• Apple Inc. / Samsung Electronics Ltd et al. v. Smartflash LLCAll claims unpatentable
  PTAB · Nov 10, 2016 · CBM2015-00132 · APJ Gregg I Anderson · CBM · Final written decision

  Claims 1, 5, 8, and 10 are unpatentable under § 101 because they claim an abstract idea without an inventive concept.

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exception

    “We are persuaded that claims 1, 5, 8, and 10 are drawn to the abstract idea of conditioning and controlling access to content based on, for example, payment. Specifically, independent claim 1 recites “code to receive payment validation data . . . for said at least one selected item of multimedia content.” Independent claim 8 recites “code to control access to said selected content data item responsive to the payment validation data.” Claim 5 depends from claim 1 and recites “code to retrieve supplementary data via said wireless interface and output said supplementary data to said user using said display.” Claim 10 depends from claim 8 and recites “said data access terminal is integrated with a mobile communications device and audio/video player.” Furthermore, as discussed above, the ’772 patent discusses addressing recording industry concerns of data pirates offering unauthorized access to widely available compressed audio recordings. Ex. 1201, 1:23–57. The patent specification explains that these pirates obtain data either by unauthorized or legitimate means and then make the data available over the Internet without authorization. Id. The specification further explains that once data has been published on the Internet, it is difficult to police access to and use of it by Internet users who may not even realize that it is pirated. Id. The ’772 patent proposes to solve this problem by restricting access to data on a portable data carrier based upon payment validation. Id. at 1:61–2:3. The ’772 patent makes clear that the crux of the claimed subject matter is restricting access to stored content based on validation of payment. Id.” slip op. at 11

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive concept

    “2. Inventive Concept “A claim that recites an abstract idea must include ‘additional features’ to ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo, 132 S. Ct. at 1297). “This requires more than simply stating an abstract idea while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly, the prohibition on patenting an ineligible concept cannot be circumvented by limiting the use of an ineligible concept to a particular technological environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the mere recitation of generic computer components performing conventional functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every computer will include a ‘communications controller’ and ‘data storage unit’ capable of performing the basic calculation, storage, and transmission functions required by the method claims.”).” slip op. at 13

  • ExcludeMotion to exclude, grantedMotion to exclude, deniedMixed

    “Smartflash has not articulated a persuasive reason for excluding Mr. Wechselberger’s Declaration. Smartflash has not cited any authority requiring an expert to recite or apply the “preponderance of the evidence” standard in order for the expert opinion to be accorded weight. Under 37 C.F.R. § 42.1(d), we apply the preponderance of the evidence standard in determining whether Petitioner has established unpatentability. In doing so, it is within our discretion to determine the appropriate weight to be accorded to the evidence presented, including the weight accorded to expert opinion, based on the disclosure of the underlying facts or data upon which the opinion is based. Our discretion includes determining whether the expert testimony is the product of reliable principles and methods and whether the expert has reliably applied the principles and methods to the facts of the case. See FRE 702.” slip op. at 32

  Patent outcomesUS 8,336,772 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,336,772
• Apple Inc. / Samsung Electronics Ltd et al. v. Smartflash LLCAll claims unpatentable
  PTAB · Nov 10, 2016 · CBM2015-00132 · APJ Gregg I Anderson · CBM · Final written decision

  Claims 14, 19, and 22 are unpatentable under § 101 because they claim the abstract idea of conditioning and controlling access to content without an inventive concept.

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “We are persuaded that claims 14, 19, and 22 are drawn to the abstract idea of conditioning and controlling access to content based on, for example, payment. Specifically, independent claim 14 recites “code responsive to said user selection of said selected at least one item of multimedia content to transmit payment data relating to payment for said selected at least one item of multimedia content.” Independent claim 19 is similar and recites “code responsive to said user selection of said selected at least one content data item to transmit payment data relating to payment for said selected at least one content item.” Claim 22 depends from claim 19 and recites “wherein said data access terminal is integrated with a mobile communications device and audio/video player.”” slip op. at 11

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “claims are either field of use limitations—limiting the ideas of payment and controlling access to content to payment for retrieving “data” and controlling access to content based on “payment data” and “payment validation data”— or generic computer implementations, which Petitioner argues is insufficient to bring the claims within § 101 patent eligibility. Pet. 25–31. Specifically, Petitioner contends that the challenged claims “recite no more than generic computer elements and functions that were well-known, routine, and conventional to a POSITA at the time of filing.” Reply 6 (citations omitted); see id. at 10–12. Petitioner persuades us that claims 14, 19, and 22 of the ’772 patent do not add an inventive concept sufficient to ensure that the claims in practice amount to significantly more than claims on the abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of “generating tasks [based on] rules . . . to be completed upon the occurrence of an event” to be unpatentable even when applied in a computer environment and within the insurance industry). Specifically, we agree with and adopt Petitioner’s rationale that the additional elements of claims 14, 19, and 22 are field of use limitations and/or are generic features of a computer that do not bring these claims within § 101 patent eligibility. Pet. 25–31; Reply 4–6.” slip op. at 14

  • ExcludeMotion to exclude, deniedMixed

    “We agree with Petitioner. As noted above, Smartflash, as movant, has the burden to show that these exhibits are inadmissible. Smartflash’s reference to FRE 703 in unavailing because while this rule does not establish the admissibility of the exhibits, it also does not speak to whether these exhibits are inadmissible. Because Mr. Wechselberger attests that he reviewed these exhibits in reaching the opinions he expressed in this case, Smartflash has not shown that they are irrelevant under FRE 401 and 402. Accordingly, we decline to exclude Exhibits 1324, 1329, 1330, 1333, and 1335. We grant the motion as to Exhibit 1305.” slip op. at 30

  Patent outcomesUS 8,336,772 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,336,772
• Apple Inc. / Samsung Electronics Ltd et al. v. Smartflash LLCRehearing denied
  PTAB · Aug 24, 2016 · CBM2015-00033 · APJ Matthew R Clements · CBM · Rehearing

  The Board denied Smartflash’s rehearing request, leaving claims 25, 26, 30, and 32 unpatentable under § 101 because the request did not show the Board misapprehended or overlooked a matter.

  RulingsRehearing decision

  • RehearingRehearing, deniedDenied

    “The burden of showing a decision should be modified lies with the party challenging the decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was previously addressed in a motion, an opposition, or a reply.” slip op. at 3

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Other

    “Smartflash’s arguments are either new or were addressed in our Final Decision. For example, Smartflash’s argument that the challenged claims are not directed to an abstract idea (Req. Reh’g 11–13) is new, and therefore, improper in a request for rehearing, because Smartflash did not argue the first step of the analysis articulated in Mayo and Alice in its Patent Owner Response. See PO Resp. 15–29 (Patent Owner Response argues that claims are statutory under only the second step of Mayo and Alice); see also Paper 38 (transcript of oral hearing), 6:13–16 (Petitioner stating that “Patent Owner has presented no argument whatsoever to contest that its claims are directed to abstract ideas under the first prong of Mayo and Alice.”), id. at 6:17–18 (Petitioner also stating “It [] also never disputed the articulation of those abstract ideas”).” slip op. at 4

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptNot reached
  § 101 eligibilitycites Alice
  Patents in suitUS 8,336,772
• Apple Inc. / Samsung Electronics Ltd et al. v. Smartflash LLCAll claims unpatentable
  PTAB · May 26, 2016 · CBM2015-00033 · APJ Matthew R Clements · CBM · Final written decision

  Claims 25, 26, 30, and 32 are unpatentable under § 101 because they claim an abstract idea without an inventive concept.

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “We are persuaded that claims 25, 26, 30, and 32 are drawn to the abstract idea of conditioning and controlling access to content based on, for example, payment. Specifically, independent claim 25 recites “code to receive payment validation data . . . for said selected at least one item of multimedia content.” Independent claim 30 recites “code to receive payment validation data . . . for said selected at least one content data item.” Claim 26 depends from claim 25 and recites “code to present said second selected one or more items of retrieved multimedia content to a user via said display if access is permitted.” Claim 32 depends from claim 30 and recites “said data access terminal is integrated with a mobile communications device and audio/video player.” Furthermore, as discussed above, the ’772 patent discusses addressing recording industry concerns of data pirates offering unauthorized access to widely available compressed audio recordings. Ex. 1401, 1:23–57. The specification explains that these pirates obtain data either by unauthorized or legitimate means and then make the data available over the Internet without authorization. Id. The specification further explains that once data has been published on the Internet, it is difficult to police access to and use of it by Internet users who may not even realize that it is pirated. Id. The ’772 patent proposes to solve this problem by restricting access to data on a portable data carrier based upon payment validation. Id. at 1:61–2:3. The ’772 patent makes clear that the crux of the claimed subject matter is restricting access to stored data based on validation of payment. Id.” slip op. at 11

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “computer elements and functions that were well-known, routine, and conventional to a POSITA at the time of filing.” Reply 6 (citations omitted); see id. at 13–14. Apple persuades us that claims 25, 26, 30, and 32 of the ’772 patent do not add an inventive concept sufficient to ensure that the claims in practice amount to significantly more than claims on the abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of “generating tasks [based on] rules . . . to be completed upon the occurrence of an event” to be unpatentable even when applied in a computer environment and within the insurance industry). Specifically, we agree with and adopt Apple’s rationale that the additional elements of claims 25, 26, 30, and 32 are field of use limitations and/or generic features of a computer that do not bring these claims within § 101 patent eligibility. Pet. 24–29; Reply 4–6.” slip op. at 14

  • ExcludeMotion to exclude, grantedMotion to exclude, deniedMixed

    “We are persuaded by Apple that Exhibit 1402 is offered not for the truth of the matter asserted (i.e., the content of the ’772 patent), but as evidence of how Smartflash has characterized the ’772 patent. Thus, Smartflash has not persuaded us that Exhibit 1402 is evidence of the content of a writing or that it is cumulative to the ’772 patent. Furthermore, Smartflash has not persuaded us that Exhibit 1402 is irrelevant, at least because its characterization of the ’772 patent in prior proceedings is relevant to the credibility of its characterization of the ’772 patent in this proceeding. Smartflash contends that Exhibit 1402 does not contradict its characterization of the ’772 patent in this proceeding such that the credibility of Smartflash’s characterization is an issue. Paper 32, 3. Smartflash’s argument misses the point because the credibility of Smartflash’s characterization is for us to decide, and we have to consider the document at issue in making that determination. Further, as Apple notes (Paper 31, 2), Smartflash’s characterization of the ’772 patent in prior proceedings is relevant to Smartflash’s contention in this proceeding that the ’772 patent does not satisfy the “financial in nature” requirement for a covered business method patent review (Prelim. Resp. 5–11). Accordingly, we decline to exclude Exhibit 1402.” slip op. at 28

  • Expert testimonyPetitioner expert creditedDecided for petitioner

    “Smartflash has not articulated a persuasive reason for excluding Mr. Wechselberger’s Declaration. Smartflash has not cited any authority requiring an expert to recite or apply the “preponderance of the evidence” standard in order for the expert opinion to be accorded weight. Under 37 C.F.R. § 42.1(d), we apply the preponderance of the evidence standard in determining whether Apple has established unpatentability. In doing so, it is within our discretion to determine the appropriate weight to be accorded to the evidence presented, including the weight accorded to expert opinion, based on the disclosure of the underlying facts or data upon which the opinion is based. Our discretion includes determining whether the expert testimony is the product of reliable principles and methods and whether the expert has reliably applied the principles and methods to the facts of the case. See FRE 702.” slip op. at 32

  Patent outcomesUS 8,336,772 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,336,772
• Apple Inc. v. Smartflash LLCAll claims unpatentable
  PTAB · Mar 30, 2016 · CBM2015-00017 · APJ Matthew R Clements · CBM · Final written decision

  Claims 1, 2, 15, and 31 are unpatentable under § 101 because they claim an abstract idea without an inventive concept.

  RulingsFinal written decision

  • ExcludeMotion to exclude, grantedMotion to exclude, deniedMixed

    “We are persuaded that Exhibit 1202 is offered not for the truth of the matter asserted (i.e., the content of the ’598 patent), but as evidence of how Patent Owner has characterized the ’598 patent. Thus, Patent Owner has not persuaded us that Exhibit 1202 is evidence of the content of a writing or that it is cumulative to the ’598 patent. Furthermore, Patent Owner has not persuaded us that Exhibit 1202 is irrelevant, at least because its characterization of the ’598 patent in prior proceedings is relevant to the credibility of its characterization of the ’598 patent in this proceeding. Patent Owner contends that Exhibit 1202 does not contradict its characterization of the ’598 patent in this proceeding such that the credibility of Patent Owner’s characterization is an issue. Mot. 3. This argument misses the point because the credibility of Patent Owner’s characterization is for the Board to weigh after deciding the threshold issue of admissibility. As Petitioner notes (Opp. 2), Patent Owner’s characterization of the ’598 patent in prior proceedings is relevant to Patent Owner’s contention in this proceeding that the ’598 patent does not satisfy the “financial in nature” requirement for a covered business method patent review (Paper 18 (Preliminary Response), 5–10). Accordingly, we decline to exclude Exhibit 1202.” slip op. at 22

  • Expert testimonyPetitioner expert creditedDecided for petitioner

    “Patent Owner has not articulated a persuasive reason for excluding Mr. Wechselberger’s Declaration. Patent Owner has not cited any authority requiring an expert to recite or apply the “preponderance of the evidence” standard in order for the expert opinion to be accorded weight. Under 37 C.F.R. § 42.1(d), we apply the preponderance of the evidence standard in determining whether a petitioner has established unpatentability. In doing so, it is within our discretion to determine the appropriate weight to be accorded to the evidence presented, including the weight accorded to expert opinion, based on the disclosure of the underlying facts or data upon which the opinion is based. Our discretion includes determining whether the expert testimony is the product of reliable principles and methods and whether the expert has reliably applied the principles and methods to the facts of the case. See FRE 702.” slip op. at 25

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “We are persuaded that the challenged claims are drawn to a patent- ineligible abstract idea. Specifically, the challenged claims are directed to performing the fundamental economic practice of conditioning and controlling access to content (claims 1, 2, 15, and 31). For example, claim 1 recites “code for storing at least one content data item in the content data memory and at least one use rule in the use rule memory.” Claim 31 recites “evaluating the use status data using the one or more use rules to determine whether access to the content data item is permitted” and “enabling access to the content data item responsive to a determination that access to the content data item is permitted.”” slip op. at 7

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “The ’598 patent treats as well-known all potentially technical aspects of the challenged claims, which simply require generic computer components (e.g., interfaces, memory, program store, and processor). See Pet. Reply 5–8, 13–14 (citing Ex. 1201, 4:4–5, 16:46–50, 18:7–11). With respect to the “portable data carrier” recited in claim 1, for example, the Specification states it may be a generic device such as “a standard smart card.” Ex. 1201, 11:27–29; see also id. at 14:25–29 (“[l]ikewise data stores 136, 138 and 140 may comprise a single physical data store or may be distributed over a plurality of physical devices and may even be at physically remote locations from processors 128-134 and coupled to these processors via internet 142”), Fig. 6. Further, the claimed computer code performs generic computer functions, such as storing, retrieving, receiving, reading, evaluating, and enabling access to. See Pet. 32–33. The recitation of these generic computer functions is insufficient to confer specificity. See Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions.”). Moreover, we are not persuaded that claims 1, 2, 15, and 31 “recite specific ways of using distinct memories, data types, and use rules that amount to significantly more than” paying for and/or controlling access to content. See PO Resp. 11–12. The challenged claims generically recite several memories, including “content data memory,” “use rule memory,” “a program store,” and “payment data memory,” and generically recite several data types, including “data,” “content data items,” “use rules,” “code,” “payment data,” and “use status data.” We are not persuaded that the recitation of these memories and data types, by itself, amounts to significantly more than the underlying abstract idea. Patent Owner does not point to any inventive concept in the ’598 patent related to the way these memories or data types are constructed or used. In fact, the ’598 patent simply discloses these memories and data types with no description of the underlying implementation or programming. See Content Extraction and Transmission LLC, 776 F.3d at 1347 (“The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions.”). This recitation of generic computer memories and data types, being used in the conventional manner, is insufficient to confer the specificity required to elevate the nature of the claim into a patent-eligible application. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1294) (“We have described step two of this analysis as a search for an ‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent on the [ineligible concept] itself.’”) (brackets in original).” slip op. at 10

  Patent outcomesUS 8,061,598 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,061,598
• Samsung Electronics America, Inc. / Samsung Electronics Co., Ltd. et al. v. Smartflash LLCAll claims unpatentable
  PTAB · Mar 30, 2016 · CBM2015-00119 · APJ Jeremy M Plenzler · CBM · Final written decision

  Claim 11 is unpatentable under § 101 because it claims the abstract idea of controlling access to content without an inventive concept.

  RulingsFinal written decision

  • ExcludeMotion to exclude, deniedDenied

    “We are not persuaded by Petitioner’s argument. Patent Owner proffered this particular testimony not for purposes of showing validity of the patent claims at issue, but for purposes of challenging the credibility of Petitioner’s expert. Although we were not persuaded by this evidence, we did consider it for the purpose of deciding the issue of credibility. We, therefore, decline to exclude this testimony under FRE 401, 402, or 611(b).” slip op. at 21

  • Expert testimonyPetitioner expert creditedOther

    “We are not persuaded by Patent Owner’s arguments. Dr. Bloom has a Bachelor in Electrical Engineering, and a Masters and Ph.D. in Electrical and Computer Engineering. Ex. 1003 ¶¶ 15–17. He also has decades of experience in relevant technologies. Id. at ¶¶ 5–14. We are, therefore, not persuaded by Patent Owner’s argument that he has not provided sufficient proof that he is an expert. And as Petitioner correctly points out, an expert is not required to recite the “preponderance of the evidence” standard expressly in order for the expert testimony to be accorded weight, much less admissibility. Accordingly, we decline to exclude this testimony under FRE 702.” slip op. at 24

  • BurdenUnpatentable

    “2. Inventive Concept “A claim that recites an abstract idea must include ‘additional features’ to ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo, 132 S. Ct. at 1297). “This requires more than simply stating an abstract idea while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly, the prohibition on patenting an ineligible concept cannot be circumvented by limiting the use of an ineligible concept to a particular technological environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the mere recitation of generic computer components performing conventional functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every computer will include a ‘communications controller’ and ‘data storage unit’ capable of performing the basic calculation, storage, and transmission functions required by the method claims.”). Petitioner argues “[t]he claims of the ’458 patent . . . cover nothing more than the basic financial idea of enabling limited use of paid for and/or licensed content using ‘conventional’ computer systems and components.” Pet. Reply 11 (quoting Ex. 1003 ¶ 126). Petitioner persuades us that claim 11 of the ’458 patent does not add an inventive concept sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of “generating tasks [based on] rules . . . to be completed upon the occurrence of an event” to be unpatentable even when applied in a computer environment and within the insurance industry). Specifically, we agree with and adopt Petitioner’s rationale that the additional elements of the challenged claims are generic features of a computer that do not bring the challenged claim within § 101 patent eligibility. Pet. 23–29; Pet. Reply 11– 20.” slip op. at 9

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “We agree that the challenged claim is drawn to a patent-ineligible abstract idea. Specifically, the challenged claim is directed to conditioning and controlling access to content (which is analogous to the characterization of the abstract idea proposed by Petitioner). For example, claim 6 (from which claim 11 depends) recites “code to evaluate the use status data using the use rules data to determine whether access is permitted to the stored data” and “code to access the stored data when access is permitted” and claim 11 recites “code to write partial use status data” and that “wherein said use rules permit partial use of a data item.”7 As discussed above, the ’458 patent discusses addressing recording industry concerns of data pirates offering unauthorized access to widely available compressed audio recordings. Ex. 1001, 1:20–55. The ’458 patent proposes to solve this problem by restricting access to data on a device based upon satisfaction of use rules linked to payment data. Id. at 9:7–25. The ’458 patent makes clear that the claimed subject matter is directed to paying for data and providing access to data. See id. at 2:20–23 (“This invention is . . . particularly . . . relate[d] . . . to computer systems for providing access to data.”). Although the specification discusses data piracy on the Internet (see id. at 1:29–39), the challenged claims are not limited to the Internet. The underlying concept of the challenged claims, particularly when viewed in light of the ’458 patent specification, is controlling access to content, as Petitioner contends. As discussed further below, this is a fundamental economic practice long in existence in commerce. See Bilski, 561 U.S. at 611. We are, thus, persuaded, based on the ’458 patent specification and the language of the challenged claim, that claim 11 is directed to an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of” slip op. at 7

  Patent outcomesUS 8,033,458 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,033,458
• Samsung Electronics America, Inc. / Samsung Electronics Co., Ltd. et al. v. Smartflash LLCAll claims unpatentable
  PTAB · Mar 29, 2016 · CBM2014-00194 · APJ Jennifer S Bisk · CBM · Final written decision

  Claim 32 was held unpatentable under § 101 because it claims the abstract economic practice of controlling content access based on payment, using only generic computer components and functions.

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionDecided for petitioner

    “We are persuaded that claim 32 is drawn to a patent-ineligible abstract idea. Specifically, claim 32 is directed to performing the fundamental economic practice of conditioning and controlling access to content based on payment. For example, claim 32 recites “the at least one access rule specifying at least one condition for accessing the retrieved data written into the data carrier, the at least one condition being dependent upon the amount of payment associated with the payment data forwarded to the payment validation system.” Furthermore, as discussed above, the ’221 patent discusses addressing recording industry concerns of data pirates offering unauthorized access to widely available compressed audio recordings. Ex. 1001, 1:20–55. The patent specification explains that these pirates obtain data either by unauthorized or legitimate means and then make the data available over the Internet without authorization. Id. The specification further explains that once data has been published on the Internet, it is difficult to police access to and use of it by internet users who may not even realize that it is pirated. Id. The ’221 patent proposes to solve this problem by restricting access to data on a portable data carrier based upon payment validation. Id. at 1:59–2:4. The ’221 patent makes clear that the crux of the claimed subject matter is restricting access to stored data based on supplierdefined access rules and validation of payment. Id. at 1:59–2:15. Although the specification refers to data piracy on the Internet, claim 32 is not limited to the Internet. Claim 32 recites code to “read payment data from the data carrier,” “forward the payment data to a payment validation system,” “receive payment validation data from the payment validation system,” “retrieve data from the data supplier,” and “write the retrieved data into the data carrier.” The underlying concept of claim 32, particularly when viewed in light of the ’221 patent specification, is conditioning and controlling access to content based upon payment. As discussed further below, this is a fundamental economic practice long in existence in commerce. See Bilski, 561 U.S. at 611. We are, thus, persuaded, based on the ’221 patent specification and the language of claim 32 is directed to an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of intermediated settlement at issue in Alice was an abstract idea); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to be “generating tasks [based on] rules . . . to be completed upon the occurrence of an event”).” slip op. at 8

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptIneligibleUnpatentable

    “more than the basic financial idea of enabling limited use of paid for and/or licensed content using ‘conventional’ computer systems and components.” Paper 31, (“Reply 11”) (quoting Ex. 1003 ¶ 126). Petitioner persuades us that claim 32 of the ’221 patent does not add an inventive concept sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of “generating tasks [based on] rules . . . to be completed upon the occurrence of an event” to be unpatentable even when applied in a computer environment and within the insurance industry). Specifically, we agree with and adopt Petitioner’s rationale that the additional elements of claim 32 are generic features of a computer that do not bring claim 32 within § 101 patent eligibility. Pet. 24–29; Reply 11–21.” slip op. at 10

  • ExcludeMotion to exclude, deniedDenied

    “We are not persuaded by Samsung’s argument. Patent Owner proffered this particular testimony not for purposes of showing validity of the patent claim at issue, but for purposes of challenging the credibility of Samsung’s expert. Although we were not persuaded by this evidence, we did consider it for the purpose of deciding an issue of credibility. We, therefore, decline to exclude this testimony under FRE 401, 402, or 611(b).” slip op. at 23

  • Adverse judgmentOther

    “00102, we issued a Final Written Decision determining claims 1, 2, and 11– 14 unpatentable under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC, Case CBM2014-00102, (PTAB Sept. 25, 2015) (Paper 52). On March 18, 2016, however, Patent Owner filed an authorized motion to terminate this proceeding as to claims 2 and 11 stating that “[o]n March 4, 2016, pursuant to Fed. R. App. P. 42(b), the United States Court of Appeals for the Federal Circuit dismissed [Patent Owner’s] appeal of [the final written decision in CBM2014-00102 determining] that claims 2 and 11 of the ’221 Patent are unpatentable.” Paper 50, 2. 4 We are persuaded that the particular facts of this proceeding now counsel termination of our consideration of claims 2 and 11. 37 C.F.R. § 42.72. Claims 2 and 11 of the ’221 patent have been finally cancelled and any decision we might reach in this proceeding regarding the patentability of these claims would be moot and purely advisory. We do not see how the just, speedy, and inexpensive resolution of every proceeding (37 C.F.R. § 42.1(b)) would be secured by rendering a final written decision regarding these claims. Accordingly, we terminate this review as to claims 2 and 11 and consider below only the remaining challenged claim—claim 32.” slip op. at 3

  Patent outcomesUS 8,118,221 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski
  Patents in suitUS 8,118,221
• E-Loan, Inc. v. Imx, Inc.All claims unpatentable
  PTAB · Feb 16, 2016 · CBM2015-00012 · APJ James P Calve · CBM · Final written decision

  Claims 7, 8, 26, and 27 are unpatentable under § 101 because they claim the abstract idea of loan processing implemented with generic computers.

  RulingsFinal written decision

  • PTAB / AIA Trials › Institution threshold (reasonable likelihood / more likely than not)InstitutedInstituted

    “I. BACKGROUND Petitioner E-Loan, Inc. (“E-Loan”) filed a Petition (Paper 1, “Pet.”) seeking a covered business method patent review of claims 7, 8, 26, and 27 of U.S. Patent No. 5,995,947 (Ex. 1001, “the ’947 patent”). Patent Owner IMX, Inc. (“IMX”) filed a Preliminary Response. Paper 6 (“Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 324. Based on these submissions, we instituted trial as to claims 7, 8, 26, and 27 of the ’947 patent. Paper 7 (“Dec. to Inst.”). IMX filed a Response. Paper 11 (“PO Resp.”). E-Loan then filed a Reply. Paper 12 (“Pet. Reply”).” slip op. at 2

  • PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner

    “unconstitutional. PO Resp. 14–16. IMX argues that issued patents are no longer under the jurisdiction of the U.S. Patent and Trademark Office (“USPTO”) and may be set aside, annulled, or corrected only by the courts of the United States, not by the USPTO or PTAB. Id. at 14–15. IMX argues that post-grant proceedings to invalidate patents deprive patent owners of due process and invade the province of Article III courts. Id. at 16. IMX’s arguments are not persuasive in view of the recent decision of the United States Court of Appeals for the Federal Circuit in MCM Portfolio LLC v. Hewlett-Packard Co., No. 2015-1091, 2015 WL 7755665 (Fed. Cir. Dec. 2, 2015), which held that Congress can grant authority to the USPTO to correct or cancel issued patents. MCM Portfolio, 2015 WL 7755665, at *5. Congress has done so by creating inter partes reexamination proceedings, ex parte reexamination proceedings, inter partes review, post-grant review, and covered business method patent review. Id. (citations omitted). As stated with regard to the inter partes review provisions at issue in MCM Portfolio, “Supreme Court precedent demonstrates that these statutes, and particularly the inter partes review provisions, do not violate Article III.” Id.” slip op. at 9

  • Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)Term construed board ownOther

    “We interpret “can bid on loan applications” in claim 7 and “capable of submitting bids on loan applications” in claim 26 as “can offer to make loans on loan applications that are pending in the database.” This interpretation is consistent with the claims. Claim 1 recites a method for processing loan applications including “maintaining a database of pending loan applications and their statuses at a database server.” Dependent claim 7 recites “said lender can search the database for particular desired types of loans, and can bid on loan applications.” Ex. 1001, 15:26–27 (emphasis added).” slip op. at 10

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “E-Loan has established, by a preponderance of evidence, that each of the challenged claims is directed to a fundamental economic or longstanding commercial practice of loan processing. The ’947 patent describes the conventional loan processes as involving large amounts of information that must be collected, compared, evaluated, and disseminated among parties to a transaction so lenders can offer loans at competitive rates. Ex. 1001, 1:9–17. Parties include lenders, borrowers, mortgage brokers, appraisers, regulatory agencies, and mortgage insurance companies. Id. at 1:17–21. Conventional processes required parties to collect nearly all loan application information by hand, transmit it on paper applications, and compare loan information by hand, according to each party’s role of loan evaluation, property appraisal, financial market evaluation, and setting lending rates with rate sheets. Id. at 1:22–27. Thus, parties to a conventional loan transaction monitor loan status and search and modify information in loan applications and loan processes. Claim 1 automates this known method and system of processing loan applications by maintaining a database of pending loan applications and their statuses at a database server where each party to a loan can search and modify that database consistent with their role in the transaction by requests to the server from client devices. Claim 19 recites a system for processing loan applications with a database of pending loan applications including status information and a transaction server for responding to requests of parties to the loan applications to search and modify the database consistent with their roles in the transaction. Whereas conventional loan processing required human beings to collect, compare, evaluate, and disseminate loan applications and loan information by hand, claims 1 and 19 recite the use of a database and transaction server to maintain loan applications so parties can search and modify the loan applications using those computer components instead of using pen and paper to perform these processes.” slip op. at 16

  Patent outcomesUS 5,995,947 unpatentable
  Claim construction§ 101 eligibilitycites Alice
  Patents in suitUS 5,995,947

Holdings, summaries, rulings, issues, outcomes, winners and claim constructions shown for a decision were generated by a large language model reading the opinion. They are a guide to the decision, not the decision. Confirm every one against the court's own text before relying on it. Outcomes read from the patent owner’s side. Party names are extracted from the decision and are missing on about 900 short Director denials and scans, which carry the trial number instead.