PTAB

CBM2014-00113

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 ’317 patent relates to systems for controlling access to digital data by linking it to payment. The invention describes methods and systems for receiving a data request, receiving corresponding payment data, transmitting the requested data upon validation, and managing the distribution of payments to content providers.

3. Grounds for Unpatentability

Ground 1: Obviousness over Ginter and Poggio - Claims 1, 6-8, 12-14, 16, and 18 are obvious over Ginter in view of Poggio.

  • Prior Art Relied Upon: Ginter (Patent 5,915,019) and Poggio (European Application Publication No. EP0809221A2).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Ginter taught a secure "virtual distribution environment" (VDE) for controlling access to and distributing electronic information, providing the overall system architecture for the challenged claims. Poggio, in turn, taught a "virtual vending machine" that specifically handles the transactional aspects of selling digital content, such as receiving and processing electronic payments (e.g., credit card numbers) before distributing licensed data. Petitioner asserted that Poggio’s detailed payment validation and fulfillment process supplied the claim limitations related to receiving payment data and responsively providing the requested data, which were applied to Ginter's foundational system.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Poggio’s user-friendly payment methods with Ginter’s secure VDE to create a more commercially complete and viable system. The combination would serve the predictable business goal of mirroring traditional commercial transactions (i.e., pay first, then receive goods) and would encourage impulse purchases by streamlining the payment process within a secure framework.
    • Expectation of Success: The proposed combination involved applying a known transactional method (Poggio) to a known content distribution framework (Ginter). A POSITA would have had a high expectation of success as this represented the integration of well-understood, complementary technologies to achieve a predictable result.

Ground 2: Obviousness over Ginter and Stefik - Claims 12-14 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: While Ginter taught the overall VDE, Petitioner contended that Stefik taught key limitations related to a portable "data carrier." Stefik disclosed a physical, removable "DocuCard"—a type of smart card—that functions as a portable repository for digital works and controls access based on associated "usage rights." Petitioner asserted that Stefik’s DocuCard directly taught the "data carrier for storing data from the data supply system" limitation, as it is a removable device that stores content written from a remote repository.
    • Motivation to Combine: A POSITA would have been motivated to incorporate Stefik's DocuCard technology into Ginter's VDE to enhance system functionality and expand its user base. Using a portable, removable data carrier was a known and advantageous method for increasing the versatility of a digital content system, making it an obvious design choice to improve upon Ginter's system by adding support for such devices.
    • Expectation of Success: A POSITA would expect success in integrating a known type of portable storage device (Stefik's DocuCard) into a digital distribution system (Ginter), as it was a straightforward application of existing and compatible technologies.

  • Additional Grounds: Petitioner asserted that all challenged claims were also obvious over Ginter standing alone. Further obviousness challenges for claims 12-14 were presented based on combinations of Ginter with Stefik and Poggio, and Ginter with Sato (JP Application Publication No. H11-164058), which relied on similar motivations to combine known elements to improve functionality.

4. Key Claim Construction Positions

  • "payment data": Petitioner proposed construing this term to mean "data representing payment made for requested content data." It argued this construction was necessary to properly distinguish payment data, which is related to a financial transaction, from "access control data," such as a password or usage rule. Petitioner contended this distinction was consistent with the patent's specification.

5. Arguments Regarding Discretionary Denial

  • Petitioner dedicated substantial argument to establishing that the ’317 patent is a Covered Business Method (CBM) patent and thus eligible for review, asserting that discretionary denial would be improper. It argued that the claims are directed to activities that are financial in nature, as they explicitly recite receiving payment data, reading payment distribution information, and outputting payment data for distributing funds—all relating to the monetary aspects of a commercial transaction.
  • Petitioner further contended that the claimed invention does not fall under the "technological invention" exception. The argument was that the claims merely recite generic, well-known computer components (e.g., data store, processor, payment system) to implement the non-technical business practice of selling data in exchange for payment. Petitioner asserted that this does not solve a technical problem with a technical solution but rather automates a fundamental economic practice.

6. Relief Requested

  • Petitioner requests institution of a Covered Business Method patent review and cancellation of claims 1, 6-8, 12-14, 16, and 18 of the ’317 patent as unpatentable under 35 U.S.C. § 103.