PTAB

CBM2014-00103

Apple Inc v. Smartflash LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Data Storage and Access Systems
  • Brief Description: The ’221 patent relates to systems and methods for managing access to data stored on a portable data carrier. The disclosed method involves reading payment data from the carrier, forwarding the payment data to a validation system, retrieving content from a data supplier upon validation, and writing the retrieved content to the data carrier.

3. Grounds for Unpatentability

Ground 1: Obviousness over Ginter and Poggio - Claims 1, 2, 11-14, and 32 are obvious over Ginter in view of Poggio.

  • Prior Art Relied Upon: Ginter (Patent 5,915,019) and Poggio (European Patent Application # EP0809221A2).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Ginter discloses a secure "virtual distribution environment" (VDE) where a portable electronic appliance (PEA) stores and accesses digital content subject to electronic rights protection. While Ginter teaches a complete system, Poggio was cited for its specific disclosure of a "virtual vending machine" that processes electronic payments, such as by receiving a credit card number, forwarding it to a validation system, and providing access to licensed data only upon receiving payment confirmation. Petitioner contended that Poggio’s method of payment validation supplies the specific transactional steps recited in the challenged claims.
    • Motivation to Combine: A POSITA would combine Poggio’s well-understood transactional method with Ginter’s secure content distribution system to create a more commercially viable product. The combination would mirror traditional commercial exchanges (pay first, then receive goods), a familiar model for consumers, and would advantageously facilitate secure, impulse purchases of digital content, a known objective in the field.
    • Expectation of Success: Petitioner asserted that combining a known payment processing method (Poggio) with a known secure content delivery architecture (Ginter) was a predictable integration of established technologies. A POSITA would have had a high expectation of success in implementing Poggio's payment model within Ginter's framework.

Ground 2: Obviousness over Ginter and Stefik - Claims 1, 2, 11-14, and 32 are obvious over Ginter in view of Stefik.

  • Prior Art Relied Upon: Ginter (Patent 5,915,019) and Stefik (collectively Patent 5,530,235 and Patent 5,629,980).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Stefik discloses a "DocuCard," a transportable, card-based repository for storing and controlling access to digital works based on associated "usage rights." The DocuCard itself contains a processor for managing access and could store credit information for billing, thus teaching a portable data carrier that performs the claimed functions. Stefik’s system teaches reading payment data by, for example, activating a credit account upon a user logging into the DocuCard.
    • Motivation to Combine: A POSITA would have been motivated to implement Ginter’s VDE using the advantageous features of Stefik's DocuCard. Incorporating Stefik’s teachings, such as using a removable card with an integrated screen, would provide Ginter's portable appliance with improved features and a better user experience. This would predictably increase the user base of the VDE, a clear commercial motivation.
    • Expectation of Success: The integration of Stefik's specific hardware embodiment (a removable DocuCard) into Ginter's more general VDE architecture was presented as a straightforward application of known design principles, carrying a high expectation of success.

Ground 3: Obviousness over Ginter, Poggio, and Stefik - Claims 1, 2, 11-14, and 32 are obvious over Ginter in view of Poggio and Stefik.

  • Prior Art Relied Upon: Ginter (Patent 5,915,019), Poggio (European Patent Application # EP0809221A2), and Stefik (collectively Patent 5,530,235 and Patent 5,629,980).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground asserted that the combination of the three references discloses every limitation of the challenged claims. Ginter provides the foundational VDE architecture, Stefik provides an advanced, self-contained portable data carrier (the DocuCard) for securely storing content and payment information, and Poggio provides the specific, conventional e-commerce model of using a credit card for payment authorization and validation before content delivery.
    • Motivation to Combine: Petitioner argued a POSITA would combine these references to create a comprehensive and robust commercial system. The motivation was to use Stefik's DocuCard as the physical data carrier within Ginter's VDE and implement Poggio's payment process for transactions. This combination would achieve the goal of enabling users to easily and securely purchase content on a portable device, leveraging the strengths of each reference.
    • Expectation of Success: Combining a known payment system (Poggio) and a known portable repository (Stefik) within a known content distribution architecture (Ginter) was argued to be a predictable convergence of technologies with a clear path to successful implementation.

  • Additional Grounds: Petitioner asserted additional obviousness challenges based on Ginter alone and Ginter in view of Sato, but relied on similar arguments for combining known digital rights and payment systems.

4. Key Claim Construction Positions

  • "payment data": Petitioner proposed construing this term to mean "data representing payment made for requested content data." This construction was intended to distinguish payment data from more general "access control data" and to clarify that the prior art, which discloses transmitting credit card numbers or audit information reflecting payment, squarely meets this limitation.

5. Key Technical Contentions (Beyond Claim Construction)

  • Petitioner contended that the ’221 patent is a "Covered Business Method" patent because it claims a financial method and is not a true "technological invention." The core argument was that the claims recite the abstract business practice of selling data in exchange for payment, implemented using generic and well-known hardware components (e.g., smart cards, processors, networks). Petitioner argued the patent addresses the business problem of data piracy, not a technical problem, and therefore does not meet the criteria for a technological invention.

6. Relief Requested

  • Petitioner requests institution of a Covered Business Method (CBM) patent review and cancellation of claims 1, 2, 11-14, and 32 of the ’221 patent as unpatentable.