Apple Inc v. Smartflash LLC

1. Case Identification

• Case #: CBM2015-00032
• Patent #: 8,336,772
• Filed: November 25, 2014
• Petitioner(s): Apple Inc.
• Patent Owner(s): Smartflash LLC
• Challenged Claims: 14, 19, and 22

2. Patent Overview

• Title: Data Storage and Access Systems
• Brief Description: The ’772 patent describes a system for controlling access to digital content based on payment validation. The system uses a data access terminal to retrieve content data from a supplier and provide the retrieved data to a data carrier after payment is confirmed.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under 35 U.S.C. §101 - Claims 14, 19, and 22 are directed to an abstract idea.

• Prior Art Relied Upon: None. This ground is based on patent eligibility standards.
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that the challenged claims are directed to the abstract idea of paying for and controlling access to content, which is a fundamental and long-standing economic practice. The claims merely recite implementing this abstract idea on generic computer components (e.g., a data access terminal with a processor, memory, and interfaces) using conventional, routine functions. Petitioner contended this generic computer implementation does not add an "inventive concept" sufficient to transform the abstract idea into a patent-eligible application under the framework established in Alice Corp. v. CLS Bank Int'l.
  • Key Aspects: The asserted novelty of the ’772 patent was not in a technical improvement to computer hardware or software, but in the business method of controlling data access, making it ineligible subject matter under §101.

Ground 2: Obviousness over Stefik, Poggio, and Subler - Claims 14, 19, and 22 are obvious under 35 U.S.C. §103.

• Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980), Poggio (European Publication No. EP0809221), and Subler (Patent 5,646,992).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that the primary reference, Stefik, disclosed a system of secure digital content "repositories" (data access terminals) that manage access to digital works using "usage rights" and communicate with payment validation systems. Poggio taught a "virtual vending machine" model for centralizing the sale and distribution of digital products, including processing payments. Subler disclosed an interactive graphical user interface (GUI) that allowed users to browse, search, and retrieve information about available content items. The combination of these references allegedly taught all limitations of the challenged claims, including the data access terminal, interfaces, and code for requesting, receiving, and validating payment for content.
  • Motivation to Combine: A person of ordinary skill in the art (POSITA) would combine Stefik’s secure repository framework with Poggio’s centralized vending machine concept to create a more efficient and scalable system for content sales and distribution. A POSITA would further integrate Subler's advanced GUI to improve the user experience by providing an intuitive way to search for and select content within the combined Stefik/Poggio system.
  • Expectation of Success: Combining these known systems and software interfaces to achieve the claimed functionality would have been predictable and straightforward for a POSITA.

Ground 3: Obviousness over Stefik, Poggio, Subler, and Sato - Claims 14, 19, and 22 are obvious under §103.

• Prior Art Relied Upon: Stefik (Patent 5,530,235 and Patent 5,629,980), Poggio (European Publication No. EP0809221), Subler (Patent 5,646,992), and Sato (JP Publication No. H11-164058).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground built upon the combination in Ground 2 by adding the teachings of Sato. Petitioner argued that Sato disclosed storing and accessing media content on portable devices, such as mobile phones, and writing that content to a removable IC card (a "data carrier"). This addition addressed limitations related to handheld terminals and storing retrieved content on a portable data carrier.
  • Motivation to Combine: A POSITA would have been motivated to implement the system of Stefik, Poggio, and Subler on a mobile platform as taught by Sato. This would leverage the growing market for mobile devices to increase media distribution, user convenience, and market reach—a well-understood goal in the art. Sato’s disclosure of using a mobile phone to select and store music provided an explicit model for this integration.
  • Expectation of Success: Applying the established content distribution and payment model to a mobile device using a removable memory card was a predictable application of known technologies.

4. Key Claim Construction Positions

• Petitioner proposed, for the purpose of the review, that the term "payment data" be construed as "data representing payment made for requested content data."
• Petitioner argued this construction was important to distinguish payment-specific data from more general "access control data," thereby clarifying the scope of the prior art's teachings on payment validation and transaction processing systems.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under 35 U.S.C. §325(d) would be inappropriate.
• It contended that this petition was not substantially the same as previously filed petitions because it raised new grounds of unpatentability under §101 based on the Supreme Court's decision in Alice, which was issued after the original petitions were filed. Furthermore, this petition introduced new prior art (Subler) that provided explicit disclosures for claim limitations the Board had previously found absent in the earlier-cited art.

6. Relief Requested

• Petitioner requests institution of a Covered Business Method Patent Review and cancellation of claims 14, 19, and 22 of the ’772 patent as unpatentable.