Apple Inc.v.Contentguard Holdings, Inc.

Patent Trial and Appeal Board

Jul 10, 2015

13584782 (P.T.A.B. Jul. 10, 2015)

Trials@uspto.gov Paper 9
571-272-7822 Entered: July 10, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

APPLE INC.,
Petitioner,

v.

CONTENTGUARD HOLDINGS, LLC,
Patent Owner.
____________

Case IPR2015-00448
Patent 8,370,956 B2
____________

Before KARL D. EASTHOM, GLENN J. PERRY, and
PATRICK R. SCANLON, Administrative Patent Judges.

EASTHOM, Administrative Patent Judge.

DECISION
Denying Inter Partes Review
37 C.F.R. § 42.108

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I. INTRODUCTION
Petitioner, Apple Inc., filed a Petition requesting inter partes review
of claims 1–18 of U.S. Patent No. 8,370,956 B2 (“the ’956 patent,”
Ex. 1005). Paper 1 (“Pet.”). Patent Owner, ContentGuard Holdings Inc.,
responded with a Preliminary Response. Paper 8 (“Prelim. Resp.”). We
have jurisdiction under 35 U.S.C. § 314, which provides that an inter partes
review may not be instituted “unless . . . there is a reasonable likelihood that
the petitioner would prevail with respect to at least 1 of the claims
challenged in the petition.” Id. at § 314(a).
For the reasons set forth below, we determine that Petitioner does not
demonstrate a reasonable likelihood of prevailing in showing the
unpatentability of claims 1–18 of the ’956 patent. Accordingly, we deny
institution of inter partes review.
A. Related Matters
Petitioner indicates that the ’956 patent was asserted against it by
Patent Owner in several lawsuits in U.S. district courts. See Pet. 2.
Petitioner filed two other petitions seeking inter partes review of the
‘956 patent: Cases IPR2015-00446 and IPR2015-00447. Petitioner also
filed petitions in Cases IPR2015-00351–358, 399, 400, and 440–458,
challenging related U.S. Patent Nos. 6,963,859; 7,225,160; 7,269,576;
7,523,072; 7,774,280; 8,001,053; 8,393,007; and 8,583,556.
B. The ’956 Patent (Ex. 1005)
The ’956 patent describes a system for curbing unauthorized copying
and transmission of electronic publications, which it describes as distributing
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and enforcing usage rights for digital works. See Ex. 1005, 1:24–60. “[T]he
terms ‘digital work,’ ‘work,’ and ‘content’ refer to any work that has been
reduced to a digital representation. . . . includ[ing] any audio, video, text, or
multimedia work and any accompanying interpreter (e.g. software) that may
be required for recreating the work.” Id. at 6:11–15. Usage rights refer to
rights granted to a recipient of a digital work that define the manner in which
a digital work may be used and distributed. Id. at 6:17–20. The disclosed
invention provides the owner of a digital work the flexibility to distribute the
digital work as desired. Id. at 3:66–4:15.
The system attaches usage rights to the digital work, including copies
thereof, and stores them in repositories. Id. at 6:24–44. A “repository”
device, described as being “trusted,” not only stores the digital works, but
enforces the usage rights of the digital works, controls access to digital
works, bills for access to digital works, and maintains the security and
integrity of the digital works stored therein. Id. at 6:30–44.
Independent claims 1, 7, and 13 require that a recipient device be
“determined to be trusted.” The Specification discloses using an
“identification certificate” and a “registration transaction” to determine if a
device is trusted: “Identification certificates are the means by which a
repository is identified as ‘trustworthy.’ The use of identification certificates
is described below with respect to the registration transaction.” Id. at 7:44–
48. According to a Glossary in the Specification, an “Identification (Digital)
Certificate” is “a signed digital message that attests to the identity of a
possessor. Typically, digital certificates are encrypted in the private key of a
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well-known master repository.” Id. at 49:55–59. The Specification also
discloses that “[a]s a prerequisite to operation, a repository will require
possession of an identification certificate,” and that “identification
certificates 1306 are required to enable the use of the repository.” Id. at
13:14–15, 14:27–29.
According to the Specification, a “Registration Transaction[]” is
“[t]he protocol used between repositories to establish a trusted session.” Id.
at 50:5–7. The Specification describes registration transactions further as
follows:
The registration transaction between two repositories is
described with respect to FIGS. 16 and 17. The steps described
are from the perspective of a “repository-1” registering its
identity with a "repository-2.” The registration must be
symmetrical so the same set of steps will be repeated for
repository-2 registering its identity with repository-1. Referring
to FIG. 16, repository-1 first generates an encrypted registration
identifier, step 1601 and then generates a registration message,
step 1602. A registration message is comprised of an identifier
of a master repository, the identification certificate for the
repository-1 and an encrypted random registration
identifier. The identification certificate is encrypted by the
master repository in its private key and attests to the fact
that the repository (here repository-1) is a bona fide
repository. The identification certificate also contains a
public key for the repository, the repository security level and
a timestamp (indicating a time after which the certificate is no
longer valid.) The registration identifier is a number generated
by the repository for this registration. The registration
identifier is unique to the session and is encrypted in repository-
1’s private key. The registration identifier is used to improve
security of authentication by detecting certain kinds of
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communications based attacks. Repository-1 then transmits the
registration message to repository-2, step 1603.
Id. at 26:46–27:2 (emphases added).
As this passage shows, one of the ways that the system determines, or
“attests to the fact that the repository . . . is a bona fide repository,” is to
include “the repository security level” in the identification certificate. Table
2 in the ’956 patent Specification lists different security levels for
repositories. Id. at 15:1–50.
C. Illustrative Claim
Claims 1, 7, and 13 are independent. Claim 1 is illustrative of the
challenged claims:
1. A computer-implemented method of rendering digital
content by at least one recipient computing device in
accordance with usage rights information, the method
comprising:
receiving the digital content by the at least one recipient
computing device from at least one sending computing device
only if the at least one recipient computing device has been
determined to be trusted to receive the digital content from
the at least one sending computing device;
receiving, by the at least one recipient computing device,
a request to render the digital content;
determining, based on the usage rights information,
whether the digital content may be rendered by the at least one
recipient computing device;
and rendering the digital content, by the at least one
recipient computing device, only if it is determined that the
content may be rendered by the at least one recipient computing
device.
Ex. 1001, 50:55–51:4 (emphasis added).
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D. Asserted Grounds of Unpatentability
Petitioner contends that claims 1–18 of the ’956 patent are
unpatentable under 35 U.S.C. § 103 based on the combination of U.S. Patent
No. 5,557,518 (Ex. 1020, “Rosen”) and EP0567 800 A1 (Ex. 1021,
“Hartrick”).
1
See Pet. 3, 54; Prelim. Resp. 12, 33. Petitioner also relies
upon the Declaration of Alan Sherman Regarding U.S. Patent Nos.
6,963,859; 7,523,072; 8,370,956; 8,393,007; 7,269,576. Ex. 1013
(“Sherman Declaration”).
II. CLAIM CONSTRUCTION
The ’956 patent, effectively filed on November 23, 1994, expired on
November 23, 2014. See Pet. 8; Prelim. Resp. 26. Accordingly, the claims
must be construed using their ordinary and customary meaning, as would be
understood by a person of ordinary skill in the art, at the time of the
invention, in light of the language of the claims, the specification, and the
prosecution history of record. See Phillips v. AWH Corp., 415 F.3d 1303,
1313–17 (Fed. Cir. 2005) (en banc)); In re Rambus, 694 F.3d 42, 46 (Fed.
Cir. 2012) (“[T]he Board’s review of the claims of an expired patent is
similar to that of a district court’s review.”).
As noted above, the ’956 patent’s Appendix provides a “Glossary”
defining many of the claim terms. Ex. 1005 at 49:1–50:52. These explicit

1
The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284 (2011), revised 35 U.S.C. § 103, effective March 16, 2013.
Because the ’956 patent was filed before March 16, 2013, our references and
citations to § 103 in this decision are to the pre-AIA version.
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definitions, and other explicit definitions in the Specification, largely control
the construction of many claim terms. The Board previously construed the
meaning of certain terms in proceedings involving related patents (Cases
IPR2013-00133, -00134, -00137, and -00138). According to Patent Owner
and Petitioner, the District Court for the Eastern District Court of Texas
issued similar claim constructions to the Board’s prior constructions.
Prelim. Resp. 30 (citing Ex. 2001). The parties largely agree that the
Board’s and the District Court’s similar claim constructions should control,
with some exceptions that do not appear to be material to a dispute here. See
Pet. 7–21; Prelim. Resp. 29–36; Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,
200 F.3d 795, 803 (Fed. Cir. 1999) (only terms in controversy need to be
construed and only to the extent necessary to resolve the controversy).
Considering the parties’ positions, the ’956 patent Specification, and
the record, we adopt the following constructions for purposes of this
Decision only.
A. “Trusted” (Claims 1, 7, 13)
According to the Glossary, a “repository is a trusted system in that it
maintains physical, communications and behavioral integrity.” Ex. 1005 at
50:20–22. Accordingly, the Specification indicates, and the parties agree,
that the term “trusted” means “maintains physical, communications, and
behavioral integrity, and supports usage rights.” See Ex. 1005, 6:42–44,
50:20–22; Prelim. Resp. 29–30; Pet. 15–17; Ex. 2001, 13, 15.

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B. Physical, Communications, and Behavioral Integrity –Trusted
These terms are not in material dispute, but beg interpretation because
they serve to define the claim term “trusted.” The term “physical integrity”
refers to the “integrity of the physical devices themselves. . . . [and] applies
both to the repositories and to the protected digital works.” Ex. 1005, 12:8–
10. Higher security classes may include sensors to preclude tampering on
secure cases. See Ex. 1005, 12:10–13. The term “physical integrity” means
“preventing access to information by a non-trusted system.” See id. at
12:17–18; Pet. 18; Prelim. Resp. 27. The term “communications integrity”
means “only communicates with other devices that are able to present proof
that they are trusted systems, for example, by using security measures such
as encryption, exchange of digital certificates, and nonces.” See Ex. 1005,
12:34–46; Pet. 18; Prelim. Resp. 27. The term “behavioral integrity” means
“requiring software to include a digital certificate in order to be installed in a
trusted device.” See Ex. 1005, 12:47–63; Pet. 18; Prelim. Resp. 28.
C. “Recipient . . . Determined to be Trusted” (Claims 1, 7, 13)
Claim 1 recites “receiving the digital content by the at least one
recipient computing device from at least one sending computing device only
if the at least one recipient computing device has been determined to be
trusted to receive the digital content from the at least one sending computing
device.” Claims 7 and 13 recite similar phrases.
Without explicitly setting forth a claim construction for “determined
to be trusted,” Petitioner contends that “the sending computing device
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determines whether the recipient device or apparatus is ‘trusted’ by
validating the recipient’s digital certificate.” See Pet. 16 (citing Ex. 1013
¶¶ B101–03); see also Pet. 17 (similar contention). Petitioner essentially
equates the terms “digital certificate” and “identification certificate” and
contends that they are “certified by a master device.” See Pet. 15. The
Glossary supports equating the two by using the terms interchangeably. See
Ex. 1005, 49:55–56 (defining “Identification (Digital) Certificate”).
According to the ’956 patent, “[i]dentification certificates are the
means by which a repository is identified as ‘trustworthy.’” Ex. 1005, 7:44–
46. As discussed above, the Specification states that the “identification
certificate . . . attests to the fact that the repository . . . is a bona fide
repository.” Id. at 26:57–60.
Therefore, on this record, we construe “determined to be trusted” to
mean “using an identification or digital certificate to attest to the fact that a
recipient is a trusted device.”
III. ANALYSIS
A. Rosen’s Teachings
Rosen discloses an electronic commerce system for securely
exchanging electronic merchandise and payments. Ex. 1020, Abstract. The
system includes a customer trusted agent communicating with a money
module, a merchant trusted agent communicating with another money
module, and the two trusted agents communicating with each other. Id. at
Abstract, Fig. 1.

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Figure 1 of Rosen follows:

Figure 1 depicts a block diagram of Rosen’s system, which includes
customer trusted agent (CTA) 2, merchant trusted agent (MTA) 4, and
money modules 6. MTA 4 transfers electronic merchandise to CTA 2, and
in response, first money module 6 transfers electronic money to second
money module 6. See id. at Abstract, Fig. 1, 4:33–38. Transactions are
encrypted. Id. at Abstract.
According to Rosen, “[e]lectronic merchandise is any goods that can
be represented in electronic form, and in the preferred embodiment . . .
consists of either a ticket or an encrypted electronic object (EO) and its
associated decryption ticket.” Id. at 4:41–45. “Together, the encrypted
electronic object and its decryption ticket comprise the electronic
merchandise transferred by the merchant.” Id. at 4:62–64. Any third party
or receiving customer must have access to the decryption ticket to access the
encrypted electronic object. Id. at 4:65–5:1. “[T]he decryption ticket, . . . is
the ‘property’ of the CTA and may only be used upon successful completion
of the purchase transaction.” Id. at 5:1–3.

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B. Hartrick’s Teachings
Hartrick discloses a data processing system that enforces payments of
royalties when copying an electronic book. See Ex. 1021, Abstract. A
publisher includes royalty payment information either in the structured text
of the book or in a file that accompanies the book. The publisher stores the
book in a storage medium using compacted, tokenized text. Id. at 5:48–57.
To read the book from the storage medium, a user employs a special reading
book program and a royalty payment program at his workstation. The
reading program converts the text into source text capable of being displayed
on a display screen. If a user attempts to copy the book or transmit it over a
modem, the royalty payment program forces the user to pay a royalty. See
id. at 6:1–22. The system employs structured document tags within a
structure document to implement the royalty payments. See id. at 10:1–18.
C. Procedural Defects
As a threshold matter, the Petition includes several significant
procedural defects. A petition for inter partes review must “identif[y], in
writing and with particularity, each claim challenged, the grounds on which
the challenge to each claim is based, and the evidence that supports the
grounds for the challenge to each claim.” 35 U.S.C. § 312(a)(3).
According to 37 C.F.R. § 42.104(b)(4), a petition for inter partes review
“must identify . . . [h]ow the construed claim is unpatentable under the
statutory grounds” on which the petitioner challenges the claims, and “must
specify where each element of the claim is found in the prior art patents or
printed publications relied upon.” Rule 42.104(b)(5) adds that the Petition
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must “identify[] specific portions of the evidence that support the
challenge.” Similarly, 37 C.F.R. § 42.22(a)(2) states that each petition must
include “[a] full statement of the reasons for the relief requested, including
a detailed explanation of the significance of the evidence including material
facts, and the governing law, rules, and precedent.” The Office Patent Trial
Practice Guide suggests that parties requesting inter partes review should
“avoid submitting a repository of all the information that a judge could
possibly consider, and instead focus on concise, well-organized, easy-to-
follow arguments supported by readily identifiable evidence of record.”
77 Fed. Reg. 48,756, 48,763 (Aug. 14, 2012).
We agree with the Patent Owner that the Petition fails to satisfy at
least these rule requirements. See Prelim. Resp. 4–10. The Petition
comprises vague, nested string citations to broad swaths of the references,
the Sherman Declaration, and internal cross-references to whole sections of
the Petition. See, e.g., Pet. 50–51 (discussing the preamble of claim 1, and
citing inter alia, Pet. §§ IV.A.1–3, A.5, B3; Ex. 1013 ¶¶ E20, E53–E65,
E117, E118, E142, E194). Without counting internal cross-citations within
the cited sections of the Petition and Sherman Declaration, this citation to
the Petition spans 11 pages of the Petition and 18 paragraphs of the Sherman
Declaration.
Similarly, the analysis of (what the Petition identifies as) element c of
claim 1 spans less than about one page of the Petition, but cites to 14
paragraphs of the Sherman Declaration and six pages of internal sections of
the Petition. See Pet. 51–52 (citing Pet. §§ III.D.4, IV.A.5; Ex. 1013
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¶¶ E53–65, E196). Again, this count does not include the further internal
citations and cross-references contained in the cross-cited portions of the
Petition and the Sherman Declaration. The same problem continues for the
remaining claim elements. For example, although the unpatentability
analysis of the last claim 1 element, element e, involves about thirteen lines
in the Petition, it cites 32 paragraphs of the Sherman Declaration and about
ten pages of the Petition. See Pet. 52–53 (citing Pet. §§ 1V.B.3, IV.C,
IV.D.1, Ex. 1013 ¶¶ E74–E98, E115–E118, E142, E199–E200. These
nested citations to so much of the record obscure what exactly Petitioner
relies upon as teaching or suggesting the claim elements.
The Petition’s labyrinthine structure exacerbates the clarity problems
caused by the nested citations. The Petition’s unpatentability analysis begins
with a general discussion of each reference. Pet. 23–38. Although this first
section quotes heavily from each reference, it also includes extensive
citations to the Sherman Declaration and various characterizations of the
references. See id. Next, the Petition describes a hypothetical, integrated
system that purports to combine Rosen’s “scheme” using Hartrick’s
“techniques.” Id. at 38–44. The Petition then explains that a person of
ordinary skill would have recognized that the hypothetical Rosen-Hartrick
system would have suggested the claim terms “usage rights,” “repositories,”
and “digital documents.” Id. at 44–51. Finally, the Petition maps the claims
onto this hypothetical combined system. See id. at 51–60. This mapping
relies on all the previous summaries and descriptions. Id. Thus, the
unpatentability analysis relies on Petitioner’s characterization and
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description of a hypothetical operation of a hypothetical implementation of
the combined system. The result of all these layers of abstraction is that the
final unpatentability analysis is at least two or three levels removed from the
actual disclosure of the references. Petitioner’s approach completely blurs
the line between the claims, the actual teachings, Petitioner’s modifications
to the teachings, and Petitioner’s characterizations of those teachings. This
approach improperly shifts the burden of deciphering Petitioner’s arguments
onto Patent Owner and the Board, which, as discussed above, is counter to
the statutory and regulatory provisions governing inter partes review
proceedings, and the best practices outlined in the Office Patent Trial
Practice Guide.
The lack of clarity in the Petition is further compounded by the
improper incorporation by reference of the Sherman Declaration. As
discussed above, the Petition’s conclusory statements cite to broad swaths of
the lengthy Sherman Declaration. Without referring to the Sherman
Declaration, many sections of the Petition would be unclear. The Petition’s
practice of citing multiple pages of the Sherman Declaration to support
conclusory statements and, more generally, using the Sherman Declaration
to vastly expand its analysis and reasoning, violates our rules in two
respects.
First, this practice amounts to incorporation by reference—which is
impermissible under our rules. See 37 C.F.R. § 42.6(a)(3) (“Arguments
must not be incorporated by reference from one document into another
document.”); Cisco Sys., Inc. v. C-Cation Techs., LLC, Case IPR2014-
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00454, slip op. at 7–10 (PTAB Aug. 29, 2014) (Paper 12) (informative).
This incorporation by reference from the 474-page Sherman Declaration into
the Petition “serves to circumvent the [60-]page limit[] imposed on petitions
for inter partes review, while imposing on our time by asking us to sift
through [hundreds of] pages of [the] Declaration (including numerous pages
of claim charts) to locate the specific [relevant] arguments.” Cisco Sys.,
Inc., IPR2014-00454, at 10 (Paper 12) (informative); see 37 C.F.R.
§ 42.24(a)(1)(i). Arguments and information that are not presented and
developed in the Petition, and instead are incorporated by reference to the
Sherman Declaration, are not entitled to consideration.
Second, the Petition’s consistent citation to voluminous portions of
the Sherman Declaration, which generally include additional internal cross-
references, runs afoul of the particularity and specificity required of
supporting evidence under the Board’s governing rules. See 37 C.F.R.
§§ 42.22(a)(2), 42.104(b)(4)–(5).
The Petition also includes 63 exhibits totaling over 14,000 pages.
Petitioner asserts that all exhibits are relied upon in the Petition. See Pet. 3
(“The evidence relied upon in support of this petition is listed in
Attachment B.”). Many of the exhibits, however, are not cited in the
Petition for support. Petitioner filed the Sherman Declaration in at least
seven other IPR petitions, challenging a different patent and/or asserting a
different set of prior art. As noted above, the Office Patent Trial Practice
Guide cautions that petitioners should “avoid submitting a repository of all
the information that a judge could possibly consider, and instead focus on
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concise, well-organized, easy-to-follow arguments supported by readily
identifiable evidence of record.” 77 Fed. Reg. at 48,763. The Petition
widely misses that mark.
Based on the deficiencies addressed above, the Petition fails to (1)
specify sufficiently where the limitations of the challenged claims are taught
or suggested by Rosen or Hartrick, and (2) provide a sufficiently detailed
explanation of the significance of the citations to these references and the
Sherman Declaration—as required under 37 C.F.R. § 42.22(a)(2) and 37
C.F.R. § 42.104(b)(4)–(5).
D. Defects in the Proffered Obviousness Analysis
In addition to the procedural deficiencies, Petitioner’s analysis of the
asserted ground of obviousness over Rosen and Hartrick is deficient.
Petition’s obviousness analysis does not provide a proper Graham analysis,
and lacks sufficient articulated reasons with rational underpinning to support
the proposed modifications, thereby showing it relies upon improper
hindsight.
1. Insufficient Information for Graham Analysis
A patent claim is unpatentable as obvious under 35 U.S.C. § 103(a) if
“the differences between the subject matter sought to be patented and the
prior art are such that the subject matter as a whole would have been obvious
at the time the invention was made to a person having ordinary skill in the
art to which said subject matter pertains.” KSR Int’l Co. v. Teleflex Inc., 550
U.S. 398, 406 (2007). Resolving the legal conclusion of obviousness
requires resolving the following underlying factual determinations: (1) “the
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scope and content of the prior art,” (2) “differences between the prior art and
the claims at issue,” (3) “the level of ordinary skill in the pertinent art,” and
(4) any “secondary considerations,” or objective indicia, of nonobviousness.
Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17–18 (1966). In other
words, these underlying factual determinations “must be considered by the
trier of fact” in an obviousness analysis. ATD Corp. v. Lydall, Inc., 159 F.3d
534, 546 (Fed. Cir. 1998).
As Patent Owner contends, the Petition fails to identify sufficiently
the differences between any claim of the ’956 patent and the asserted prior
art references, Rosen and Hartrick. See Prelim. Resp. 6–7, 42; Pet. 22–60.
Rather than addressing these differences, the Petition creates a hypothetical
Rosen-Hartrick system—based on how a person of ordinary skill in the art
allegedly “would” or “could” combine the two references to create an
integrated system—in an analysis largely divorced from specific claim
limitations. See Pet. 38–44. The Petition then argues, in conclusory fashion,
that this hypothetical system “would” meet each of the limitations of the
claims. See id. at 50–60. This analysis—which compares the challenged
claims to a hypothetical integrated system that allegedly implements aspects
of Rosen and Hartrick and the knowledge of one of ordinary skill in the
art––obscures a meaningful comparison of the claim limitations to the
individual prior art references. As Patent Owner contends, the analysis fails
to explain with requisite particularity which claim limitations are absent
from Rosen or Hartrick. See Prelim. Resp. 6–7, 42. Therefore, the Petition
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fails to provide sufficient information regarding its proffered ground of
unpatentability.
Accordingly, for the reasons discussed above, we determine that the
Petition does not show a reasonable likelihood that Petitioner would prevail
in showing that the challenged claims would have been obvious over Rosen
and Hartrick. See Apple Inc. v. SmartFlash LLC, Case CBM2015-00029,
slip op. at 16–18 (PTAB May 28, 2015) (Paper 11) (denying institution of an
asserted obviousness ground based on Petitioner’s failure to explain
adequately any differences between the asserted prior art and the claimed
invention); Liberty Mut. Ins. Co. v. Progressive Casualty Ins. Co., Case
CBM2012-00003, slip op. at 3 (PTAB Oct. 25, 2012) (Paper 7)
(representative) (“A petitioner who does not state the differences between a
challenged claim and the prior art, and relies instead on the Patent Owner
and the Board to determine those differences . . . risks having the
corresponding ground of obviousness not included for trial for failing to
adequately state a claim for relief.”).
2. Lack of Rationale to Combine, Improper Hindsight, and
Failure to Address Specific Claim Elements Clearly
The Petition is defective for other, independent reasons. “[R]ejections
on obviousness grounds cannot be sustained by mere conclusory statements;
instead, there must be some articulated reasoning with some rational
underpinning to support the legal conclusion of obviousness.” In re Kahn,
441 F.3d 977, 988 (Fed. Cir. 2006). The reason for this is that
[w]hile the Supreme Court made clear that a mechanical
application of the teaching-suggestion-motivation test,
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requiring an explicit teaching in the prior art, is inappropriate,
“[w]e must still be careful not to allow hindsight reconstruction
of references to reach the claimed invention without any
explanation as to how or why the references would be
combined to produce the claimed invention.”

Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1368 (Fed.
Cir. 2012) (quoting Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1374
n.3 (Fed. Cir. 2008)); see also KSR, 550 U.S. at 421 (“A factfinder should be
aware, of course, of the distortion caused by hindsight bias and must be
cautious of arguments reliant upon ex post reasoning.”); Graham, 383 U.S.
at 36 (warning against a “temptation to read into the prior art the teachings
of the invention in issue” and instructing courts to “‘guard against slipping
into use of hindsight’” (citation omitted)). Thus, “[c]are must be taken to
avoid hindsight reconstruction by using ‘the patent in suit as a guide through
the maze of prior art references, combining the right references in the right
way so as to achieve the result of the claims in suit.’” Grain Processing
Corp. v. Am.–Maize Prods. Co., 840 F.2d 902, 907 (Fed. Cir. 1988) (quoting
Orthopedic Equip. Co. v. United States, 702 F.2d 1005, 1012 (Fed. Cir.
1983)).
As discussed above, Petitioner reads the claims onto a hypothetical
Rosen-Hartrick implementation. See Pet. 38–60. Petitioner appears to
suggest making four changes to Rosen’s system to achieve this hypothetical
implementation. See id. at 38–44 (generally discussing “First,” “Second,”
“Third,” and “Finally” modifications). The Petition characterizes the third
modification as being “an inconsequential variation” of the disclosed
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process. Id. at 43. Specifically, the Petition states that “a person of skill
would have adjusted Rosen’s cryptographic protocols to accommodate any
particular implementation that was desired.” However, the Petition does not
set forth a sufficient reason why a person of skill would have “desired” (or
implemented) the modification proposed—i.e., configuring Rosen’s
“purchase protocol such that the MTA initiated the Establish Session
protocol by sending the CTA its digital certificate.” Id. (citing Ex. 1013
¶¶ E122, E123 (largely restating, word for word, the statements of the
brief)).
Moreover, although Petitioner frames the hypothetical Rosen-Hartrick
scheme as created by four primary modifications, these primary
modifications include additional modifications unsupported by sufficient
rationale. For example, in the first modification Petitioner proposes, i.e.,
storing security and royalty markup statements of Hartrick in the “Usage”
field of Rosen (Pet. 39), Petitioner asserts that a person of ordinary skill also
“would have considered it an obvious implementation choice to have the
security tags [of Hartrick] . . . grant affirmative rights—e.g., a ‘Display’ tag
(instead of ‘Do Not Copy’), or a ‘Print’ tag and ‘Display’ tag (instead of ‘Do
Not Distribute’)” (Pet. 40). Further, according to the Petition, a person of
ordinary skill would have recognized that Hartrick could be applied beyond
the context of softcopy books, and “[the person would simply] modify the
tags accordingly to reflect the actions associated with other types of
content.” Id. at 41. Beyond explaining that each of these many changes to
Hartrick (made in the process of modifying Rosen) would be a routine
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change, Petitioner does not provide an adequate rationale as to why a person
of ordinary skill would actually make the myriad group of changes.
Similarly deficient are the modifications contained in the following
section of the Petition—“Rosen in View of Hartrick Suggest a System Using
‘Usage Rights,’ ‘Trusted’ ‘Repositories’ and ‘Digital Documents.’” Pet. 44–
49. It is unclear whether the alterations described in this section constitute
additional changes to the changes described in the previous section (IV.
C)—“A Person of Ordinary Skill Would Have Found It Obvious to
Implement Rosen’s Scheme Using Hartrick’s Techniques”—or if they
simply provide more detail to the modifications of the previous section. See
Pet. 38. Ultimately, it is unclear what, precisely, are the modifications that
need to be made to Rosen and/or Hartrick to result in reading the claims onto
the hypothetical Rosen-Hartrick system.
For instance, the Petition appears to use Rosen’s transaction device
and Rosen’s trusted agent interchangeably as representing the claimed
“recipient computing device . . . determined to be trusted.” Id. at 47–49.
For example, the Petition explains that “a trusted agent . . . is a physically
secure module [of a transaction device]. . . . [t]hus, each transaction device
in a combined Rosen/Hartrick scheme would have physical integrity.” Id. at
48 (emphases added). Rosen, however, describes trusted agents and trusted
devices as distinct devices. Ex. 1020, 2:50, 7:65–8:3, Fig. 3 (describing the
components of transaction device 122, which includes host processor 124,
trusted agent 120, and money module 6 connected by bus 126). Petitioner,
thus, does not explain clearly what modifications Rosen’s devices require in
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order to suggest the claimed “recipient computing device”––as required to
reach the claims.
Further, the Petition fails to address, in more than a conclusory
fashion, how the hypothetical “recipient computing device has been
determined to be trusted” as the independent claims require––i.e., “has been
determined” to have, for example, behavioral integrity. See Pet. 18–19
(discussing the integrity requirements for trusted devices, including
behavioral integrity); supra Section II (Claim Construction). The Petition
alleges that
[t]he MTA authenticates the CTA by validating its digital
certificate (“determining if the . . . recipient computing device is
trusted to receive the digital content”). See § IV.A.5; Ex. 1020
at 37:50–38:12. If the CTA has a valid certificate and payment
credential, the merchant will transfer an electronic object
containing the content and a decryption ticket to the CTA
(“receiving the digital content”).
Pet. 52.
Assuming for the sake of argument that the Petition sufficiently shows
the obviousness of Rosen’s hypothetically modified MTA validating the
particular CTA digital certificate as alleged, the Petition fails to show, or
even discuss, how that particular certificate also validates, or “attests to the
fact,” that the CTA also would require “software to include a[nother] digital
certificate in order to be installed in the repository.” See Pet. 18–19
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(discussing the requirements for trusted devices and behavioral integrity);
supra Section II (Claim Construction).
2

Therefore, the Petition lacks adequate reasoning, with rational
underpinning, to show sufficiently that a person of ordinary skill would have
had a valid reason to combine the teachings of Rosen and Hartrick to arrive
at claims that read on the hypothetical Rosen-Hartrick system. The Petition
does not explain sufficiently why a person of ordinary skill would combine
Rosen and Hartrick to make the myriad proposed changes to Rosen’s system
simultaneously. Unsupported conclusory arguments are insufficient to
support an obviousness analysis. See Mintz v. Dietz & Watson, Inc., 679
F.3d 1372, 1377 (Fed. Cir. 2012) (“The mere recitation of the words
‘common sense’ without any support adds nothing to the obviousness
equation.”); In re Irani, 427 F.2d 806, 809 (CCPA 1970) (“Obviousness,
however, must not be judged by hindsight, and a ‘little modification’ can be
a most unobvious one.”).
The Petition fails to address clearly the differences between the
claimed subject matter and Rosen, and fails to present a clear rationale why
modifying Rosen’s system, viewed through claim elements missing from
Rosen, would have been obvious. This failure indicates that the Petition
relies on impermissible hindsight and improperly uses the challenged claims
of the ’956 patent as a guide in constructing a system loosely based on

2
Setting aside the failure to discuss “determining,” this particular analysis
also does not even allege that the “electronic object,” or software sent to the
CTA, includes a digital certificate.
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Rosen and Hartrick. See KSR, 550 U.S. at 421 (“A factfinder should be
aware, of course, of the distortion caused by hindsight bias and must be
cautious of arguments reliant upon ex post reasoning.”); Graham, 383 U.S.
at 36 (warning against a “temptation to read into the prior art the teachings
of the invention in issue” and instructing courts to “‘guard against slipping
into use of hindsight’” (citation omitted)); Plantronics v. Aliph, Inc., 724
F.3d 1343, 1355 (Fed. Cir. 2013) (“Where, as here, the necessary reasoning
is absent, we cannot simply assume that ‘an ordinary artisan would be
awakened to modify prior art in such a way as to lead to an obviousness
rejection.’ It is in such circumstances, moreover, that it is especially
important to guard against the dangers of hindsight bias.” (citation omitted));
W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1552 (Fed. Cir.
1983) (“The result is that the claims were used as a frame, and individual,
naked parts of separate prior art references were employed as a mosaic to
recreate a facsimile of the claimed invention. At no point did the district
court, nor does Garlock, explain why that mosaic would have been obvious
to one skilled in the art . . . .”).
Therefore, in addition to the procedural defects outlined in Section
II.C supra, the Petition is defective for the reasons discussed in the instant
section, Section II.D. In sum, the Petition does not show why one of
ordinary skill in the art—without improper hindsight—would have
combined Rosen and Hartrick to account for all the features of the
challenged claims. Accordingly, the Petition does not establish a reasonable
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likelihood that Petitioner would prevail in showing that any of the
challenged claims would have been obvious over Rosen and Hartrick.
IV. CONCLUSION
For all the reasons discussed above, we determine that the Petition
fails to show there is a reasonable likelihood that Petitioner would prevail
with respect to at least one of the claims challenged in the Petition. See 35
U.S.C. § 314(a); 37 C.F.R. § 42.8(b)(2).
V. ORDER
Accordingly, it is
ORDERED that pursuant to 35 U.S.C. § 314 (a), the Petition is
denied.

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PETITIONER:

Jeffrey P. Kushan
Michael R. Franzinger
SIDLEY AUSTIN LLP
jkushan@sidley.com
mfranzinger@sidley.com
iprnotices@sidley.com

PATENT OWNER:

Nicholas T. Peters
Timothy P. Maloney
FITCH EVEN TABIN & FLANNERY LLP
ntpete@fitcheven.com
tpmalo@fitcheven.com

Robert A. Cote
MCKOOL SMITH, P.C.
rcote@mckoolsmith.com