PTAB

CBM2014-00104

Apple Inc v. Smartflash LLC

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Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Data Storage and Access Systems
  • Brief Description: The ’720 patent relates to systems and methods for controlling access to data on a portable data carrier. The technology involves reading payment data from the carrier, forwarding it for validation, retrieving content from a supplier, and then writing both the content and associated access rules, which are dependent on the payment amount, onto the carrier.

3. Grounds for Unpatentability

Ground 1: Obviousness over Stefik in view of Poggio - Claims 3, 11, and 13-15 are obvious over Stefik in view of Poggio.

  • Prior Art Relied Upon: Stefik (collectively, Patent 5,530,235 and Patent 5,629,980) and Poggio (European Application # EP0809221A2).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Stefik taught the foundational system for controlling digital content distribution using secure "repositories" (analogous to the claimed data access terminal) and portable "DocuCards" (data carriers) with attached "usage rights" (access rules). Stefik disclosed a framework where these repositories could request and provide content to each other. However, Petitioner contended that Poggio more explicitly taught a "virtual vending machine" for managing the sale, licensing, and rental of electronic data. Poggio disclosed specific mechanisms for point-of-sale electronic payment, receiving payment validation data (e.g., confirmation from a banking network), and then providing the licensed digital product. Petitioner asserted that Poggio’s teachings supplied any specific payment processing or rule-setting limitations not explicitly detailed in Stefik.
    • Motivation to Combine: A POSITA would combine Stefik and Poggio to improve the commercial viability and efficiency of Stefik’s content distribution system. Both references addressed the common problem of securely distributing digital content while ensuring creators are compensated. Petitioner argued that incorporating Poggio’s automated virtual vending machine and its clear payment validation processes into Stefik’s repository framework would provide a more robust and streamlined commercial system. It would facilitate transactions with minimal vendor intervention and provide requesters with a central point for content access, which was a recognized goal in the art.
    • Expectation of Success: A POSITA would have a reasonable expectation of success because both systems operated in the same technical field of digital rights management (DRM) and relied on conventional distributed computer networks. Integrating Poggio’s payment module into Stefik’s content repository system involved applying known software and networking principles to achieve the predictable result of a commercially functional DRM platform.

Ground 2: Obviousness over Stefik in view of Sato - Claims 1, 3, 11, and 13-15 are obvious over Stefik in view of Sato.

  • Prior Art Relied Upon: Stefik (collectively, Patent 5,530,235 and Patent 5,629,980) and Sato (JP Application # H11-164058).

  • Core Argument for this Ground:

    • Prior Art Mapping: As in the first ground, Petitioner relied on Stefik to teach the core DRM system of secure repositories and portable data carriers with usage rights. Sato was introduced to teach the specific application of such technology in the context of portable, mobile devices. Sato disclosed a "Portable Music Selection and Viewing System" that stored media content, downloaded from a distribution center, onto a removable IC card (a data carrier) for playback on a mobile device. Petitioner argued that Sato explicitly taught storing and accessing content on a portable device, a key aspect of the challenged claims.
    • Motivation to Combine: A POSITA would combine Stefik’s robust DRM framework with Sato’s mobile implementation to meet the known market demand for portable media consumption. Because both references involved storing and providing access to digital content on user devices, applying Stefik’s security and access control methods to the mobile environment taught by Sato was a logical and predictable design choice. A POSITA would have recognized that Sato’s cellular phone could be readily adapted to function as a Stefik repository, thereby making Stefik’s secure content distribution system available on the go.
    • Expectation of Success: Success was expected as the combination merely involved programming Sato's mobile device, which already used a removable memory card, to implement the known software-based access control rules disclosed by Stefik. This was a straightforward application of one known technology (DRM) to a known and suitable platform (mobile devices).

  • Additional Grounds: Petitioner asserted that claims 1, 3, 11, 13, and 14 are anticipated by Stefik alone under 35 U.S.C. §102. Petitioner also asserted additional obviousness challenges based on combinations including Maari (JP Application # H10-269289), which taught user notifications for content access, and three-way combinations of Stefik, Poggio, and Sato.

4. Key Claim Construction Positions

  • "payment data" (Claims 3, 11, 13-15): Petitioner proposed this term be construed as "data representing payment made for requested content data," distinct from general access control data. This construction was argued to be consistent with the specification's focus on commercial transactions and validating payments for content.
  • "supplementary data" (Claim 11): Petitioner proposed construing this term to mean "advertising data, customer reward management data, and hot links to web sites." Petitioner argued this construction was based on the explicit examples provided in the ’720 patent’s specification and that a broader interpretation would render the term indefinite.

5. Relief Requested

  • Petitioner requested institution of a Covered Business Method Patent Review and cancellation of claims 1, 3, 11, and 13-15 of the ’720 patent as unpatentable.