Apple Inc v. Smartflash LLC

1. Case Identification

• Case #: CBM2015-00131
• Patent #: 8,061,598
• Filed: May 8, 2015
• Petitioner(s): Apple Inc.
• Patent Owner(s): Smartflash Technologies Limited; Smartflash LLC
• Challenged Claims: 3-6, 8-14, 16-30, and 32-41

2. Patent Overview

• Title: Data Storage and Access Systems
• Brief Description: The ’598 patent describes a system for controlling access to digital content stored on a portable data carrier, such as a smart card. The system links access to the content with payment data and use rules, aiming to reduce the risk of unauthorized use and solve the business problem of data piracy.

3. Grounds for Unpatentability

Ground 1: Unpatentability under §101 - Claims 3-6, 8-14, 16-30, and 32-41 are directed to patent-ineligible subject matter.

• Legal Precedent Relied Upon: Petitioner’s argument was grounded in the two-step framework established in Alice Corp. Pty. Ltd. v. CLS Bank Int’l and Mayo Collaborative Servs. v. Prometheus Labs, Inc. Numerous prior art patents and publications were cited not as anticipatory or obviousness references, but to demonstrate that the hardware and software components recited in the claims were well-known, routine, and conventional at the time of the invention.
• Core Argument for this Ground:
  • Mapping to Abstract Idea: Petitioner argued that all challenged claims are directed to the unpatentable abstract idea of controlling access to data based on payment. This concept was characterized as a fundamental economic practice and a longstanding method of organizing human activity, analogous to other concepts found to be abstract by the Supreme Court. The petition asserted that the core of the claimed invention is linking payment with access, a non-technical business solution to the business problem of data piracy. The patent’s own abstract, which describes "paying for data" and "controlling access," was cited as evidence of the claims' focus on this abstract concept.
  • Lack of Inventive Concept (Alice Step Two): Petitioner contended that the claims, when viewed as an ordered combination, add nothing "significantly more" to the abstract idea itself. The additional elements recited—such as a "portable data carrier," "interface," "processor," "memory," and "code"—were argued to be generic and conventional computer components performing their ordinary functions. The petition emphasized that the ’598 patent specification itself disclaims any novelty in the hardware, stating that the "physical embodiment of the system is not critical" and that components can "take a variety of forms." The functional language used in the claims (e.g., "code for storing," "code to provide access") was argued to be purely functional, reciting conventional computer functions without specifying any particular, inventive implementation. The claims simply instruct one to apply the abstract idea of pay-for-access using generic technology, which is insufficient to confer patent eligibility under §101.

4. Key Claim Construction Positions

• "payment data": Petitioner proposed that for review purposes, this term should be construed as "data representing payment made for requested content data." It argued this construction is necessary to distinguish "payment data" from "access control data [which includes user identification data]," a distinction it asserted is made clear in the patent specification.
• "use rule(s)": Petitioner proposed this term be construed as "a rule specifying a condition under which access to content is permitted." This construction was asserted to be consistent with the specification and a prior Board construction of the same term in a related case.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §325(d) would be inappropriate. The petition asserted that it raised substantially new arguments not considered in previous petitions against the ’598 patent, specifically §101 invalidity grounds relying on the Alice decision, which post-dated prior §102/§103 challenges. Further, the petition challenged claims that had not been included in a prior §101-based petition because the Patent Owner had not asserted them against Petitioner at that time.

6. Relief Requested

• Petitioner requested the institution of a Covered Business Method patent review and a final judgment that claims 3-6, 8-14, 16-30, and 32-41 of the ’598 patent are unpatentable under 35 U.S.C. §101.