PTAB

CBM2014-00110

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 ’772 patent relates to data access terminals and systems for controlling access to stored digital content. The invention focuses on systems where payment data is used to validate a user's right to access one or more content data items stored on a data carrier.

3. Grounds for Unpatentability

Ground 1: Anticipation over Stefik - Claims 8, 10, 19, 22, 30, and 32 are anticipated by Stefik under 35 U.S.C. §102.

  • Prior Art Relied Upon: Stefik, which collectively refers to Stefik (’235 patent, i.e., Patent 5,530,235) and Stefik (’980 patent, i.e., Patent 5,629,980), which is incorporated by reference into the ’235 patent.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Stefik discloses every element of the challenged claims. Stefik’s “DocuCard” system was described as a transportable repository for digital works, functioning as the claimed “data access terminal.” This system included a processor, user interface, I/O port (data carrier interface), and non-volatile storage, mapping to the core hardware elements of independent claim 8. Critically, Stefik was asserted to teach a system for controlling access to content based on "usage rights," which could be conditioned on fee acceptance. The system disclosed repositories that carry out transactions with credit servers and billing clearinghouses ("payment validation systems") using credit information ("payment data") to validate access, thereby anticipating the central payment-for-access functionality.

Ground 2: Obviousness over Stefik in view of Poggio - Claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 are obvious over Stefik in view of Poggio under 35 U.S.C. §103.

  • Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980) and Poggio (European Patent Application, Publication No. EP0809221A2).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Stefik taught the foundational digital rights management (DRM) framework using repositories. Poggio taught a "virtual vending machine" system for the sale and distribution of licensed digital products over a distributed computer system, including processing electronic payments and reloading products. Petitioner argued that to the extent Stefik did not explicitly teach certain claim elements, such as a centralized payment validation and content reloading functionality, Poggio supplied these missing elements.
    • Motivation to Combine: A POSITA would combine Stefik's DRM architecture with Poggio's virtual vending machine to create a more robust and efficient system for commercial content distribution. Both references addressed the same problem of securely distributing content while ensuring creators were compensated. A POSITA would have recognized that incorporating Poggio's automated payment and transaction features would be an advantageous and logical improvement to Stefik's system.
    • Expectation of Success: The combination involved integrating known software and network principles for digital commerce, which would have been a predictable endeavor for a POSITA.

Ground 3: Obviousness over Stefik in view of Sato - Claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 are obvious over Stefik in view of Sato under §103.

  • Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980) and Sato (JP Patent Application Publication No. H11-164058).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground focused on claims reciting a "handheld multimedia terminal," such as claims 1, 14, and 25. While Stefik disclosed a portable "DocuCard," Petitioner argued that Sato explicitly taught the application of such systems to mobile devices. Sato disclosed a system for downloading and playing music on a mobile phone, including storing content on a removable IC card (the "data carrier"). Sato’s teachings provided the specific context of a wireless, handheld device with a display for implementing the DRM and payment system of Stefik.
    • Motivation to Combine: A POSITA would have been motivated to implement Stefik's secure content distribution system on the mobile platform taught by Sato. This would expand the distribution network for digital works to the growing market of mobile users, leveraging Sato's teachings on managing content on a cellular phone to increase distribution potential while maintaining the security and payment features of Stefik.
    • Expectation of Success: Sato’s mobile device was described as having the requisite processing power and components to be programmed to function as a Stefik repository, making the combination straightforward.
  • Additional Grounds: Petitioner asserted additional obviousness challenges, including that all challenged claims are obvious in light of Stefik alone, and that the claims are obvious over the three-way combination of Stefik in view of Poggio and Sato.

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 argued as necessary to distinguish payment information from general "access control data," clarifying that the claims are directed specifically to a payment-for-content transaction.
  • "supplementary data": For claim 5, Petitioner proposed construing this term to mean "advertising data, customer reward management data, and hot links to web sites." This construction was based on the specification's explicit examples and was intended to define the scope of the additional data being handled by the claimed system.

5. Key Technical Contentions (Beyond Claim Construction)

  • Invention is Not a "Technological Invention": A central contention of the petition was that the ’772 patent did not claim a true technological invention and was therefore eligible for CBM review. Petitioner argued that the patent addressed the business problem of data piracy with a non-technical solution: the abstract idea of conditioning access to content on payment. It was asserted that the claims merely recited well-known, generic computer components (processor, memory, user interface) to implement this business method, without offering any novel or non-obvious technological improvement over the prior art. The specification itself was cited as disclaiming the importance of any specific hardware, stating the "physical embodiment of the system is not critical."

6. Relief Requested

  • Petitioner requests institution of Covered Business Method Patent Review and cancellation of claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 of the ’772 patent as unpatentable.