed by human activity, without the use of computers. Simply [u]sing a computer to accelerate an ineligible mental process, does not make that process patent-eligible. Bancorp, 687 F.3d at Moreover, the Federal Circuit has consistently found claims containing language similar to that in the 598 Patent insufficient to impart 24

31 patent-eligibility. For example, in Dealertrack, claims to a method of applying for credit were found insufficient under 101 even though the claims contained a limitation requiring the invention to be computer aided. 674 F.3d at The court explained that [t]he claims [were] silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method. Id. at In Dealtracker, the Federal Circuit therefore concluded that [s]imply adding a computer aided limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible. Id. Likewise, claim 7 of the 598 Patent is silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method. Dealertrack, 674 F.3d at 1333; see also Ex at 65. As such, just as the Federal Circuit determined in a computer clearly is not integral to claim 7 of the 598 Patent, and the claim must be deemed unpatentable under 101. Id. 25

32 5. Claim 7 of the 598 Patent Does Not Transform Anything in any Manner that Would Make it Patent-Eligible A claim is patent-eligible under 101 if it transforms a particular article into a different state or thing. In re Bilski, 545 F.3d at 954. Claim 7 of the 598 Patent performs no such transformation. As explained above, claim 7 requires the following steps: (i) interface for reading and writing data, (ii) use rule memory to store one or more use rules, (iii) program store storing code for storing at least one content data item in the content data memory and at least one use rule in the use rule memory (iv) a processor, and (v) payment data memory to store payment data and code to provide the payment data to a payment validation system. None of these steps transforms an article into a different state or thing. Claim 7 recites the following objects and corresponding actions, none of which involve transformation of the recited item: Interface for reading and writing data Content data memory storing one or more content data items Use rule memory to store one or more use rules Program store code storing Processor implementing code 26

33 Payment data memory to store payment data and code to provide the payment data to a payment validation system As indicated, none of the claim 7 items are transformed or altered in any manner by the actions recited relative thereto. Bloom at, e.g., For instance, while the interface and the processor perform certain steps in the first instance, these systems in no way transforms it into a different state or thing. In re Bilski, 545 F.3d at 954. Not only does the claim itself not recite any form of transformation, but the specification also does not describe any further modification of the objects. Accordingly, as is readily apparent, there is not a hint or suggestion of any article in claim 7 being transformed into a different state or thing in any way. In sum, claim 7 of the 598 Patent fails to meet the transformation test. B. OMITTED VI. CONCLUSION Petitioner respectfully requests institution of a CBM for those claims of the 598 Patent for the grounds presented herein. 27

34 Respectfully submitted, Dated: April 30, 2015 /J. Steven Baughman/ J. Steven Baughman (Lead Counsel) Reg. No. 47,414 Megan Raymond (Backup Counsel) Reg. No. 72,997 Ropes & Gray LLP One Metro Center, th St. Ste. 900 Washington, D.C P: / F: Ching-Lee Fukuda (Backup Counsel) Reg. No. 44,334 Ropes & Gray LLP 1211 Avenue of the Americas New York, NY P: / F: Attorneys for Petitioner 28

35 CERTIFICATION OF SERVICE Pursuant to 37 CFR 42.6(e)(4)(i) et seq. and (b), the undersigned certifies that on April 30, 2015, a complete and entire copy of this Petition for Covered Business Method Patent Review and all supporting exhibits were provided by Express Mail, cost prepaid, Label No. EF US, to the Patent Owner by serving the correspondence address of record as follows: Davidson Berquist Jackson & Gowdey LLP 8300 Greensboro Dr, Suite 500 McLean, VA /Lauren N. Robinson / Lauren N. Robinson Ropes & Gray LLP 1900 University Ave., 6 th Floor East Palo Alto, CA (650)