The federal district court in Marshall, Texas, erred in holding that patent claims of three Smartflash LLC patents asserted against Apple Inc. were valid under 35 U.S.C. §101, according to the U.S. Court of Appeals for the Federal Circuit. The court concluded that the patent claims were directed to the abstract idea of conditioning and controlling access to data based on payment and failed to recite an inventive concept that transformed the claims into patent-eligible subject matter (Smartflash LLC v. Apple Inc., March 1, 2017, Prost, S.).
Smartflash’s three patents-in-suit, entitled "Data Storage and Access Systems," covered a portable data carrier for storing and paying for data, and computer systems for providing access to data to be stored. The patents sought to address the problem of data pirates by purportedly inventing systems comprising data carriers, or "terminals," that could receive and validate payments from users and then retrieve and provide data, such as audio, video, text, and software over the Internet.
Apple filed a motion for summary judgment seeking invalidity of claim 13 of U.S. Patent No. 7,334,720 (the ’720 patent), claim 32 of U.S. Patent No. 8,118,221 (the ’221 patent), and claims 26 and 32 of U.S. Patent No. 8,336,772 (the ’772 patent). The district court adopted a magistrate judge’s findings and recommendation that the claims were not invalid and directed to patent-eligible subject matter. Although the claims to were directed to the abstract idea of "conditioning and controlling access to data based on payment," the district court found that the claims included limitations that transformed the abstract idea into a patent-eligible invention because the claims "recite specific ways of using distinct memories, data types, and use rules that amount to significantly more than the underlying abstract idea."
The Federal Circuit agreed that the patent claims at issue were directed to the abstract idea of conditioning and controlling access to data based on payment, but found that the district court erred in finding that the claims recited inventive concepts sufficient to transform the abstract idea into a patent-eligible invention. The district court found that the claims recited "specific ways of managing access to digital content data based on payment validation through storage and retrieval of use status data and use rules in distinct memory types and evaluating the use data according to the use rules." However, merely storing, transmitting, retrieving, and writing data to implement an abstract idea on a computer does not transform the claim into a patent-eligible application. Smartflash’s asserted claims recited reading, receiving, and responding to payment validation data and, based upon the amount of payment, and access rules, allowing access to multimedia content. This type of Internet activity has previously been found ineligible. Also, "interfaces," "program stores," and "processors" are all generic computer components and do not, taken individually or as an ordered combination, "transform [the] abstract idea into a patent-eligible invention."
Because the claims were directed to an abstract idea and did not contain an inventive concept, the court reversed the district court’s holding.
The case is No. 2016-1059.
Attorneys: Aaron Martin Panner (Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC) and Nicholas O. Hunter, John Austin Curry, Jason Dodd Cassady, Bradley Wayne Caldwell, John Franklin Summers, and Hamad M. Hamad (Caldwell Cassady & Curry) for Smartflash LLC and Smartflash Technologies Limited. Mark Andrew Perry and Brian Buroker (Gibson, Dunn & Crutcher LLP) and Hervey Mark Lyon, Blaine H. Evanson, Jennifer Rho, Brett Rosenthal, James Richard Batchelder, Douglas Hallward-Driemeier, and Kevin John Post (Ropes & Gray LLP) for Apple Inc.
Companies: Smartflash LLC; Apple Inc.
MainStory: TopStory Patent FedCirNews
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