PTAB

CBM2013-00020

Apple Inc v. SightSound Technologies LLC

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Petition
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1. Case Identification

2. Patent Overview

  • Title: Method for Transmitting a Desired Digital Video or Audio Signal
  • Brief Description: The ’573 patent describes a method for the electronic sale and transmission of a digital audio or video signal. The method involves a buyer electronically transferring money to a seller, connecting the seller's and buyer's memories via a telecommunications line, transmitting the digital signal, and storing it in the buyer's memory.

3. Grounds for Unpatentability

Ground 1: Anticipation over the CompuSonics System - Claims 1, 2, 4, and 5 are anticipated under 35 U.S.C. § 102 by the CompuSonics System.

  • Prior Art Relied Upon: The CompuSonics System, a publicly disclosed system for the sale and distribution of digital audio and video, as evidenced by numerous documents including a Billboard article (Oct. 5, 1985), a 1984 letter to shareholders, and a 1987 Stanford lecture.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that the CompuSonics System, described publicly as an "electronic record store" well before the patent's priority date, disclosed every element of the challenged claims. Independent claim 1 is met because the system enabled consumers to purchase digital recordings from a remote database (a first memory) over telecommunication lines, with payment via credit card ("transferring money electronically"). The system connected the remote database with a consumer's local recorder/player (a second memory) to transmit the digital signal, which was then stored on a local disk (e.g., a "SuperFloppy"). Claims 4 and 5, directed to video signals, were anticipated because CompuSonics explicitly extended its system to the distribution of digital music videos.
    • Key Aspects: The petitioner contended that the CompuSonics System was a fully realized, publicly demonstrated commercial effort that performed the exact method claimed in the ’573 patent, including the separation of parties (seller and buyer) and locations that the Patent Owner previously used to overcome prior art during prosecution.

Ground 2: Obviousness over Synth-Bank - Claims 1, 2, 4, and 5 are obvious under 35 U.S.C. § 103 over the Synth-Bank system.

  • Prior Art Relied Upon: Synth-Bank (a 1986 article in Electronic Musician), the Synth-Bank Royalty Agreement (Feb. 1986), the Synth-Bank Trademark Registration (first use in commerce Oct. 1985), and a Synth-Bank advertisement.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that the Synth-Bank system, standing alone, rendered the claims obvious. Synth-Bank was described as an "on-line shopping service" where users could purchase and download digital sound files using a personal computer and modem. This inherently taught a method of transferring money (via a shopping service), electronically connecting a seller's memory (the Synth-Bank database) with a buyer's memory (the user's computer) over telecommunication lines, transmitting the purchased file, and storing it. The dependent claims were obvious as searching and selecting a desired file are inherent steps in any online purchasing system.
    • Motivation to Combine (for §103 grounds): The petitioner argued that the primary Synth-Bank article rendered the claims obvious on its own. The additional references (trademark filings, advertisements, royalty agreements) were not combined to supply missing elements but to confirm the inherent features and public nature of the same, single Synth-Bank system. A POSITA would be motivated to consider these documents together as they all described the same commercial service.
    • Expectation of Success: A POSITA would have had a high expectation of success, as the Synth-Bank article and related materials described a system that was already operational and available to the public for purchasing and downloading digital audio files.

4. Key Claim Construction Positions

  • "telecommunication[s] lines": Petitioner argued this term should be construed as "an electronic medium for communicating between computers." This construction is broader than the "telephone lines" originally disclosed and was adopted by the applicant during prosecution. This broader meaning was critical for applying prior art systems that might use various network types.
  • "transferring money electronically": Petitioner construed this to mean "providing payment electronically." This construction was based on the inventor's own declaration during prosecution, which stated that an "electronic sale" inherently assumes transferring money by providing an account or credit card number, a well-known practice at the time.
  • "first party" / "second party": Consistent with a district court ruling, Petitioner construed these terms to mean "a first entity" and "a second entity," respectively. This construction emphasizes the transactional nature of the method between a distinct seller and buyer, a feature Petitioner argued was well-known in the prior art.

5. Relief Requested

  • Petitioner requested institution of a Covered Business Method Patent Review and cancellation of claims 1, 2, 4, and 5 of the ’573 patent as unpatentable.