PTAB

CBM2014-00106

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 ’458 patent describes systems for managing access to digital content stored on a portable data carrier, such as a smart card. The system links payment data and use rules to the stored content to control access and enable payment for use, aiming to reduce unauthorized data access.

3. Grounds for Unpatentability

Ground 1: Obviousness over Stefik - Claims 1, 6-8, 10, and 11 are obvious over Stefik.

  • Prior Art Relied Upon: Stefik, which collectively refers to Stefik (5,530,235) and Stefik (5,629,980), incorporated by reference.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Stefik disclosed all elements of the challenged claims. Stefik described a system for controlling the distribution and use of digital works via "repositories," which could be embodied in a portable "DocuCard." This DocuCard, a transportable unit with non-volatile storage, a processor, and an I/O port, allegedly met the limitations of the claimed "portable data carrier" (claim 1). Similarly, Stefik's repositories, which retrieve data from other repositories like a DocuCard, allegedly met the limitations of the claimed "data access device" (claim 6). Stefik's system also managed access based on "usage rights" and handled billing through a "credit server," which Petitioner mapped to the patent's claims for use rules, payment data, and access control.
    • Motivation to Combine (for §103 grounds): Not applicable as this ground asserts obviousness over a single reference. Petitioner contended that, to the extent any claimed element was not explicitly disclosed, it would have been an obvious implementation of Stefik's system to a POSITA.
    • Expectation of Success (for §103 grounds): A POSITA would have had a high expectation of success in implementing the claimed features, as Stefik's system provided a comprehensive framework for secure digital content distribution on portable media.

Ground 2: Obviousness over Stefik in view of Sato - Claims 1, 6-8, 10, and 11 are obvious over Stefik in view of Sato.

  • Prior Art Relied Upon: Stefik (5,530,235 and 5,629,980) and Sato (H11-164058).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Stefik taught most claim limitations, and Sato supplied any missing elements, particularly the "subscriber identity module (SIM) portion" of claim 1. Sato disclosed a system for downloading and playing music on a mobile phone using a removable IC card for storage. Petitioner argued that a POSITA would understand a mobile phone inherently includes a SIM to identify the subscriber to a network operator. Sato also explicitly taught retrieving content from a removable card, further supporting the teachings for the "data access device" of claim 6.
    • Motivation to Combine (for §103 grounds): A POSITA would combine Stefik and Sato to leverage the widespread use of mobile phones for digital content distribution. Implementing Stefik's secure repository and rights management system on Sato's mobile device platform would expand the distribution network while maintaining the content protection and compensation mechanisms taught by Stefik.
    • Expectation of Success (for §103 grounds): Success was expected because both references concerned distributing digital content to user devices, and programming Sato's mobile device to function as a Stefik repository was a straightforward application of known technologies.

Ground 3: Obviousness over Stefik in view of Poggio - Claims 1, 6-8, 10, and 11 are obvious over Stefik in view of Poggio.

  • Prior Art Relied Upon: Stefik (5,530,235 and 5,629,980) and Poggio (EP0809221A2).

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner argued that to the extent Stefik did not explicitly teach outputting payment data from a portable carrier to an external device, Poggio supplied this teaching. Poggio disclosed a "virtual vending machine" system for managing the distribution and licensing of electronic data. This system explicitly described collecting electronic payment, such as a credit card number, from a user and forwarding it to a "digital cash interface" or "electronic banking network" for processing.
    • Motivation to Combine (for §103 grounds): A POSITA would combine the references to enhance Stefik's system with Poggio's more detailed and automated electronic payment processing. Both systems aimed to control access and ensure payment for digital content. Integrating Poggio's virtual vending machine concept would provide a centralized and efficient mechanism for handling payment transactions within Stefik's distributed repository network, which was a critical function for both systems.
    • Expectation of Success (for §103 grounds): A POSITA would have expected success in combining these compatible systems, as payment security and confirmation are fundamental to digital content distribution models like those described in both references.

  • Additional Grounds: Petitioner asserted that claims 6-8, 10, and 11 were anticipated by Stefik. Petitioner also asserted additional obviousness challenges based on Stefik in view of Poggio and Sato, and Stefik in view of Poggio and Rydbeck (WO 99/43136), which introduced a cellular phone with an integrated digital entertainment module.

4. Key Claim Construction Positions

  • "payment data" (Claim 1): Petitioner proposed this term be construed as "data representing payment made for requested content data." This construction was intended to distinguish it from more general "access control data."
  • "supplementary data" (Claim 10): Petitioner proposed this term be construed to mean "advertising data, customer reward management data, and hot links to web sites." Petitioner argued that a broader construction would render the term indefinite.

5. Key Technical Contentions (Beyond Claim Construction)

  • Covered Business Method (CBM) Patent Qualification: A central contention was that the ’458 patent qualified for CBM review. Petitioner argued that claim 1 was directed to a financial activity—"storing and paying for data"—as it explicitly required storing and outputting "payment data."
  • Not a "Technological Invention": Petitioner further argued the patent did not fall under the technological invention exception to CBM review. It contended the patent claimed no novel or unobvious technological features, instead merely reciting a combination of well-known, conventional components (e.g., smart card, processor, memory, SIM card) to implement the abstract business idea of linking payment to data access. The patent's stated purpose was to solve the business problem of data piracy, not a technical problem.

6. Relief Requested

  • Petitioner requested institution of a Covered Business Method Patent Review and cancellation of claims 1, 6-8, 10, and 11 of the ’458 patent as unpatentable under 35 U.S.C. §§ 102 and/or 103.