PTAB

CBM2013-00023

Apple Inc v. SightSound Technologies LLC

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Petition
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1. Case Identification

2. Patent Overview

  • Title: System and Method for Transmitting Desired Digital Video or Digital Audio Signals
  • Brief Description: The ’440 patent describes a method for the electronic sale and distribution of digital content. The method involves a first party (seller) and a second party (buyer) establishing a connection over telecommunications lines to sell, charge for, and transfer digital audio or video signals from the seller's memory to the buyer's memory for storage and playback.

3. Grounds for Unpatentability

Ground 1: Anticipation over the CompuSonics System - Claims 1, 64, and 95 are anticipated under 35 U.S.C. §102 by the CompuSonics system.

  • Prior Art Relied Upon: The CompuSonics system, a publicly disclosed system for digital audio and video distribution demonstrated and documented between 1984 and 1987 through press releases, technical papers, shareholder letters, and public lectures.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that the CompuSonics system, commercialized years before the patent's priority date, disclosed every element of the challenged claims. The system was described as a "dial-up electronic record store" that allowed consumers to purchase digital recordings of their favorite artists directly from a production studio's database. The system explicitly taught forming a connection over telephone or cable lines between a seller's database (first memory) and a consumer's home recorder/player (second memory). It disclosed the electronic sale of digital audio and video, including using credit cards to charge for purchases over the phone. The system transferred the purchased digital content to the consumer's device, which stored it on non-volatile media like floppy disks or optical disks (not a tape or CD) for subsequent playback. The consumer's recorder/player was located in their home, in their possession and control, remote from the seller.
    • Key Aspects: Petitioner contended that CompuSonics was not just a concept but a publicly demonstrated system that embodied the entire claimed method, from remote electronic purchase to local storage and playback.

Ground 2: Obviousness over Synth-Bank - Claims 1, 64, and 95 are obvious under 35 U.S.C. §103 over the Synth-Bank system.

  • Prior Art Relied Upon: The Synth-Bank system, as disclosed in a 1986 article in Electronic Musician ("Synth-Bank article"), a 1986 royalty agreement, a U.S. Trademark Registration, and a related advertisement.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Synth-Bank was an online software database of commercial and public domain sound files accessible to users via personal computer and modem. The Synth-Bank article explicitly described it as an "on-line shopping service where users can purchase specific sound files." This taught the core elements of the claims: a seller (Synth-Bank) providing digital audio signals from its memory, a buyer (user) at a remote location, a connection over telecommunication lines (dial-up via modem), electronic selling (purchasing sound files), and transferring the files for download. The downloaded files would necessarily be stored in the user's computer memory (a non-volatile hard drive or floppy disk) for use. The system also disclosed charging a fee, with files being "priced roughly at a dollar per sound."
    • Motivation to Combine: Petitioner argued the claims were obvious over the Synth-Bank article alone. Alternatively, a person of ordinary skill in the art (POSITA) would have been motivated to look to the related Synth-Bank trademark documents and advertisements to understand the full scope of the commercially offered system. These documents confirmed that the service involved providing computerized access to and download of "synthetized and digitized sounds and music," reinforcing the teachings of the main article.
    • Expectation of Success: As Synth-Bank was a functioning, publicly available online service, a POSITA would have had more than a reasonable expectation of success; they would have had knowledge of a successfully implemented system for the electronic sale and download of digital audio files.

4. Key Claim Construction Positions

  • Petitioner proposed, for the purposes of the review, adopting the claim constructions from a concurrent district court proceeding involving the same patent. Key proposed constructions included:
    • "selling electronically": Providing a product or service electronically in exchange for providing payment electronically. Petitioner argued its own prior admissions during prosecution confirmed that an "electronic sale" inherently assumes transferring money for a product via telecommunications lines.
    • "second party control unit": A control unit of the second party, which could be a general-purpose computer.
    • "non-volatile storage portion … not a tape or CD": The petition's prior art (e.g., CompuSonics) disclosed storage on floppy disks, hard disks, and optical WORM disks, which meet this limitation.

5. Key Technical Contentions (Beyond Claim Construction)

  • Petitioner's central technical contention was that the ’440 patent claimed no actual technological invention. It argued the patent merely recited a method for conducting electronic sales using a collection of conventional, commercially available hardware (computers, hard disks, telephone lines, speakers) without disclosing any specific, novel, or non-obvious algorithm or technical implementation. The patent specification itself was cited as conceding that the components were "already commercially available," underscoring the argument that the claims were directed to an abstract business idea rather than a technological solution to a technical problem.

6. Relief Requested

  • Petitioner requested the institution of a Covered Business Method Patent Review and the cancellation of claims 1, 64, and 95 of Patent 5,966,440 as unpatentable under 35 U.S.C. §§ 102 and 103.