PTAB

CBM2015-00016

Apple Inc v. Smartflash LLC

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Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Data Storage and Access Systems
  • Brief Description: The ’458 patent relates to data storage and access systems that enable downloading and paying for data. The invention is described as a portable data carrier (e.g., a smart card) that stores content, payment data, and use rules to manage access to the stored content.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under 35 U.S.C. § 101 - Claims 1, 6, 8, 10, and 11 are directed to an abstract idea.

  • Prior Art Relied Upon: N/A (Legal argument based on the claims and specification).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that all challenged claims are directed to the patent-ineligible abstract ideas of paying for content and controlling access to content based on rules. Claim 1 is directed to the concept of payment, reciting a portable data carrier with payment data memory and code to output payment data. Claims 6, 8, 10, and 11 are directed to the concept of controlling access, reciting a data access device with code to evaluate use rules and use status data to determine if access is permitted.
    • Motivation to Combine (for §103 grounds): N/A.
    • Expectation of Success (for §103 grounds): N/A.
    • Key Aspects: Petitioner contended the claims fail the two-step framework from Alice Corp. v. CLS Bank Int'l. First, the claims are directed to fundamental economic practices. Second, the claims add no inventive concept because they merely implement the abstract ideas using generic, conventional computer components. The patent itself allegedly confirms that the "portable data carrier" and its components (processor, memory, interface, SIM) were well-known, commonplace technologies at the time. The functional "code to" limitations simply instruct the use of generic computer functions and do not transform the abstract idea into a patent-eligible application.

Ground 2: Obviousness over Stefik and Ahmad - Claims 6 and 8 are obvious over Stefik in view of Ahmad.

  • Prior Art Relied Upon: Stefik (collectively referring to Patent 5,530,235 and Patent 5,629,980) and Ahmad (Patent 5,925,127).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Stefik taught a comprehensive digital rights management (DRM) system using a portable "DocuCard" as a repository for digital works. Stefik's system allegedly disclosed a "data access device" with a user interface, data carrier interface, program store, and processor, as recited in independent claim 6. However, in a prior CBM petition, the Board found that Petitioner had not sufficiently shown that Stefik taught the "use status data" limitation. This petition argued that Ahmad remedies that deficiency. Ahmad disclosed a system to monitor rented software by tracking usage time with a timer or number of uses with a counter ("use status data") and comparing it against licensed limits ("use rules data") to prevent unauthorized use. The combination of Stefik's DRM framework and Ahmad's specific method for tracking usage status allegedly rendered the limitations of claims 6 and 8 obvious.
    • Motivation to Combine (for §103 grounds): A person of ordinary skill in the art (POSITA) would combine Stefik and Ahmad because both references aimed to solve the same problem: enforcing usage restrictions on digital content. A POSITA would have been motivated to integrate Ahmad's specific and advantageous usage monitoring module (e.g., for rentals) into Stefik’s more flexible DRM system to provide more robust and continuous tracking of authorization status, thereby improving the system's ability to prevent unauthorized access.
    • Expectation of Success (for §103 grounds): A POSITA would have had a reasonable expectation of success in combining the known software-based monitoring techniques of Ahmad with the DRM repository system of Stefik.

Ground 3: Indefiniteness under 35 U.S.C. § 112 - Claim 11 is indefinite.

  • Prior Art Relied Upon: N/A.

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner argued that claim 11, which depends from claim 6, is indefinite due to a lack of antecedent basis. Claim 11 recited "wherein said use rules permit partial use of a data item." However, its parent claim 6 did not introduce the term "use rules"; rather, claim 6 recited "use rules data."
    • Key Aspects: Petitioner noted that the Board, in prior proceedings on related patents, had construed "use rule" and "use rule data" as distinct terms with different meanings. Because it would be unclear to a POSITA whether claim 11 intended to refer to "use rules" or the recited "use rules data," the claim failed to provide sufficient notice of its scope and was therefore invalid as indefinite.

  • Additional Grounds: Petitioner asserted additional obviousness challenges for claims 6, 8, 10, and 11 based on various other combinations, including Stefik/Ahmad/Kopp, Stefik/Ahmad/Sato, and Stefik/Ahmad/Ginter, but relied on similar combination rationales. These grounds argued that Kopp (Patent 5,940,805) taught user-customizable usage limits, Sato (JP Application # H11-164058) taught a mobile media device implementation, and Ginter (Patent 5,915,019) taught providing supplementary data (e.g., advertising) with the content.

4. Key Claim Construction Positions

  • "payment data" (claim 1): Petitioner proposed the construction "data representing payment made for requested content data," arguing it is distinct from access control data.
  • "use rules data" (claim 6): Petitioner proposed the construction "data for rules specifying a condition under which access to content is permitted."
  • "use rules" (claim 11): Petitioner proposed the construction "rules specifying a condition under which access to content is permitted," highlighting the distinction from "use rules data" in its indefiniteness argument.
  • "supplementary data" (claim 10): Petitioner proposed construing this term as "advertising data, customer reward management data, and/or hot links to web sites."

5. Arguments Regarding Discretionary Denial

  • Petitioner filed this CBM petition after the Board, in a prior proceeding (CBM2014-00106/107), instituted a trial on claim 1 but declined to institute on claims 6, 8, 10, and 11. Petitioner argued that this new petition should be instituted because it presented new prior art and arguments—specifically citing Ahmad and Kopp—that directly addressed the deficiencies the Board identified in its previous decision regarding the "use status data" limitation.

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.