PTAB

CBM2015-00015

Apple Inc v. Smartflash LLC

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Petition
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1. Case Identification

2. Patent Overview

  • Title: Data Storage and Access Systems
  • Brief Description: The ’221 patent relates to a system for managing access to digital data using digital rights management (DRM). It describes a data access terminal that interacts with a portable data carrier, processes payment information through a payment validation system, and grants access to the data based on use rules that can be dependent on the payment amount.

3. Grounds for Unpatentability

Ground 1: Ineligibility under §101 - Claims 1, 2, 11, and 32 are unpatentable under 35 U.S.C. §101.

  • Core Argument: Petitioner argued that the challenged claims are directed to the patent-ineligible abstract idea of controlling access to content in exchange for payment, a fundamental and long-standing economic practice. The petition asserted that the claims lack an "inventive concept" sufficient to transform the abstract idea into a patent-eligible application. It contended that the claims merely recite generic computer components (e.g., an interface, a processor, a program store) to perform conventional functions, such as reading payment data, communicating with a validation system, and retrieving data. Citing the framework from Alice Corp. v. CLS Bank, Petitioner maintained that simply implementing an abstract business method on a general-purpose computer does not confer patent eligibility.

Ground 2: Obviousness of Claim 32 over Stefik, Poggio, and Kopp

  • Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980), Poggio (European Application # EP0809221), and Kopp (Patent 5,940,805).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Stefik taught a "repository" system for distributing "digital works" subject to "usage rights," which corresponds to the claimed data access terminal, data supplier, and rule-based access control. Poggio was cited for its "virtual vending machine" architecture for distributing licensed electronic data and processing payments. Kopp was cited for its vending apparatus that sells data records for a fee and provides access only to a predetermined, paid-for extent, disclosing a "release signal" upon payment confirmation.
    • Motivation to Combine: A POSITA would combine Stefik’s flexible repository system with Poggio’s centralized vending machine to create a robust and secure content distribution platform. A POSITA would then incorporate Kopp's teachings to implement more granular, payment-based access controls, such as requiring a payment confirmation signal before releasing content. This combination would address the well-known business need to prevent unauthorized use and ensure providers are compensated.
    • Expectation of Success: Petitioner asserted that since the references address similar problems in the field of DRM and describe compatible computer-based architectures, a POSITA would have had a reasonable expectation of success in combining their teachings to achieve the claimed system.

Ground 3: Obviousness of Claim 32 over Stefik, Poggio, Kopp, and Smith

  • Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980), Poggio (European Application # EP0809221), Kopp (Patent 5,940,805), and Smith (WO 95/34857).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon the combination of Stefik, Poggio, and Kopp by adding the teachings of Smith. Smith was cited for its "SoftMeter" system that enables "metered usage of software products." Smith taught tying access rules (e.g., a usage counter) to a software product, where access is granted only if a prepaid "remaining use" counter is greater than zero, and where the amount of use is dependent on the payment made.
    • Motivation to Combine: A POSITA would have been motivated to incorporate Smith's teachings into the Stefik/Poggio/Kopp system to provide a more flexible and commercially attractive payment model. Smith's metered, pay-per-use approach allows users to purchase access proportional to their expected use, rather than being limited to an all-or-nothing purchase or a simple rental. This would enhance the system's ability to cater to different consumer needs.
    • Expectation of Success: Adding a metering function as taught by Smith was presented as a logical and straightforward enhancement to the underlying payment and access control system, fully within the skill of a POSITA.

4. Key Claim Construction Positions

  • Petitioner proposed constructions for several key terms it deemed critical to its invalidity arguments.
  • "payment data": Proposed as "data representing payment made for requested content data," distinguishing it from access control or user identity data.
  • "use rule data" and "access rule": Proposed as "data for rules specifying a condition under which access to content is permitted." Petitioner emphasized that the Board had previously adopted this construction for "access rule" in a related matter, and that its obviousness arguments for claim 32 relied on this established meaning to map prior art disclosures of conditional access.

5. Key Technical Contentions (Beyond Claim Construction)

  • A central contention of the petition was that the ’221 patent qualifies as a "Covered Business Method" patent because it does not claim a "technological invention."
  • Petitioner argued that the patent claims a method of solving a business problem (data piracy and lost revenue) rather than a technical problem. The claimed solution was characterized as the automation of a commercial transaction using only generic, off-the-shelf computer components and well-known e-payment standards. The petition asserted that the patent fails to disclose any specific improvement to computer hardware or software functionality itself, making it subject to CBM review.

6. Relief Requested

  • Petitioner requested the institution of a Covered Business Method Patent Review and cancellation of claims 1, 2, 11, and 32 of Patent 8,118,221 as unpatentable.