Microsoft Corp v. Uniloc 2017 LLC

1. Case Identification

• Case #: IPR2019-01252
• Patent #: 7,024,696
• Filed: June 25, 2019
• Petitioner(s): Microsoft Corporation
• Patent Owner(s): Uniloc USA Inc.
• Challenged Claims: 1, 3, 4, 9, 15, 20, 24, 25, 27, 30, 31, 36, and 37

2. Patent Overview

• Title: Method and System for Prevention of Piracy of a Given Software Application Via a Communications Network
• Brief Description: The ’696 patent describes a method for preventing software piracy by requiring a user to activate software over a network. The system limits the number of activation attempts for a given unique identification code associated with a copy of the software.

3. Grounds for Unpatentability

Ground 1: Obviousness over Schoch and Wyman - Claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 are obvious over Schoch in view of Wyman.

• Prior Art Relied Upon: Schoch (Patent 6,460,140) and Wyman (Patent 5,260,999).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Schoch disclosed a system for online software activation to combat piracy, where a remote service provider issues a license key to unlock software functionality. Schoch taught limiting the "maximum number of license keys" per unique validation number but did not detail the tracking mechanism. Petitioner asserted that Wyman supplied this missing detail, disclosing a "consumptive" license management system that tracks software usage. Wyman's system decrements a count of available "license units" upon each use request, "at the time of a license request," regardless of whether the use is ultimately successful. Petitioner contended this directly taught the ’696 patent’s key limitation of "counting the number of times an attempt has been made to obtain said service data" and selectively providing the data only when the count is below a predetermined threshold.
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Wyman's well-established license administration techniques with Schoch's online activation system to implement the activation limits that Schoch explicitly suggested but did not fully detail. This combination represented a simple application of a known technique (Wyman's usage tracking) to improve a similar system (Schoch's activation), yielding predictable results.
  • Expectation of Success: A POSITA would have had a high expectation of success, as combining the references involved applying a known software license management method to an online activation context, which is a form of software license management.

Ground 2: Obviousness over Schoch, Wyman, and Capps - Claims 3, 25, 31, and 37 are obvious over Schoch in view of Wyman and Capps.

• Prior Art Relied Upon: Schoch (Patent 6,460,140), Wyman (Patent 5,260,999), and Capps (Patent 6,711,682).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground built upon the Schoch-Wyman combination to address dependent claims requiring user-identifying data. Petitioner argued that the activation process in Schoch-Wyman was also a form of user registration. Capps taught an improved online registration system where a user could optionally provide identifying data (e.g., a user ID) or have one generated automatically. Petitioner contended that adding Capps's teachings to the Schoch-Wyman combination would render obvious the limitations of including "identifying data that identifies the user" (claim 3) within the transmitted user data and "archiving user data" (claims 25, 31, 37) at the remote service system.
  • Motivation to Combine: A POSITA would be motivated to incorporate Capps's registration techniques to enhance the Schoch-Wyman system. This would allow the service provider to collect valuable customer information for support and marketing, while Capps’s anonymous registration option would accommodate users with privacy concerns, making the system more flexible and user-friendly.

Ground 3: Obviousness over Schoch, Wyman, and Clark - Claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 are obvious over Schoch in view of Wyman and Clark.

• Prior Art Relied Upon: Schoch (Patent 6,460,140), Wyman (Patent 5,260,999), and Clark (Patent 6,343,280).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground presented an alternative to the base Schoch-Wyman combination. Petitioner asserted that Clark taught a method to improve security by having the user encrypt a software identifier (akin to Schoch's validation number) on the client device using a password. The user would then enter the password to decrypt the identifier locally before it was transmitted to a remote server. Because the password itself is never sent to the server, the server's verification would solely depend on receiving a valid identifier. This, Petitioner argued, further supported the contention that the remote server would count every valid request as an "attempt," regardless of any password-related issues, thus satisfying the key claim limitations.
  • Motivation to Combine: A POSITA would combine Clark's teachings to enhance the security of the Schoch-Wyman system. This modification would avoid transmitting passwords over an unsecure network and simplify the license administration task at the server, as it would no longer need to process password information.
• Additional Grounds: Petitioner asserted an additional obviousness challenge against claims 3, 25, 31, and 37 based on the combination of Schoch, Wyman, Clark, and Capps, arguing that Capps's registration techniques could be applied to the secure Schoch-Wyman-Clark system for the same reasons articulated in Ground 2.

4. Key Claim Construction Positions

• "attempt": Petitioner adopted the Board's construction from a prior IPR involving the ’696 patent (IPR2017-00301). The proposed construction, consistent with the Board's prior finding, was that "attempt" refers to "all attempts regardless of whether an attempt is successful or unsuccessful." This construction was critical to Petitioner's argument that Wyman's method of counting license requests upon receipt, before confirming successful use by the client, directly mapped to the claim language.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under 35 U.S.C. §314(a) would be inappropriate. It noted that while a prior IPR had been filed by different parties, the current petition raised entirely new prior art references and arguments. Petitioner asserted that the delay between the prior IPR and the current one was not due to gamesmanship, but rather was a direct result of the Patent Owner's litigation strategy of waiting more than two years after the first IPR was denied to file an infringement action against Microsoft.

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1, 3, 4, 9, 15, 20, 24, 25, 27, 30, 31, 36, and 37 of the ’696 patent as unpatentable.