PTAB

CBM2015-00118

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 ’720 patent relates to systems and methods for downloading and paying for data, such as audio, video, or software. The invention purports to address data piracy by combining digital rights management with content data storage on a portable data carrier, where access to the data is controlled based on payment validation and the application of specific access rules.

3. CBM Eligibility Arguments

  • Financial Product or Service: Petitioner argued the ’720 patent qualifies as a Covered Business Method (CBM) patent because its claims are directed to a method or apparatus for performing operations used in the practice or management of a financial product or service. Specifically, claim 14 recites processing payments for data downloads, including steps like "reading payment data," "forwarding the payment data to a payment validation system," and making an "access rule... dependent upon the amount of payment." Petitioner asserted these activities are financial in nature, as they directly involve the sale of digital content, which the Board has previously recognized as a financial activity. The specification further supports this by describing e-payment systems that could be "coupled to banks."
  • Not a Technological Invention: Petitioner contended that the ’720 patent is not excluded from CBM review as a "technological invention." The argument was that the claimed subject matter as a whole fails to recite a novel and unobvious technological feature that solves a technical problem with a technical solution. Instead, the patent addresses a business problem—loss of revenue from data piracy—using a combination of conventional, off-the-shelf computer components (e.g., a conventional computer, mobile phone, or portable audio/video player). The petition argued that merely reciting generic hardware does not transform an abstract business method into a technological invention.

4. Grounds for Unpatentability

Ground 1: Claims 13 and 14 are Unpatentable Under 35 U.S.C. § 101

  • Legal Basis Relied Upon: Petitioner argued the claims are directed to patent-ineligible subject matter under the abstract idea doctrine, citing legal precedent from Alice Corp. v. CLS Bank, Mayo Collaborative Serv. v. Prometheus Labs., Inc., and Cybersource Corp. v. Retail Decisions, Inc., supported by the Declaration of Dr. Jeffrey Bloom.
  • Core Argument for this Ground:
    • Abstract Idea Mapping: Petitioner asserted that claims 13 and 14 are directed to the fundamental, long-standing abstract idea of licensing and regulating access to copyrighted content based on payment. The petition provided a step-by-step analysis of claim 14 to show that each limitation corresponds to a mental process or a routine, conventional activity that has long been performed by humans without computers.
      • reading payment data was equated to the mental process of accessing a line of credit.
      • forwarding payment data to a payment validation system was described as analogous to a person presenting a credit card or check to a cashier for payment.
      • retrieving data from the data supplier was compared to using a paper payment form to retrieve an item from a warehouse or loading dock.
      • receiving and writing an access rule was argued to be a mental activity, similar to how radio station operators for decades have received and applied copyright restrictions to comply with compulsory licenses.
    • Lack of an Inventive Concept: Petitioner contended that the claims fail to add an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The recitation of generic hardware elements—a "first interface," "data carrier interface," and "processor"—does not provide a meaningful limitation on the claim scope. The petition emphasized that the patent specification itself describes these components as "conventional" and their use as merely a generic computer implementation of the abstract idea, which is insufficient under the Alice/Mayo framework.
    • Failure to Tie to a Specific Machine: The argument was made that the claims are not tied to a particular machine in a way that would render them patent-eligible. The functionality described has long been performed by human activity, and the simple addition of a general-purpose computer to accelerate the process does not make the computer integral to the invention. The claims are silent on how the computer specifically aids the method in a novel, non-conventional way.
    • Preemption of the Abstract Idea: Finally, Petitioner argued that because the claims add no meaningful limitations beyond the abstract idea implemented on a generic computer, they effectively preempt all practical uses of the concept of regulating access to content via payment validation, rendering them invalid under §101.

5. Relief Requested

  • Petitioner requests institution of a Covered Business Method (CBM) patent review and cancellation of claims 13 and 14 as unpatentable.