PTAB

CBM2015-00160

Apple Inc v. ContentGuard Holdings Inc

Key Events

Petition

petition

Title: Method and System for Transferring Rights
Brief Description: The ’280 patent relates to a digital rights management (DRM) system for controlling the transfer of usage rights for digital content. The invention purports to solve problems in multi-tier distribution chains by using "meta-rights," which are rights to create other rights, and "state variables" to track the status of created rights.

Prior Art Relied Upon: Not applicable. The argument is based on the claims being directed to a judicially-excepted abstract idea.
Core Argument for this Ground:
- Mapping to Abstract Idea: Petitioner argued the claims are directed to the abstract idea of managing and sublicensing rights for content, a fundamental and long-standing economic practice. The petition analogized the claimed process to a conventional brick-and-mortar video store transaction: a studio grants a license (including "meta-rights" to sublicense) to the store, a clerk determines if a customer is entitled to rent a movie, and the store then exercises its meta-right to create a new, more limited right (the rental agreement) for the customer. The claimed steps of "obtaining rights," "determining entitlement," and "exercising the meta-right" were argued to be the direct, computerized equivalent of this traditional business practice.
- Key Aspects: Petitioner contended that implementing this abstract idea on a generic computer system does not confer patent eligibility. The recitation of a "computer-implemented method," a "repository," and rights in "digital form" were argued to be nothing more than insignificant post-solution activity that fails to add the "inventive concept" required under the Alice/Mayo framework. Petitioner asserted the claims do not improve computer functionality but merely use computers as a tool to automate an abstract business process.

Prior Art Relied Upon: Stefik (Patent 5,634,012).
Core Argument for this Ground:
- Prior Art Mapping: Petitioner asserted that Stefik, which was filed years before the ’280 patent, discloses every limitation of the challenged claims. Stefik describes a comprehensive DRM system using "repositories" to control the distribution and use of digital works. Petitioner argued Stefik’s "Next-Set-of-Rights" grammar element functions identically to the claimed "meta-right," as it allows a creator to specify a set of rights that a recipient repository may create and provide to a subsequent party. Stefik’s use of state variables, such as "Copies-in-Use" and "Copy-Count," to track the number of available copies and limit distribution was argued to be a direct disclosure of the claimed "state variable" used for determining the state of a created right. The entire claimed method of obtaining, determining, and exercising rights via a repository to create new rights was alleged to be taught by Stefik's system for transferring digital works with associated usage rights between repositories.
Additional Grounds: Petitioner asserted that claims 1, 5, 11, 12, and 22 are also obvious under 35 U.S.C. §103 over Stefik in view of the knowledge of a person of ordinary skill in the art.

meta-right: Petitioner proposed the construction "a right about a right." This was based on the term's plain meaning and the specification's description of meta-rights as an extension of "usage rights" that permit a recipient to create and issue new rights to downstream parties.
state variable: Proposed as "a variable that tracks a changing condition of a right." This construction was argued to be consistent with the term's well-known meaning in computer science and the patent's examples, such as using a variable to track the number of times a right has been exercised.
repository: Proposed as "a trusted system which maintains physical, communications and behavioral integrity, and supports usage rights." Petitioner argued this construction was required because the ’280 patent incorporates by reference Stefik, which provides this explicit definition for the term.

Petitioner dedicated significant argument to establishing that the ’280 patent is a "covered business method" (CBM) patent and not a "technological invention" that would be exempt from CBM review. The core contentions were:
- The patent is incidental to a financial activity because its specification repeatedly describes embodiments involving the payment of fees for licenses to use digital content (e.g., "view content for a fee of five dollars").
- The patent does not solve a technical problem with a technical solution. Instead, it addresses a business problem (loss of control in a distribution chain) with a business solution (a hierarchical licensing model). Petitioner argued the patent simply uses generic and well-known computer components (servers, networks, XML) as a tool to implement this business method, which does not constitute a novel technological invention.

Petitioner requested institution of a Covered Business Method patent review and cancellation of claims 1, 5, 11, 12, and 22 of Patent 7,774,280 as unpatentable.