Takeaway: Payment validation is a financial activity, and conditioning data access based on payment validation amounts to a financial service.

In its Decision, the Board denied institution of a covered business method (CBM) patent review of claims 5, 10, 14, 26, and 32 of U.S. Patent No. 8,336,772.

The ’772 patent relates to “a portable data carrier for storing and paying for data and to computer systems for providing access to data to be stored” and the “corresponding methods and computer programs.” It describes providing portable data storage together with a means for conditioning access to that data upon validated payment.

The Board began with claim construction, applying the “broadest reasonable interpretation” standard, under which claim terms are given their broadest reasonable interpretation in light of the specification in which they appear. The Board construed the term “use rule” as “a rule specifying a condition under which access to content is permitted.”

The Board then considered whether the ’772 patent is a covered business method patent. First, it agreed with Petitioner that claim 8, from which challenged claim 10 depends, is “directed towards activities that are financial in nature, namely data access conditioned on payment validation.” In particular, the Board was “persuaded that payment validation is a financial activity, and conditioning data access based on payment validation amounts to a financial service.” Patent Owner argued that “financial product or service” was intended to be interpreted more narrowly, as covering technology limited to the financial industry, but the Board disagreed. The Board similarly was not persuaded by Patent Owner’s argument that “claim 8 is not directed to an apparatus or method that is financial in nature because claim 8 ‘omits the specifics of how payment is made,’” finding no basis for such a requirement. Second, the Board concluded that the ’772 patent is not a patent for a technological invention, noting that the patent “makes clear that the asserted novelty of the invention is not in any specific improvement of software or hardware, but in the method of controlling access to data,” and that the “problem” solved by claim 8 is the “business problem” of “data piracy.”

Turning to the merits, the Board considered whether claims 5, 10, 14, 26, and 32 are anticipated under 35 U.S.C. § 102(b) by Ginter. The Board concluded that Ginter does not disclose “code to request identifier data . . . ” or “use rules” as recited in the claims.

Accordingly, the Board denied the petition to institute a covered business method patent review of the ’772 patent.

Samsung Electronics America, Inc. v. Smartflash LLC, CBM2014-00200
Paper 9: Decision Denying Institution of Covered Business Method Patent Review
Dated: March 30, 2015
Patent: 8,336,772 B2
Before: Jennifer S. Bisk, Rama G. Elluru, Gregg I. Anderson, Matthrew R. Clements, and Peter P. Chen
Written by: Anderson
Related Proceedings: Smartflash LLC v. Apple, Inc., Case No. 6:13-cv-447 (E.D. Tex.); Smartflash LLC v. Samsung Electronics Co., Case No. 6:13-cv-448 (E.D. Tex.); Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D. Tex.); CBM2014-00102; CBM2014-00106, CBM2014-00108; CBM2014-00112; CBM2014-00110; CBM2014-00111; CBM2014-00204; CBM2014-00190; CBM2014-00192; CBM2014-00193; CBM2014-00194; CBM2014-00196; CBM2014-00197; CBM2014-00198; and CBM2014-00199