PTAB

CBM2015-00117

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 ’221 patent relates to systems and methods for downloading and paying for digital data, such as audio, video, or software. The disclosed technology aims to combat digital piracy by combining digital rights management with content data storage, linking data access rules to payment validation on a portable data carrier.

3. Grounds for Unpatentability

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

  • Core Argument for this Ground: Petitioner's central argument was that the challenged claims are directed to the abstract idea of enabling limited use of paid-for or licensed content, which is a fundamental and long-standing economic practice. The petition asserted that this abstract idea is implemented using only generic, conventional computer components that fail to transform the claims into a patent-eligible application. Petitioner argued the claims do not recite an inventive concept sufficient to satisfy the requirements of §101 as interpreted by the Supreme Court in cases such as Alice Corp. v. CLS Bank International. The petition contended that the claims merely automate a well-known business practice on a general-purpose computer.
  • Prior Art Mapping: Petitioner contended that the core steps recited in the challenged claims could be performed by a human without a computer, analogizing them to established retail transactions. For example, the claimed step of "reading payment data from a data carrier and to forward the payment data to a payment validation system" was equated to a customer presenting a check or credit card to a cashier. "Receiving payment validation data" was compared to the cashier confirming the payment is valid. Similarly, the step of "retrieving data from the data supplier and to write the retrieved data into the data carrier" was likened to a customer taking delivery of physical goods after payment verification. This mapping was used to demonstrate that the claims simply recite the logic of a fundamental commercial practice, rather than a specific, technological solution.
  • Key Aspects: The petition advanced several interconnected arguments to support its §101 challenge:
    • No Inventive Concept: The use of computer components like a "data access terminal," "processor," "data carrier," and "program store" was argued to be insufficient to confer patent eligibility. Petitioner highlighted language in the ’221 patent's specification that described these components as "conventional," asserting they merely provide a generic technological environment for the abstract idea without adding anything inventive.
    • Preemption: Petitioner argued that the claims were so broad as to impermissibly preempt the entire field of controlling access to content based on payment. By not being limited to a specific, non-conventional implementation, the claims would effectively grant a monopoly over the abstract concept itself, which is what §101 is intended to prevent.
    • Failure of Machine-or-Transformation Test: The petition asserted the claims failed the machine-or-transformation test. It argued that the claims were not tied to a particular, integral machine but rather recited a general-purpose computer performing its most basic functions. Furthermore, Petitioner contended that no claimed step resulted in the transformation of a physical article into a different state or thing; data was merely "read," "forwarded," "received," and "written" without being fundamentally altered in character.

4. Key Claim Construction Positions

  • Petitioner proposed adopting a construction for the term "access rule" that the PTAB had previously used in a related case (CBM2014-00194).
    • "access rule": The proposed construction was "a rule specifying a condition under which access to content is permitted." This construction was central to Petitioner's argument that the claims merely recite the abstract business practice of conditioning access on payment, implemented using generic rules on conventional hardware.

5. Key Technical Contentions (Beyond Claim Construction)

  • Not a Technological Invention: A central contention necessary for instituting a Covered Business Method (CBM) review was that the ’221 patent does not claim a "technological invention." Petitioner argued the claims fail to recite a novel and unobvious technological feature and do not solve a technical problem with a technical solution. Instead, the patent addresses a purely business problem (loss of revenue from digital piracy) by applying the abstract idea of pay-for-access using a combination of conventional computer components.

6. Relief Requested

  • Petitioner requested institution of a Covered Business Method (CBM) patent review and cancellation of claims 2, 11, and 32 of the ’221 patent as unpatentable for being directed to ineligible subject matter under 35 U.S.C. §101.