PTAB

CBM2014-00111

Apple Inc v. Smartflash LLC

Key Events

Petition

petition

Title: Data Storage and Access Systems
Brief Description: The ’772 patent describes systems for controlling access to digital content (e.g., music, videos) stored on a data carrier. The system uses a data access terminal to manage payment validation and usage rules, thereby linking access to content with payment to prevent unauthorized use.

Prior Art Relied Upon: Ginter (Patent 5,915,019).
Core Argument for this Ground:
- Prior Art Mapping: Petitioner argued that Ginter disclosed all elements of the challenged claims. Ginter taught a "virtual distribution environment" (VDE) for secure management of electronic rights. This included a "Portable Electronic Appliance" (PEA), such as a smart card, that stores both content and associated control/payment information. A user connects the PEA to a host device (a "handheld electronic appliance") to browse, select, and access content after payment validation, which Ginter described as being handled via prepayments or real-time debits audited by a clearinghouse. Petitioner contended Ginter’s system met the limitations of a data access terminal, a data carrier, and the code for performing the claimed steps of requesting, validating payment for, and controlling access to content.
- Key Aspects: Petitioner asserted that Ginter alone taught the entire claimed system, rendering the combination of these well-known elements obvious.

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 to the extent Ginter’s payment system was not explicit enough, Poggio supplied the missing details. Poggio disclosed a "virtual vending machine" for distributing licensed electronic data. Poggio explicitly taught transmitting payment data, such as a credit card number, to a payment validation system and receiving a confirmation before providing the product. This directly mapped to claim limitations requiring code to transmit payment data for validation and receive payment validation data in response.
- Motivation to Combine: A POSITA would combine Poggio’s conventional payment transaction flow with Ginter’s flexible VDE to mirror a traditional commercial exchange (pay, confirm, receive). Ginter itself praised its system's ability to be adapted to such commercial relationships, providing a clear motivation to incorporate a well-understood payment model like Poggio's.
- Expectation of Success: Combining a standard payment system with a digital content distribution system was a routine and predictable integration at the time.

Prior Art Relied Upon: Ginter (Patent 5,915,019) and Sato (JP Patent Application # H11-164058).
Core Argument for this Ground:
- Prior Art Mapping: Petitioner argued that Sato provided specific teachings for a handheld, wireless embodiment of Ginter’s system. Sato disclosed a mobile phone with a wireless interface used to download music software onto a removable IC memory card. The user could then play the music on the phone's display. This combination supplied the specific limitations of a "handheld multimedia terminal" with a "wireless interface" for retrieving content from a remote supplier, as required by claims such as 1 and 14.
- Motivation to Combine: A POSITA would combine the references to implement Ginter's secure content management system on Sato's ubiquitous mobile phone platform. This would advantageously expand the user base for the VDE and provide the added flexibility of wireless downloads to portable memory cards, a clear market-driven motivation.

Prior Art Relied Upon: Ginter (Patent 5,915,019) and Stefik (Patents 5,530,235 and 5,629,980).
Core Argument for this Ground:
- Prior Art Mapping: Petitioner argued that Stefik provided a concrete example of the portable data carrier with integrated access controls. Stefik disclosed a "DocuCard," a transportable unit with its own processor and non-volatile storage for managing access to digital works based on attached "usage rights." This directly taught a data carrier that itself controls access to the content stored on it, a key feature of claims 8 and 19.
- Motivation to Combine: A POSITA would be motivated to implement Ginter’s portable appliance (PEA) using Stefik’s DocuCard technology. This would provide the Ginter system with an established and advantageous method for managing usage rights directly on the portable media, enhancing security and functionality.

"payment data": Petitioner proposed construing this term to mean "data representing payment made for requested content data." This construction was intended to distinguish payment information from "access control data" and align with the patent's focus on commercial transactions.
"supplementary data": Petitioner proposed construing this term to mean "advertising data, customer reward management data, and hot links to web sites." This narrow construction was based on the limited examples provided in the patent’s specification.

Invention is Not Technological: Petitioner argued that the patent did not claim a true technological invention, a requirement for Covered Business Method (CBM) patents to avoid review. It contended the claims merely recited the use of generic, conventional hardware (e.g., a "general purpose computer" or "mobile phone") to implement an abstract business practice.
Solves a Business Problem, Not a Technical One: The petition asserted that the "problem" solved by the ’772 patent was the business issue of data piracy, i.e., lost revenue from unpaid downloads. The claimed "solution"—linking payment to access—was argued to be a fundamental economic or business concept, not a technical solution to a technical problem.

Petitioner requests institution of a Covered Business Method (CBM) patent review and cancellation of claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 of the ’772 patent as unpatentable under 35 U.S.C. §103.