B# On Demand LLC

Patent Trials and Appeals Board

Nov 10, 2021

IPR2020-00995 (P.T.A.B. Nov. 10, 2021)

Trials@uspto.gov Paper 40
571-272-7822 Entered: November 10, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE
____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________
UNIFIED PATENTS, LLC,

Petitioner,
v.
B# ON DEMAND, LLC,
Patent Owner.
____________

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____________

Before JONI Y. CHANG, GEORGIANNA W. BRADEN, and
ARTHUR M. PESLAK, Administrative Patent Judges.

PESLAK, Administrative Patent Judge

JUDGMENT
Final Written Decision
Determining All Challenged Claims Unpatentable
35 U.S.C. § 318(a)

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I. INTRODUCTION
Petitioner, Unified Patents, LLC, filed a Petition (Paper 1, “Pet.”)
requesting an inter partes review of claims 1–10, 13–22, and 25–34 (the
“challenged claims”) of U.S. Patent No. 9,553,880 B2 (Ex. 1001, “the ’880
patent”). Petitioner submitted the Declaration of Andrew Wolfe, Ph.D. in
support of the Petition. Ex. 1005. Patent Owner, B# On Demand, LLC,
timely filed a Preliminary Response (Paper 6, “Prelim. Resp.”). Patent
Owner submitted the Declaration of Petr Peterka in support of the
Preliminary Response. Ex. 2024. Taking into account the evidence and
arguments presented in Patent Owner’s Preliminary Response, we
determined there was a reasonable likelihood Petitioner would prevail in its
contention that at least one of the challenged claims of the ’880 patent is
unpatentable under 35 U.S.C. § 103(a). On December 8, 2020, we instituted
this inter partes review as to the challenged claims and all grounds presented
in the Petition. Paper 20. (“Dec.”).
During the course of trial, Patent Owner timely filed a Patent Owner
Response. Paper 23 (“PO Resp.”). Patent Owner also filed a Second
Declaration of Petr Peterka in support of it Response. Ex. 2047. Petitioner
filed a Reply to Patent Owner’s Response. Paper 28 (“Pet. Reply”).
Petitioner filed a Second Declaration of Dr. Wolfe. Ex. 1065. Patent Owner
filed a Sur-reply. Paper 30 (“Sur-reply”). An oral hearing was held on
September 10, 2021, and a transcript of the hearing has been entered into the
record. Paper 38 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6. This is a Final Written
Decision under 35 U.S.C. § 318(a) as to the patentability of the challenged
claims of the ’880 patent. For the reasons discussed below, we determine
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Petitioner establishes by a preponderance of the evidence that each of the
challenged claims is unpatenatable.
A. Related Matters
The parties state that the ’880 patent is asserted in B# On Demand
LLC v. Spotify Technology SA et al., Case No. 1:19-cv-02077 (D. Del.
Nov. 1, 2019) (“the Delaware Litigation”). Pet. 1; Paper 4, 1.1
B. Real Parties in Interest
Petitioner identifies itself as the only real party in interest. Pet. 1.
Patent Owner identifies itself as the only real party in interest. Paper 4, 1.
C. The ’880 Patent (Ex. 1001)
The ’880 patent issued on January 24, 2017, and is entitled
“Subscription Media on Demand VII.” Ex. 1001, codes (45), (54).
The ’880 patent relates generally to “electronic media players, and more
particularly to media that is downloadable over a communication network.”
Ex. 1001, 1:29–31. The ’880 patent describes “a rechargeable media
distribution and play system that . . . includes a service facility having an
electronically accessible catalog of electronic files, and an interface to a
communications network.” Id. at 2:13–17. According to the ’880 patent,
the system transmits a catalog to a requesting user, sets up customer
accounts, processes customer payments for establishing file access
authorizations, and enables transmission of user-selected files to customers.
Id. at 2:18–22. The system provides a player program to each customer for
metering access to received data files based on the authorization, such that
selected files may be transmitted to the customer only when the

1 Patent Owner indicates that it “voluntarily dismissed” this case without
prejudice. PO Resp. 4 n.2.
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authorization remains in effect. Id. at 2:22–27. Transmissions of data files
through the system may be in encrypted form and the player program
decrypts the received data files while authorization remains in effect. Id.
at 2:48–51. Authorization is provided for a predetermined length of time,
after which operation of the player program is inhibited unless further
payments are received from the customer to renew or extend the
authorization. Id. at 2:65–67, 3:23–26.
Figure 1 of the ’880 patent is reproduced below.

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Figure 1 is a block diagram depicting the components of “an electronic
media distribution system,” according to an embodiment of the ’880 patent.
Ex. 1001, 3:45–46. As shown in Figure 1, distribution system 10 includes a
service facility 11, implemented as a server computer 12, and user
facilities 15, each connected to a network 14. Id. at 4:2–7. Users
communicate with the distribution system 10 via a network web page. Id.
at 5:42–44. One of the user facilities 15 designated as customer facility 15C
is implemented on customer computer 16. Id. at 4:7–8. Memory 24 of
server computer 12 includes a web server program 28 and a library server
program 30 with access to the mass data storage 32. Id. at 4:23–26. Mass
data storage 32 contains a library of data files loaded by an accession
program 34, which generates a catalog 35 of data files, that may be
periodically updated and saved in mass data storage 32. Id. at 4:26–30.
Web browser 38 in customer computer 16 accesses data files available at the
service facility 11 and saves them to a mass storage device 40. Id. at 4:39–
43. Memory 24 also receives a media player program 42 for conditionally
accessing received data files. Id. at 4:43–47.
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Figure 3 of the ’880 patent is reproduced below.

Figure 3 of the ’880 patent is a computer flow chart depicting a distribution
process 50 in which accession program 34 maintains a library of recordings
and a user of the customer computer 16 interacts with library server
program 30 of server computer 12 over network 14. Ex. 1001, 3:47–51,
5:10–14.
As shown in Figure 3, after data has been received (step 52) and
encrypted (step 53), and the catalog 35 has been updated (step 54), in
step 56, the network web page is activated by library server program 30. Id.
at 5:17–22, 5:25–29, 5:41–45. A user who has accessed the web page
receives a listing of the catalog 35 (step 58), and in response, the catalog is
provided (step 59). Id. at 5:50–54. A user then may place a new order
(step 60) or open a new account (step 62). Id. at 6:4–7. When opening a
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new account, the user provides identification data, payment authorization,
and a desired authorization level that can define a number of plays, a period
of time, and premium options (such as whether play of “new releases” is
authorized). Id. at 6:13–20. Once the user’s account is established, a
customer flag for that user is set (step 65) and control is passed to the catalog
request step 58. Id. at 6:22–24. When a customer places a new order, the
server checks whether the customer flag is set (step 66). Id. at 6:36–37.
Once the flag is set, the user selects items from the catalog 35 for
downloading to the mass storage device of the customer computer 16
(step 70). Id. at 6:51–60. Files selected by the user may be encrypted
(step 76) before being transmitted to the customer computer 16 (step 78). Id.
at 7:26–35.
According to the ’880 patent, the customer receives appropriate codes
or software (the player program 42) for enabling playback of the works.
Ex. 1001, 7:35–37. The ’880 patent also describes that new codes or a new
player program 42 may be downloaded to the customer computer 16 when a
user’s authorization has been recharged. Id. at 8:50–53. In addition, once
the user selects a file to play, a meter may be set by transferring “the number
of minutes of play authorization currently available to the user” to a clock
register maintained by the player program 42. Id. at 9:49–57. The selected
file may then be accessed and played with decryption, and a timer may be
activated. Id. at 9:57–59. In an alternative embodiment, instead of a
predetermined play time, a predetermined number of plays may be provided
and metered. Id. at 10:35–54.
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D. Challenged Claims
Claims 1, 13, and 25 are independent. Ex. 1001, 14:32–15:15,
15:54–14:37, 17:9–18:6. Claim 1 is illustrative and reproduced below:
1. A system for on-demand distribution of works over a
communications network, comprising:
a memory;
a processor in data communication with the memory;
a network interface in data communication with the
processor;
at least one catalog stored in the memory;
wherein the at least one catalog is configured to reference at
least a first work and a second work, wherein the first
work is different from the second work, wherein each of
the first work and the second work is selectable by a user
from the at least one catalog, wherein a first data file
comprises at least a portion of the first work, wherein a
second data file comprises at least a portion of the second
work, wherein the first data file is different from the
second data file, wherein each of the first data file and
the second data file is capable of transmission to a user
device over the communications network, wherein each
of the first data file and the second data file is capable of
play on a software player associated with the user device,
wherein each of the first data file and the second data file
is encrypted prior to play, wherein at least a portion of
the first data file is configured to reside in main memory
on the user device at the time of play of the first data file,
wherein at least a portion of the second data file is
configured to reside in main memory on the user device
at the time of play of the second data file, and wherein
either:
the first data file and the second data file each comprises
at least one musical recording, or
the first data file and the second data file each comprises
at least one moving image; and
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wherein the processor is configured to
require a first authorization, which first authorization is
configured to enable at least one of transmission or
play of at least a portion of each of the first data file
and the second data file, wherein the first
authorization is configured to expire with respect to
both the first data file and the second data file if at
least one predetermined act is not performed by or on
behalf of the user within a predetermined period of
time, wherein the at least one predetermined act and
the predetermined period of time are the same for both
the first data file and the second data file, wherein the
first authorization is usable across at least two logon
sessions within the predetermined period of time, and
wherein the at least one of transmission or play of at
least a portion of each of the first data file and the
second data file is configured to be at least one of
limited or inhibited after the expiration of the first
authorization.
Id. at 14:32–15:15.
E. Asserted Challenges to Patentability
Petitioner challenges claims 1–10, 13–22, and 25–34 of the ’880
patent as set forth below (Pet. 12–64):

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Claims Challenged 35 U.S.C. § Reference
1–10, 13–22, and 25–34 103(a)2 Schmeidler3 alone or in
combination with
Jaisimha,4 and Wiser5
II. ANALYSIS
A. Overview
Petitioner bears the burden of establishing the unpatentability of any
claim by a preponderance of the evidence. 35 U.S.C. § 316(e); 37 C.F.R. §
42.1(d). This burden of persuasion never shifts to the patent owner.
Dynamic Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378
(Fed. Cir. 2015).
A claim is unpatentable under § 103(a) if the differences between the
claimed subject matter 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). The question of
obviousness is resolved on the basis of underlying factual determinations,
including (1) the scope and content of the prior art; (2) any differences
between the claimed subject matter and the prior art; (3) the level of skill in

2 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103. Because the ’880
patent claims priority to applications filed before the effective date of the
relevant amendment, the pre-AIA version of § 103 applies.
3 U.S. Patent No. 6,763,370 B1, issued July 13, 2004 (Ex. 1002),
(“Schmeidler”).
4 U.S. Patent No. 6,487,663 B1, issued Nov. 26, 2002 (Ex. 1003),
(“Jaisimha”).
5 U.S. Patent No. 6,385,596 B1, issued May 7, 2002 (Ex. 1004), (“Wiser”).
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the art; and (4) when in evidence, objective indicia of non-obviousness
(i.e., secondary considerations).6 Graham v. John Deere Co., 383 U.S. 1,
17–18 (1966).
We analyze the asserted ground with these principles in mind.
B. Level of Ordinary Skill in the Art
Petitioner contends that a person of ordinary skill in the art would
have “at least a Bachelor’s Degree in computer science, electrical
engineering, or a related subject, and two years of experience working with
electronic devices, computer networks, and related technologies.” Pet. 8
(citing Ex. 1005 ¶ 48). Patent Owner does not address the level of skill in
the art in the Patent Owner Response. See generally PO Resp. We agree
with Petitioner’s proposed level of ordinary skill in the art because it
comports with the level of skill reflected in the ’880 patent and the prior art
of record. See, e.g., Ex. 1001, 1:28–2:8.
C. Claim Construction
We apply the same claim construction standard used by Article III
federal courts and the International Trade Commission, both of which follow
Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), and its
progeny. 37 C.F.R. § 42.100(b) (2019). Accordingly, we construe each
challenged claim of the ’880 patent to generally be “the ordinary and
customary meaning of such claim as understood by one of ordinary skill in
the art and the prosecution history pertaining to the patent.” Id.
“Petitioner submits that all terms of the Challenged Claims should be
interpreted according to their plain and ordinary meaning.” Pet. 11. Patent

6 Neither party has offered evidence concerning objective indicia of non-
obviousness.
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Owner does not address the question of claim construction in the Patent
Owner Response. See generally PO Resp. Upon review of the parties’
arguments and based on the record before us, we determine that no claim
terms require express construction for purposes of this Decision. See Nidec
Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017
(Fed. Cir. 2017) (noting that “we need only construe terms ‘that are in
controversy, and only to the extent necessary to resolve the controversy’”)
(citing Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed.
Cir. 1999)). We do discuss the plain and ordinary meaning of the claim term
“associated with” in connection with element g of claim 1 in the context of
analyzing the asserted prior art below.
D. Alleged Obviousness over Schmeidler alone, or alternatively, in view
of Jaisimha and Wiser
Petitioner contends that claims 1–10, 13–22, and 25–34 would have
been obvious over Schmeidler alone, or, alternatively, in combination with
Jaisimha and Wiser. Pet. 12–64. In support thereof, Petitioner identifies the
disclosures in Schmeidler, Jaisimha, and Wiser alleged to describe the
subject matter in the challenged claims. Id. Additionally, Petitioner offers
declaration testimony from Dr. Wolfe (“Wolfe Declaration”) in support of
the Petition. Ex. 1005 ¶¶ 72–166.
In the Patent Owner Response, Patent Owner disputes only
Petitioner’s proposed motivation to combine the teachings of Schmeidler
and Jaisimha. PO Resp. 15–24. Petitioner relies on Jaisimha only as an
alternative basis to establish element g of claim 1 which recites “wherein
each of the first data file and the second data file is capable of play on a
software player associated with the user device.” As discussed below, we
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find Schmeidler alone discloses or renders obvious all of the limitations of
the challenged claims, including this limitation recited in claim 1. Thus, like
Realtime Data where “the Board was not required to make any finding
regarding a motivation to combine given its reliance on [a single reference]
alone,” we need not and do not reach Petitioner’s alternate basis or Patent
Owner’s arguments as to the proposed motivation to combine Schmeidler
and Jaisimha. See Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1372−73
(Fed. Cir. 2019) (affirming the Board’s obviousness finding based on a
single reference where the petitioner’s primary argument was that all of the
elements were disclosed in a single reference, and the petitioner also argued,
in the alternative, that some of the elements were disclosed by a second
reference); see also Polygroup Limited MCO v. Willis Electric Co., 759 F.
App’x 934, 934 n.3 (Fed. Cir. 2019) (Recognizing, as “in Realtime Data,
that when a petition sets forth a ground with multiple references, but the
petitioner’s primary arguments rely on a single reference, the Board should
consider those arguments irrespective of a motivation to combine
references.”).
We begin our analysis with brief overviews of Schmeidler, Jaisimha,
and Wiser. We then address the parties’ respective contentions with respect
to the challenged claims.7
1. Overview of Schmeidler — Ex. 1002
Schmeidler is a United States Patent issued on July 13, 2004.
Ex. 1002, code (45). Schmeidler is titled “Method and Apparatus for

7 Petitioner argues most of the limitations of claim 1, 13, and 25 together and
separately argues additional limitations in claims 13 and 25 that are not
present in claim 1. Pet. 12–57.
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Content Protection in a Secure Content Delivery System.” Id. at code (54).
Schmeidler describes a secure content delivery platform (SCDP) that
delivers high-bandwidth executable content on-demand over broadband
access networks. Id. at 2:29–32. Using the SCDP, broadband subscribers
may access titles (such as movie or audio clips) across the broadband
networks. Id. at 2:32–34, 28:65–66.
Figure 2A of Schmeidler is reproduced below.

Figure 2A of Schmeidler is a block diagram depicting the main components
of SCDP system 200, as well as other elements in a broadband network
environment. Ex. 1002, 7:53–58. As shown in Figure 2A, SCDP
system 200 includes Conditional Access Server (CAS) 200, CAS
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database 212, Random Access File Transfer Server (RAFT) 206, and RAFT
database 216. Id. at 7:62–65. Each of these elements may be connected
over a network (for example, Internet 240) to SCDP client software 216
running on a user’s personal computer (PC). Id. at 8:3–16. The SCDP
client 216 includes Launcher 220, Arepa File System Driver VxD (ARFSD
VxD) 218, and RAFT Client VxD 222. Id. at 10:19–21.
A title for downloading by the user is formatted into an electronic
package containing the title’s files in a compressed and encrypted form
called a “briq.” Ex. 1002, 2:57–60. The briq is a portable, self-contained
file system containing all the files necessary to run a particular title. Id.
at 2:60–62. Briqs are stored in RAFT server 206 and are accessible across
the network 240. Id. at 2:62–64. SCDP client 216 treats the briq as a local
file system on the user’s PC. Id. at 2:64–65. When running a title, the PC’s
operating system makes read requests to this local file system, and SCDP
client 216 services these requests by retrieving requested blocks of briq data
from the RAFT server. Id. at 2:65–3:3. After retrieving the requested
blocks of data, the SCDP client 216 decompresses and decrypts the briq
data, and passes it onto the operating system on the user’s PC. Id. at 3:3–6.
SCDP client 216 “creates an installation abstraction, maintaining the illusion
for the operating system that the title currently executing is installed on the
host PC.” Id. at 3:8–10.
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Figure 2B of Schmeidler is reproduced below.

Figure 2B of Schmeidler is a block diagram depicting an example of how
components may interact within the SCDP system. Ex. 1002, 6:6–9. In
particular, a user equipped with SCDP client 216 running on web
browser 224 may select a title to run from the virtual storefront 215
(step 401). Id. at 2:35–37, 9:5–8. Upon selection, the virtual storefront
directs the user’s browser to HTTP front-end 202A of the eCommerce server
(step 402). Id. at 9:12–14, 29:5–9. The user then negotiates the purchase of
the title, which may involve user registration, providing billing information,
and selecting the type of purchase (step 403). Id. at 2:37–42, 9:13–19.
Purchase types include a subscription for unlimited use of a title or set of
titles for a specified period of time. Id. at 26:40–42.
Once the purchase has been negotiated, eCommerce server 202
generates a launch string that contains information identifying and
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authorizing the purchase, including a Universal Resource Name (URN) that
uniquely identifies the desired content (step 404A). Ex. 1002, 9:20–24. The
launch string is digitally signed by CAS 210 and provided to eCommerce
Server 202 for delivery to SCDP client 216 (step 404B). Id. at 9:25–28.
Once received at SCDP client 216, launcher 220 requests CAS 210 to
convert the specified URN to a URL that identifies the location of the
corresponding briq data for the title (steps 405, 406A). Id. at 9:33–39. Once
launcher 220 identifies the briq data’s location, it sends a purchase request to
CAS 210 including the launch string (step 406B). Id. at 9:41–45. The CAS
verifies the launch string and returns a RAFT authorization token and
activator to launcher 220 (step 407). Id. at 9:46–49; see also id. at 2:47–50.
An authorization token authorizes the user’s PC to run the briq data (i.e., the
selected title) from the RAFT server 206 over the network for a length of
time spelled out in the negotiated payment type. Id. at 2:50–52, 3:47–51.
Launcher 220 then launches the title by passing the activator to
ARFSD VxD 218 (step 208). Ex. 1002, 9:51–53. ARFSD VxD 218 runs
the activator, which passes the authorization token to RAFT VxD 222. Id.
at 9:53–54. RAFT VxD 222 opens the URL, reads the header, and sends the
authorization token to RAFT server 206 (steps 409–10). Id. at 9:55–57.
RAFT VxD 222 then starts reading content from RAFT server 206 and
passes the content back to ARFSD VxD 218 (step 411). Id. at 9:58–60.
ARFSD VxD 218 uses the activator to decrypt and decompress the
encrypted briq data (step 412), and the operating system then executes the
title (step 413). Id. at 9:65–67; see also id. at 2:52–55.
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2. Overview of Jaisimha — Ex. 1003
Jaisimha is a United States Patent issued on November 26, 2002.
Ex. 1003, code (45). Jaisimha is titled “System and Method For Regulating
The Transmission of Media Data.” Id. at code (54). Jaisimha identifies as
prior art an existing media distribution system for accessing media data from
storage and transmitting the media data to media receiving devices via a
network. Id. at 4:37–42. Figure 1 of Jaisimha is reproduced below.

Figure 1 is a block diagram depicting an existing media distribution system
including media server 102, media storage 104, network 108, non-portable
media player 110, and portable media player 122. Id. at 4:37–43, 4:66–5:20.
Jaisimha describes that media server 102 accesses media storage 104 to
obtain media object 106 (such as a video clip, audio clip, or graphical
image). Id. at 4:38–42. Media server 201 then transmits the media data to a
media receiving device over network 108.
The media receiving device may comprise, for example, non-portable
media player 100 that receives media object 106 using a streaming
transmission protocol. Id. at 4:66–5:1. While the media data is being
transmitted, the non-portable media player receives and plays the media
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data—for example, it “decodes and renders audio and video information to
produce video image frames as pixels on a computer screen and to produce
audible sound of an accompanying soundtrack from a speaker connected to
the computer.” Id. at 4:43–51, 5:3–6. Although the media data may be
buffered temporarily by the media receiving device, it is never stored
permanently on the computer (such as in non-volatile memory), and,
generally, the media data is discarded immediately after it has been
interpreted. Id. at 4:51–56, 5:6–10. Jaisimha describes further that a
computer may execute media player software as a plug-in or helper
application of a web browser, such that the computer operates as a non-
portable media player. Id. at 5:42–47.
3. Overview of Wiser — Ex. 1004
Wiser is a United States Patent issued on May 7, 2002. Ex. 1004,
code (45). Wiser is titled “Secure Online Music Distribution System.” Id. at
code (54). Wiser describes a system for the secure distribution of music and
related media over a public telecommunications network, such as the
internet. Id. at 5:43–46. Wiser describes its computer-implemented online
music distribution system as a client-server system including a content
manager, a delivery server, a media data file system and media information
database, and an HTTP server for communicating with a client system that
has a Web browser and a media player. Id. at 3:11–19.
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4. Claim 1
Patent Owner does not directly address Petitioner’s proposed findings
based on Schmeidler. See generally PO Resp.8 Nonetheless, Petitioner
bears the burden to prove by a preponderance of the evidence that
Schmeidler teaches or suggests each claim limitation. See Dynamic
Drinkware, 800 F.3d at 1378. Therefore, we analyze Petitioner’s
contentions and evidence with this standard in mind.
a. Preamble: A system for on-demand distribution of works over a
communications network9
Petitioner contends, to the extent the preamble is limiting, Schmeidler
discloses or renders obvious the subject matter of the preamble. Pet. 18.
Petitioner contends that Schmeidler “discloses a system and method ‘for
secure delivery of on-demand content over . . . networks.” Id. (citing
Ex. 1002, Abstr., 8:65–10:7, Figs. 4A, 4B). Petitioner further contends that
“[w]hen a user purchases access to a selected title, the user’s client computer
obtains an authorization token and keying material from a . . . server” and
the “token authorizes the client to retrieve the title.” Id. (citing Ex. 1002,
2:47–3:3).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.

8 Any arguments not presented in the Patent Owner Response are deemed
waived. Paper 21, 8; In re NuVasive, Inc., 842 F.3d 1376, 1379–82 (Fed.
Cir. 2016) (holding that a patent owner waived an argument addressed in a
Preliminary Response by not raising the same argument in the Patent Owner
Response).
9 We use claim annotations such as “a.” for ease of reference. The
annotations do not affect our analysis.
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Based on the evidence discussed above, Schmeidler discloses the
subject matter of the preamble regardless of whether the preamble is
limiting. See Ex. 1002, Abstr., 2:47–3:3, 8:65–10:7, Figs. 4A, 4B.
b. a memory, a processor in data communication with the memory, and
a network interface in data communication with the processor
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 19. Petitioner specifically contends Schmeidler
discloses a system comprising servers designated as CAS, RAFT,
eCommerce, and virtual storefront servers. Id. (citing Ex. 1002, 7:61–8:3,
28:53–55, Fig. 2A). Petitioner further contends that Schmeidler’s servers
each include “a processor and a memory coupled to the processor and can
operate on a computer architecture similar to that illustrated in Figure 1 of”
Schmeidler. Id. (citing Ex. 1002, 4:34–44, 17:36–47, 23:18–28, 23:59–63,
28:65–29:1, 27:7–13, 28:51–60, 32:56–57, Figs. 1, 2A). Petitioner also
contends that “[a] network interface allows a server to connect to a network”
and that the “[p]rocessors and memories of servers are also connected to
each other over the network.” Id. (citing Ex. 1002, 7:26–30, Figs. 1, 2A).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 4:34–44, 7:26–30, 7:61–8:3,
17:36–47, 23:18–28, 23:59–63, 27:7–13, 28:51–29:1, 32:56–57, Figs. 1, 2A.
c. at least one catalog stored in the memory
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 20. Petitioner specifically contends that Schmeidler’s
“virtual storefront stores a catalog of available titles . . . which a user can
browse with a web browser.” Id. at 20–21 (citing Ex. 1002, 2:35–46, 13:50–
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14:2, 27:49–54, 28:52–29:27, Fig. 2A). Petitioner further contends that a
skilled artisan “would have understood that a server, such as the virtual
storefront server of Schmeidler, would typically store data in mass storage
memory for long-term storage, and then also in RAM memory when that
data is being used by a processor of the server.” Id. (citing Ex. 1005 ¶¶ 88–
90).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:35–46, 13:50–14:2, 27:49–
54, 28:52:29–27, Fig. 2A. Additionally, we credit the testimony of Dr.
Wolfe and determine that a person of ordinary skill in the art at the time of
the invention would have understood that Schmeidler’s virtual storefront
server would typically store data in mass storage memory for long-term
storage, but also would store data in RAM memory when that data is being
used by a server processor. See Ex. 1005 ¶¶ 88–90.
d. wherein the at least one catalog is configured to reference at least a
first work and a second work, wherein the first work is different from
the second work, wherein each of the first work and the second work
is selectable by a user from the at least one catalog
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 23. Petitioner specifically contends that Schmeidler
discloses that a user can select a title from a catalog with a large number of
titles. Id. (citing Ex. 1002, 2:35–37, 9:5–12, 14:7–10, 28:60–66, 29:1–5;
Ex. 1005 ¶ 97). Petitioner further contends that each title in the catalog “is
associated with a URN” and “[a]fter a user selects a title and negotiates its
purchase, a launch string is generated containing information identifying and
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authorizing the purchase, including the URN that uniquely identifies the
content.” Id. (citing Ex. 1002, 9:14–24, 14:19–27, 28:66–29:9; Ex. 1005
¶ 98).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:35–37, 9:5–24, 14:7–27,
28:60–66, 29:1–9.
e. wherein a first data file comprises at least a portion of the first work,
wherein a second data file comprises at least a portion of the second
work, wherein the first data file is different from the second data file
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 24. Petitioner further contends that Schmeidler’s titles
are “formatted into an electronic package containing the title’s files in a
compressed and encrypted form, referred to as a ‘briq.’” Id. (citing
Ex. 1002, 2:57–62, 15:61–64, 29:44–46). Petitioner specifically contends
that the briqs “can also include one or more titles, and each title can include
one or more files.” Id. (citing Ex. 1002, 15:54–56, 29:33–50; Ex. 1005
¶¶ 101–102). Petitioner also contends that Schmeidler discloses or renders
obvious this limitation in two ways. Id. First, Petitioner contends that
where a first title is stored as a first briq with a first file and a second
file is stored as a second briq with a second file, the first file is “a first
data file [that] comprises at least a portion of the first work” and the
second file is “a second data file [that] comprises at least a portion of
the second work.”
Id. (citing Ex. 1005 ¶ 104). Second, Petitioner contends that
where a first title is stored in a first briq with a first file, and a second
title is stored in the first briq with a second file, the first file is “a first
data file [that] comprises at least a portion of the first work” and the
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second file is “a second data file [that] comprises at least a portion of
the second work.”
Id. at 25 (citing Ex. 1005 ¶ 105).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation under both of Petitioner’s cited disclosures.
See Ex. 1002, 2:57–62, 15:54–64, 29:33–50.
f. wherein each of the first data file and the second data file is capable
of transmission to a user device over the communications network
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 25. Petitioner contends that in Schmeidler, “when a
user wishes to run a title, the client computer requests datablocks of the briq
storing that title from a RAFT server and then decompresses and decrypts
the datablocks as they are received.” Id. (citing Ex. 1002, 2:55–3:6, 9:60–
64, 13:26–32, 14:62–15:8, 16:8–21). The RAFT Server 206 and SCDP
client 216 are connected by an Internet service provider 230. See Ex. 1002,
7:66–8:9.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:55–3:6, 7:66–8:9, 9:60–64,
13:26–32, 14:62–15:8, 16:8–21.
g. wherein each of the first data file and the second data file is capable
of play on a software player associated with the user device
Petitioner contends that Schmeidler alone or, alternately, Schmeidler
in combination with Jaisimha, discloses or renders obvious this claim
limitation. Pet. 26–28.
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Petitioner contends “that components of [Schmeidler’s] SCDP client
software application are involved in execution of a title on the client
computer.” Id. at 26 (Ex. 1002, Abstract, 2:47–57, 2:67–3:6, 10:15–30).
Petitioner further contends that “control module 310 of the ARFSD VxD of
the SCDP client software ‘includes the necessary program logic or code to
carry out the algorithm necessary to . . . execute a title.’” Id. (citing
Ex. 1002, 2:65–3:6, 10:19–24, 11:31–43, 13:8-12, Figs. 2A, 3A, 3C).
Petitioner further contends “that SCDP client software performs the process
steps of Figure 6, which includes decrypting the datablocks from the briq
and executing them as an operating system file system.” Id. (citing
Ex. 1002, 16:1–57, Fig. 6; Ex. 1005 ¶ 110). Petitioner further contends that
the operating system of Schmeidler’s “client computer is involved in
execution of the title.” Id. at 26–27 (citing Ex. 1002, 3:7–11, 9:65–67,
11:11–23, 15:16–19, 15:35–44, 16:4–57). Petitioner further contends that a
skilled artisan would have understood that, in executing files associated with
a media title (e.g., movie, audio clip, video game), the SCDP client
application and/or operating system of Schmeidler ‘plays’ the files.” Id.
(citing Ex. 1002, 3:16–20, 26:44–48, 28:34–42, 28:65–66). Based on this
evidence, we find that, in Schmeidler, data files are capable of play on the
user device.10 The next question is whether the files play “on a software
player associated with the user device” as required by this limitation.

10 Petitioner contends that this claim limitation only requires that the first
and second data files be capable of play on a software player but does not
“affirmatively require a software player.” Pet. Reply 11. Petitioner did not
make this argument in the Petition. See Pet. 26–27 (arguing that
“Schmeidler discloses, or at least renders obvious, a ‘software player’ on the
customer computer”). This contention appears to be a new argument not
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In our Decision on Institution, we provided our preliminary views on
the plain and ordinary meaning of the claim terms “player program” and
“associated with” in the context of analyzing Patent Owner’s arguments in
the Preliminary Response concerning why, according to Patent Owner,
Schmeidler did not disclose this claim limitation. Paper 20, 26–27. Patent
Owner did not reiterate those arguments from the Preliminary Response in
the Patent Owner Response. See generally PO Resp. Consequently, those
arguments from the Preliminary Response regarding the disclosure of
Schmeidler have been waived. See Paper 21, 8 (Scheduling Order) (stating
that “Patent Owner is cautioned that any arguments not raised in the
response may be deemed waived”); In re NuVasive, Inc., 842 F.3d at 1379–
82. see also 37 C.F.R. § 42.5(a)(3) (stating that “[a]rguments must not be
incorporated by reference from one document into another document”).
In order to provide a complete analysis of Petitioner’s contentions, we
again look to the disclosure in the ’880 patent for the meaning of “player
program” and “associated with.” The ’880 patent discloses that:
[T]he term “player program 42” is inclusive of stand-alone file access
software, software patches including portions of the exemplary player
program 42 as described below in connection with FIG. 4 and variant
counterparts thereof as further described in connection with FIGS. 5
and 6 to be used in conjunction with a conventional media player or
other file access software to be run by the customer computer 16C, or
otherwise operated by the customer. The term is further inclusive of
any hardware and/or software device or appliance that the customer
may use to access encrypted files having been delivered as facilitated
by operation of the system 10 of the present invention.

interposed in response to a Patent Owner argument and thus beyond the
proper scope of a reply. Consol. Trial Practice Guide (“Consol. TPG”), 73–
74 (Nov. 2019).
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Ex. 1001, 7:50–62. This description of a player program is broad and the
last quoted sentence indicates that the term is meant to encompass more than
the player programs described in the embodiments shown in Figures 4–6 of
the ’880 patent and includes “any hardware and/or software device that the
customer may use to access encrypted files.” This last quoted sentence
suggests that the meaning of “associated with” is that the player program
provides access to encrypted files. See Tr. 8:20–9:20 (Petitioner arguing
“associated with” encompasses “software that is accessible on the user
device.”); see contra id. at 26:3–18 (Patent Owner arguing based on
Preliminary Response that “associated with” should be construed as “a
player program installed on a user device.”)
Schmeidler’s SCDP client 216 comprises launcher 220, ARFSD
VxD 218, and RAFT VxD 222. Ex, 1002, 10:19–20, Fig. 2A. Schmeidler’s
SCDP client 216 runs on the user’s personal computer. Id. at 2:53–56; 7:62–
65, 10:16–19, Figs. 2B (step 413). In particular, “SCDP client 216 may be
implemented as an application executable on operating system 219.” Id. at
10:22–23, Fig. 2A, 2B (block 226). Schmeidler’s “briqs” contain
compressed and encrypted files. Id. at 2:57–60. Schmeidler’s SCDP client
216 retrieves the briqs from RAFT server 206 and then AFRSD VxD 304
decompresses and decrypts the data. Id. at 2:65–3:6; 11:37–38, Figs. 3A,
3C. Schmeidler discloses that “a graphic user interface (GUI) is presented to
a user through user interface 306.” Id. at 11:11–12, Fig. 3B. “ARFSD VxD
304 is a virtual device driver [that] enables the operating system to read the
briq data as a local file system.” Id. at 11:34–36. Based on this evidence,
we find that Schmeidler discloses a software player associated with the user
device because SCDP client 216 is a “hardware and/or software device or
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appliance that the customer may use to access encrypted files.” Ex. 1001,
7:58–68.
In the Patent Owner Response, Patent Owner does not dispute
Petitioner’s contention that Schmeidler alone discloses this claim limitation.
See PO Resp. 15–25. In the Sur-reply, Patent Owner contends that “[t]he
Second Declaration of Petr Peterka makes clear that Schmeidler alone does
not disclose ‘a software player associated with the user device’ because
Schmeidler has no need for ‘a software player associated with the user
device.’” Sur-reply, 4 n.1 (citing Ex. 2047 ¶¶ 15–20). For the following
reasons, this contention is unavailing.
First, it should have been raised in the Patent Owner Response and is
untimely. Second, it appears to be based on the waived arguments raised in
the Preliminary Response which Patent Owner attempted to resurrect during
the oral hearing (Tr. 26:10–18) that this claim limitation “refer[s] to a player
program on the user device.” Dec. 24 (citing Prelim. Resp. 39–44). We
noted in our Decision on Institution that this contention was “premised on
two implicit claim constructions”, i.e., the recited player program is limited
to known media players and “associated with” should be limited to a player
program installed on the user device. Id. at 25. However, even if this
contention had not been waived, the description of “player program” in
the ’880 patent is broad and neither the Patent Owner Response, the Sur-
reply, nor the Second Declaration of Mr. Peterka explains why Schmeidler
does not disclose a player program associated with the user device as
described in the ’880 patent, i.e., “any hardware and/or software device or
appliance that the customer may use to access encrypted files having been
delivered as facilitated by operation of the system.” Furthermore, even if we
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were to adopt Patent Owner’s unsupported argument that the player program
must be installed on the user device, Schmeidler discloses the limitation
under this narrow construction because Schmeidler’s SCDP client 216 is
installed on the user device.
For all of these reasons, we find Schmeidler discloses this claim
limitation.
The Petition alternately contends that Schmeidler in combination with
Jaisimha discloses this limitation. Pet. 27−31. Because we determine that
Schmeidler alone discloses this limitation, we do not reach Petitioner’s
alternate contention. See SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1359
(2018) (holding that a petitioner “is entitled to a final written decision
addressing all of the claims it has challenged”); see also 35 U.S.C. § 318(a);
cf. In re Gleave, 560 F.3d 1331, 1338 (not reaching other grounds of
unpatentability after affirming the anticipation ground); see also Beloit
Corp. v. Valmet Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984) (holding that once
a dispositive issue is decided, there is no need to decide other issues).
h. wherein each of the first data file and the second data file is encrypted
prior to play
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 31. Petitioner specifically contends that Schmeidler’s
titles are “formatted into an electronic package called a briq, which contains
the title’s files in a compressed and encrypted form.” Id. (citing Ex. 1002,
2:57–60, 29:30–50, Fig. 12).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:57–60, 29:30–50, Fig. 12.
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i. wherein at least a portion of the first data file is configured to reside
in main memory on the user device at the time of play of the first data
file, wherein at least a portion of the second data file is configured to
reside in main memory on the user device at the time of play of the
second data file
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 32. Petitioner contends that Schmeidler’s “titles run
on the client computer but may not be downloaded in their entirety onto the
client computer.” Id. (citing Ex. 1002, 2:55–57). Petitioner further contends
that the SCDP client software receives blocks of briq data from the RAFT
server and caches portions of briqs in the main memory on the client
computer. Id. at 32–33 (citing Ex. 1002, 2:55–57, 13:26–39, 15:1–8).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:55–57, 13:26–39, 15:1–8.
j. wherein either: [1] the first data file and the second data file each
comprises at least one musical recording, or [2] the first data file and
the second data file each comprises at least one moving image
Petitioner contends that Schmeidler alone or Schmeidler in view of
Wiser, discloses or renders obvious this limitation. Pet. 34–35. Petitioner
contends that the claim is written in disjunctive form and, therefore, it must
show only one of either a musical recording or a moving image. Id. at 34.
Petitioner contends that Schmeidler discloses that its virtual storefront server
offers media titles including “e.g. movie, audio clip.” Id. at 35 (citing
Ex. 1002, 28:53–66). Petitioner further contends that a skilled artisan would
have understood that a movie includes moving images and that a musical
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recording is a common type of audio clip. Id. at 35 (citing Ex. 1005 ¶¶ 126–
127).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 28:53–66. Therefore, it is not
necessary to reach Petitioner’s alternate theory that Schmeidler in
combination with Wiser discloses this claim limitation.
k. wherein the processor is configured to require a first authorization,
which first authorization is configured to enable at least one of
transmission or play of at least a portion of each of the first data file
and the second data file
Petitioner contends that Schmeidler discloses or renders obvious this
limitation. Pet. 43. Petitioner specifically contends that Schmeidler
discloses that, upon selection of a title from the server, the user negotiates
for purchase of the title, and the purchase can be for an individual title or a
package of multiple titles. Id. (citing Ex. 1002, 2:35–46, 26:36–48, 28:31–
46). The negotiation includes “user registration with an eCommerce server,
providing billing information, and selecting a purchase type associated with
the selected title.” Id. (citing Ex. 1002, 2:38–42, 9:14–20, 14:7–13).
Petitioner further contends that purchase of a package of multiple titles
involves “a single payment for unlimited use of a set of titles over a
specified period of time.” Id. (citing Ex. 1002, 26:40–42, 28:31–41;
Ex. 1005 ¶ 135). Petitioner also contends that after the purchase is
complete, the eCommerce server provides a digitally signed launch string to
the client computer. Id. (citing Ex. 1002, 9:21–29, 14:13–15). According to
Petitioner, the launch string “includes all the information needed for the
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CAS server to later recognize the user’s right to the content including a
Universal Resource Name (URN)” and also includes “a goods type
indicating if the purchase is by package subscription.” Id. (citing Ex. 1002,
9:21–29, 26:23–63, 28:6–12, Fig. 9). Petitioner further contends that after
receipt of the launch string, the client computer’s “browser invokes launcher
software.” Id. at 44 (citing Ex. 1002, 9:25–29, 13:42–50; Ex. 1005 ¶ 136).
Petitioner further contends that the “launcher software extracts the URN
from the launch string and requests that the CAS server convert the URN to
a URL that identifies the location of a briq including the content at a RAFT
server” and “sends a purchase request including the launch string to the CAS
server.” Id. (citing Ex. 1002, 9:35–45, 13:50–14:2, 14:20–26, 14:39–42;
Ex. 1005 ¶ 137). Petitioner further contends that the CAS server “returns a
RAFT authorization token and activator to the launcher software” and the
launcher software launches the title “by passing the activator to the ARFSD
VxD . . . and bypassing the authorization token to a RAFT VxD.” Id. (citing
Ex. 1002, 9:1–58, 14:42–45, 21:15–17, 21:20–27). Petitioner further
contends that “RAFT VxD sends the authorization token to a RAFT server
to obtain briq data from the RAFT server, and the ARFSD VxD runs the
activator . . . to decrypt . . . the briq data.” Id. (citing Ex. 1002, 9:1–58,
12:4–8).
Based on this process, Petitioner contends that there are three alternate
ways that Schmeidler discloses the recited “first authorization.” See Pet. 47–
48. First, Petitioner contends that a skilled artisan would understand “that
Schmeidler’s disclosure of a user purchasing a package subscription for
unlimited access to multiple titles for a period of time, including for example
user registration, the providing of billing information, and the selection of a
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purchase type” is a first authorization. Id. at 45–46 (citing Ex. 1002, 3:41–
51, 19:21–23, 23:11, 25:4–6; Ex. 1005 ¶ 140). Second, Petitioner contends
that a skilled artisan would “recognize Schmeidler’s disclosure of a ‘goods
type’ field of a launch string indicating that a title should be charged as part
of a package subscription for multiple files, or the CAS signature of the
launch string confirming the launch string as valid” is a first authorization.
Id. at 46–47 (citing Ex. 1002, 9:20–29, 9:45–47, 21:33–49, 26:36–52;
Ex. 1005 ¶ 141). Third, Petitioner contends that a skilled artisan “would
recognize Schmeidler’s disclosure of information in an authorization token
(e.g., time period, IP address) that indicates a user has access to a briq
including multiple titles for a period of time” is a first authorization. Id. at
47 (citing Ex. 1002, 3:47–51, 15:54–56, 23:3–9, 29:51–53; Ex. 1005 ¶ 142).
The ’880 patent describes two different types of authorizations. The
first type relates to authorizations provided by service facility 11. The ’880
patent describes that “[t]he system can transmit the catalog to a requesting
user, and set up customer accounts, process payments from customers for
establishing file access authorizations” and “can set an authorization level of
the customer’s authorization to a first value corresponding to a first
authorized plurality of the electronic files.” Ex. 1001, 2:18–21, 2:32–34.
Furthermore, “the authorization is independent of both the selected files and
the number of files selected among those that are authorized” and “can be
only for a period of time.” Id. at 2:51–53, 2:57. The second type of
authorization is provided by the user to the service facility 11. The ’880
patent describes that “the user provides identification data and payment
authorization in a conventional manner and optionally, a desired
authorization level that can define a number of plays, a period of time . . .
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and premium options such as whether any of ‘new releases’ is to be
authorized.” Id. at 6:14–20 (emphasis added).
The Petition’s reliance on Schmeidler’s Package Subscription model
falls within the second type of authorization because it is based on
“Schmeidler’s disclosure of a user purchasing a package subscription for
unlimited access to multiple titles for a period of time.” Pet. 45–46.
Consequently, Schmeidler’s Package Subscription model corresponds to the
recited first authorization because it reflects payment by the customer for “a
desired authorization level.” Ex. 1001, 6:14–20.
The Petition’s reliance on the authorization token falls within the first
category of authorization because it is provided by the service facility.
Consequently, the authorization token also corresponds to the recited first
authorization.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler’s
Package Subscription model and authorization tokens each disclose this
limitation. See Ex. 1002, 3:41–51, 9:20–29, 9:45–47, 15:54–56, 19:21–23,
21:33–49; 23:3–11, 26:36–52, 25:4–6, 29:51–53.
l. wherein the first authorization is configured to expire with respect to
both the first data file and the second data file if at least one
predetermined act is not performed by or on behalf of the user within a
predetermined period of time
Petitioner contends that Schmeidler discloses or renders obvious this
limitation. Pet. 51–52. Petitioner specifically contends that Schmeidler
“discloses that a purchase through a package subscription model offers
‘unlimited access to a set of multiple files for a limited time” and that the
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“subscriptions ‘can be renewed.’” Id. at 52 (citing Ex. 1002, 26:40–42,
28:31–37; Ex. 1005 ¶ 51). Petitioner further contends that a “user’s
purchase of unlimited access to multiple titles for a period of time negotiated
with the eCommerce server expires when the period of time expires unless
the user renews the subscription.” Id.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this limitation. See Ex. 1002, 26:40–42, 28:31–37.
m. wherein the at least one predetermined act and the predetermined
period of time are the same for both the first data file and the second
data file
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation because it “discloses that a user can purchase a package
subscription that provides unlimited access to multiple titles for a limited
period of time, and that each of these titles can include one or more files”
and that subscriptions can be renewed. Pet. 52–53 (citing Ex. 1002, 26:36–
42, 28:31–43, 29:31–53. Fig. 12). According to Petitioner, the limited
period of time and renewal are the same for multiple titles that include one
or more files. Id. at 53.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 26:36–42, 28:31–43, 29:31–
53, Fig. 12.
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n. wherein the first authorization is usable across at least two logon
sessions within the predetermined period of time
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 53–56. Petitioner, relying on Schmeidler’s Package
Subscription model, contends a skilled artisan would have understood that
“when a user purchases a subscription providing access to multiple titles for
a limited time, including registering, providing billing information, and
selecting the purchase type, the access is usable until the limited time
expires” and that “it was common for media distribution systems to require a
user to login via a webpage, such as by entering a username and password.”
Id. at 53. Petitioner further contends that:
It would have been obvious to utilize such a login procedure in
the system of Schmeidler, and a [skilled artisan] would have
understood the client computer of Schmeidler as being capable
of accessing files that have already been purchased, even if a
user logs out and logs back in, so long as the subscription
period that was purchased has not expired.
Id. (citing Ex. 1005 ¶¶ 153–154).
Petitioner further contends that a skilled artisan would have
understood that for “each login . . . each approval of a launch string by a
CAS server, or each approval of an authorization by a RAFT server to be a
‘session’” “because the titles are run, but not installed, on the client
computer.” Id. at 54 (citing Ex. 1002, 2:65–3:16). Petitioner further
contends that a skilled artisan would have understood that “performing any
of these steps more than once for titles in a subscription package is using
‘the first authorization . . . across at least two logon sessions within the
predetermined period of time.’” Id. (citing Ex. 1005 ¶ 155).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
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Based on our review of the evidence discussed above, Schmeidler
teaches this claim limitation. We specifically credit the testimony of Dr.
Wolfe and determine that based on Schmeidler’s Package Subscription
model, a person of ordinary skill in art at the time of the invention would
have understood that purchasing a subscription providing access to multiple
titles for a limited time would limit the time access was usable. See Ex.
1005 ¶¶ 153–155; Ex. 1002, 2:65–3:16.
o. wherein the at least one of transmission or play of at least a portion of
each of the first data file and the second data file is configured to be
at least one of limited or inhibited after the expiration of the first
authorization
Petitioner contends that Schmeidler discloses or renders obvious this
claim limitation. Pet. 56–57. Petitioner contends that Schmeidler’s
authorization tokens allow a user to access particular titles for a specified
time period and “[t]he RAFT server will deny access if the server’s current
time is not within the time window specified in the token.” Id. at 57 (citing
Ex. 1002, 22:40–23:15). According to Petitioner, this disclosure in
Schmeidler means “that ‘transmission’ of titles does not occur after the
authorization token has expired.” Id.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 22:40–23:15.
p. Summary of Claim 1
For all the foregoing reasons, we determine that Petitioner establishes
by a preponderance of the evidence that claim 1 would have been obvious
over Schmeidler.
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5. Independent Claim 13
Independent claim 13 is a method claim. Petitioner contends that
Schmeidler discloses both a system and method. Pet. 18 (citing Ex. 1002,
Abstract, 8:65–10:7, Figs. 4A, 4D). Claim 13 recites many limitations that
are substantially similar to those recited in claim 1. Ex. 1001, 15:54–16:37.
For the preamble and the similar claim limitations, Petitioner relies on the
same explanations and evidence as for claim 1. Pet. 16–19, 22–39, 42–56,
56–58. For the same reasons discussed above in connection with claim 1,
Schmeidler discloses these limitations.
Claim 13 additionally recites “receiving a first request from a user
device to access at least one catalog stored in a memory.” Petitioner
contends Schmeidler discloses or at least renders obvious this claim
limitation. Pet. 21–22. Petitioner contends that Schmeidler discloses “that a
client computer communicates with the virtual storefront server over a
network using a modem, and that the virtual storefront sever is implemented
as a conventional web server with a graphical user interface that allows
clients to browse titles with a conventional network browser.” Id. at 21
(citing Ex. 1002, 2:35–38, 9:5–10, 27:49–63). Petitioner further contends
that “its servers are connectable over the computer network to ‘one or more
requestor processes’ and that a ‘requestor’ may access a source.” Id. at 22
(citing Ex. 1002, 4:34–47; Ex. 1005 ¶¶ 91–96).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, Abstract, 2:35–38, 4:34–47,
8:65–10:7, 9:5–10, 27:49–63, Figs. 4A, 4D.
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Claim 13 additionally recites “returning the access to the at least one
catalog in response to the first request.” Petitioner contends Schmeidler
discloses or at least renders obvious this claim limitation. Pet. 39–41.
Petitioner contends the “’880 patent discloses that the return catalog step
‘can be performed by simply transmitting a listing of the catalog[] over the
computer network[] to the requesting user.” Id. at 39 (citing Ex. 1001, 5:54–
59). Petitioner contends that Schmeidler “discloses that users select titles
from a catalog at a virtual storefront server, which can be implemented as a
conventional web server and which can be accessed with a web browser.”
Id. at 40 (citing Ex. 1002, 2:35–38, 9:5–10, 14:7–10, 27:49–54, 28:52–66).
Petitioner further contends that a skilled artisan would have “understood
that, in accessing a catalog on a conventional web server via a conventional
web browser, a request from the client computer would be sent to the web
server to access the catalog and the request would be received by the virtual
storefront server” and Schmeidler “operates by sending a request for a
webpage from the a client computer to a server computer and then returning
the web page from the server computer to the client computer.” Id.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:35–38, 9:5–10, 14:7–10,
27:49–54, 28:52–66.
Claim 13 additionally recites “receiving a second request from the
user device for at least one of transmission or play of at least a portion of
each of the first data file and the second data file.” Petitioner contends
Schmeidler discloses or at least renders obvious this claim limitation.
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Pet. 41–42. Petitioner contends, in Schmeidler, that the user’s selection of a
title from the catalog at the virtual storefront server corresponds to the
recited second request and that selecting a package subscription including
multiple access to multiple titles also corresponds to the recited second
request. Id. at 42 (citing Ex. 1002, 28:31–41, 26:36–48).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 28:31–41, 26:36–48.
For all the foregoing reasons, we determine that Petitioner establishes
by a preponderance of the evidence that claim 13 would have been obvious
over Schmeidler.
6. Independent Claim 25
Independent claim 25 is directed to “[a] non-transitory computer-
readable medium having computer-executable instructions stored thereon”
and recites many limitations that are substantially similar to those recited in
claim 1 and claim 13. Ex. 1001, 17:9–18:6. For the preamble and these
claim limitations, Petitioner relies on the same explanations and evidence as
for claim 1 and claim 13. Pet. 16–19, 21–41, 42–56, 56–58. Petitioner
contends that Schmeidler discloses “[t]he client computer has software
(‘computer-executable instruction’) stored in a computer readable medium
(e.g., diskette, CD-ROM, ROM, fixed disk, memory) (‘non-transitory
medium’) that is executed to cause the client computer to perform the
method.” Id. at 18–19 (citing Ex. 1002, 6:49–7:50, 8:21–24, 9:5–8, 10:22–
24, 32:34–36, 32:56–67, Fig. 1, 2A). Patent Owner does not dispute
Petitioner’s contentions. See PO Resp. 15–25. For the same reasons
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discussed above in connection with claim 1, Schmeidler discloses these
limitations.
Claim 25 additionally recites “receiving, at the user device, at least a
portion of each of the first data file and the second data file.” Petitioner
contends Schmeidler discloses or at least renders obvious this claim
limitation. Pet. 56. Petitioner specifically contends that Schmeidler
“discloses that a user can purchase a package subscription, where the user is
granted unlimited access to multiple titles for a limited period of time” and
the “titles are stored in briqs at a RAFT server.” Id. (citing Ex. 1002, 2:62–
64, 26:36–42, 28:31–43). Petitioner further contends “[e]ach briq includes
one or more titles, each of which has one or more files associated with it”
and that when the titles are run, “the client computer retrieves requested
blocks of briq data from the RAFT server.” Id. (citing Ex. 1002, 2:64–3:20,
29:30–50).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. See Ex. 1002, 2:62–3:20, 26:36–42, 28:31–
43, 29:30–50.
For all the foregoing reasons, we determine that Petitioner establishes
by a preponderance of the evidence that claim 25 would have been obvious
over Schmeidler.
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7. Dependent Claims 2–10, 14–22, 26–34
i. Claims 2, 14, 2611
Claim 2 depends from claim 1 and requires that the first data file and
second data file “reside on non-volatile memory on the user device at the
time of play.” Ex. 1001, 15:16–21. Petitioner contends Schmeidler
“discloses that the client computer includes system RAM and mass storage
device, such as a hard drive.” Pet. 58 (citing Ex. 1002, 6:64–65, 7:6–9).
Petitioner further contends portions of the briqs disclosed in Schmeidler are
“temporarily cached in a portion of memory” on the client computer. Id.
(citing Ex. 1002, 13:26–32). Petitioner further contends that Schmeidler
discloses “that files in a briq can be tagged with a ‘write-through’ attribute,
and these files are locally stored under the SCDP install directory on the
client computer.” Id. (citing Ex. 1002, 16:59–17:23). Petitioner further
contends a skilled artisan “would have understood local, persistent storage to
be non-volatile memory, because Schmeidler discloses use of a hard drive,
which does not lose data when powered down and which is therefore
referred to in the field as non-volatile.” Id. (citing Ex. 1005 ¶ 124).
Petitioner next contends that “[w]hen a write-through file is started, the
information is taken from the file in the local storage area, and if not there, it
is copied from the briq” and according to Petitioner, a skilled artisan would
have understood this means “the write-through file is stored in the local
storage at the time of execution . . . of the file.” Id. at 58–59 (citing
Ex. 1002, 17:27–35; Ex. 1004 ¶ 124). With reference to element e of

11 Petitioner argues claims 2, 14, and 26 as a group. Pet. 58. Claims 14
and 16 contain limitations substantially similar limitations to claim 2 but
depend from different claims. Ex. 1001, 15:16–21, 16:38–43, 18:8–13. Our
analysis applies to each of these claims.
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claim 1, Petitioner contends that in the case of a briq with two separate
media files, the first media file and second media file are both “configured to
reside in non-volatile memory on the user device at the time of play” as
required by claim 2.
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this claim limitation. Ex. 1002, 6:64–65, 7:6–9, 13:26–32, 16:59–
17:23, 17:27–35. Therefore, we determine that Petitioner establishes by a
preponderance of the evidence that claims 2, 14, and 26 would have been
obvious over Schmeidler.
ii. Claims 3, 4, 15, 16, 27, 2812
Claim 3 depends from claim 1 and requires that “the first
authorization comprises at least one of identification data, customer account
data, a customer identifier or a password.” Ex. 1001, 15:22–24.
Claim 3 is disjunctive and Petitioner need only show that Schmeidler
discloses one of the recited elements. As discussed above in connection
with element k of claim 1, a customer purchasing a package subscription
would provide a user registration and billing information to the eCommerce
server. Petitioner contends that a skilled artisan would have understood that
Schmeidler’s “user registration . . . to be a ‘customer identifier’ because it
identifies the specific user through an account identifier,” “the billing
information to be ‘customer account data’ because it literally describes a

12 Petitioner argues claims 3, 4, 15, 16, 27, and 28 as a group. Pet. 58.
Claims 4, 15, 16, 27, and 28 contain limitations substantially similar to
claim 3 but depend from different claims. Ex. 1001, 15:22–27, 16:44–49,
18:18–21. Our analysis applies to each of these claims.
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financial account associated with a customer,” and “a CAS signature to be a
‘password’ because it consists of a string of symbols that distinguishes
authorized access to the customer account from unauthorized access.”
Pet. 60 (citing Ex. 1005 ¶ 160).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
teaches this limitation. See Ex. 1005 ¶ 160. Therefore, we determine that
Petitioner establishes by a preponderance of the evidence that claims 3, 4,
15, 16, 27, and 28 would have been obvious over Schmeidler.
iii. Claim 5, 6, 17, 18, 29, 3013
Claim 5 depends from claim 1 and requires that “the predetermined
act comprises at least one of identification, verification, authorization,
renewal, or extension.” Ex. 1001, 15:28–30.
Petitioner contends “during execution of a title, the client computer
periodically asks the CAS server to refresh the activator and authorization
token.” Pet. 61 (citing Ex. 1002, 28:31–43). Petitioner further contends
“[t]he CAS server verifies a launch string to determine whether the launch
string has been signed before sending the client computer the refreshed
activator and authorization token” and “the authorization token includes an
end time, before which it needs to be refreshed.” Id. (citing Ex. 1002,
15:23–32, 21:7–17, 21:30–52, 23:3–9). Petitioner further contends a skilled
artisan would have understood the CAS “verifying this signature to be an

13 Petitioner argues claims 5, 6, 17, 18, 29, and 30 as a group. Pet. 60.
Claims 6, 17, 18, 29, and 30 contain limitations substantially similar to
claim 6 but depend from different claims. Ex. 1001, 15:28–33, 16:50–55,
18:22–29. Our analysis applies to each of these claims.
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‘identification,’ ‘verification,’ or ‘authorization,’ as claimed” and “refresh to
be a predetermined act that needs to be performed within a predetermined
period of time to avoid expiration of the client computer’s authorization to
access a title.” Id. (citing Ex. 1005 ¶ 164).
Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this limitation. See Ex. 1002, 15:23–32, 21:7–17, 21:30–52, 23:3–
9, 28:31–43. Therefore, we determine that Petitioner establishes by a
preponderance of the evidence that claims 5, 6, 17, 18, 29, and 30 would
have been obvious over Schmeidler.
iv. Claims 7, 8, 19, 20, 31, 3114
Claim 7 depends from claim 1 and requires “wherein the first
authorization is capable of reactivation after expiration.” Ex. 1001, 15:34–
35.
Petitioner contends that Schmeidler “discloses that the activator and
authorization token refresh after they timeout.” Pet. 63 (citing Ex. 1002,
9:65–10:7, 11:66–12:3). Petitioner further contends that a skilled artisan
“would have understood that a client computer’s authorization to access a
title is ‘reactivated after expiration’ by way of an authorization token
refresh” and “the timeout in Schmeidler identifies the point in time where an
authorization token expires and thus authorized use is not possible until a
replacement token is obtained.” Id. (citing Ex. 1005 ¶ 166).

14 Petitioner argues claims 7, 8, 19, 20, 31, and 32 as a group. Pet. 61.
Claims 8, 19, 20, 31, and 32 contain limitations substantially similar to claim
7 but depend from different claims. Ex. 1001, 15:34–37, 16:56–59, 18:22–
29. Our analysis applies to each of these claims.
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Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this limitation. See Ex. 1002, 9:65–10:7, 11:66–12:3. Therefore,
we determine that Petitioner establishes by a preponderance of the evidence
that claims 7, 8, 19, 20, 31, and 32 would have been obvious over
Schmeidler.
v. Claims 9, 10, 21, 22, 33, 3415
Claim 9 depends from claim 1 and requires “wherein at least a portion
of each of the first data file and the second data file is capable of
transmission to the user device over the communications network from a
service facility.” Ex. 1001, 15:38–41.
Petitioner contends the “’880 patent discloses that the service facility
can be implemented as a server computer that stores at least some of the data
files.” Pet. 63 (citing Ex. 1001, 3:1–2, 4:2–8). Petitioner further contends
Schmeidler’s “RAFT server transmits datablocks of briq data to the client
computer over a ‘communications network’ when the client computer is
executing a title” and a “briq comprises one or more titles, each of which
includes one or more files.” Id. (citing Ex. 1002, 2:65–3:6, 15:1–8, 16:18–
21, 16:27–36, 29:30–50). Petitioner further contends a skilled artisan
“would have understood the RAFT server to be a ‘service facility’ as
claimed” because it “serves up the blocks of briq to the client computer.” Id.

15 Petitioner argues claims 9, 10, 21, 22, 33, and 34 as a group. Pet. 63.
Claims 10, 21, 22, 33, and 34 contain limitations substantially similar to
claim 9 but depend from different claims. Ex. 1001, 15:38–45, 16:60–67,
18:36–45. Our analysis applies to each of these claims.
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Patent Owner does not dispute Petitioner’s contentions. See PO
Resp. 15–25.
Based on our review of the evidence discussed above, Schmeidler
discloses this limitation. See Ex. 1002, 2:65–3:6, 15:1–8, 16:18–21, 16:27–
36, 29:30–50. Therefore, we determine that Petitioner establishes by a
preponderance of the evidence that claims 9, 10, 21, 22, 33, and 34 would
have been obvious over Schmeidler.
III. PATENT OWNER’S REMAINING CONTENTIONS
1. Petitioner’s Alleged Failure to Name
All Real Parties in Interest
Patent Owner contends that the Board lacks jurisdiction to proceed
with this inter partes review because Petitioner failed to name Spotify and
Twitter (collectively “Spotify”) as real parties in interest under 35 U.S.C.
§ 312(a). PO Resp. 3. According to Patent Owner, Spotify are members of
Petitioner. Id. (citing Ex. 2030). Patent Owner notes that Petitioner listed
the Delaware Litigation as a related matter in the Petition but “failed to name
Spotify as an RPI and failed to request leave from the Board to correct its
omission after” the Board’s precedential decision in RPX Corp. v.
Applications in Internet Time, LLC, IPR2015-01750, Paper 128 (Oct. 2,
2020) (precedential). Id. at 4; see also id. at 8–15 (arguing that the factors
identified in RPX Corp. require a finding that Spotify is a real party in
interest in this proceeding). Patent Owner also notes that “Spotify is now
beyond the one-year time bar for filing IPR’s concerning the patents B#
asserted against it in Delaware.” Id. at 4 (citing 35 U.S.C. § 315(b)). Patent
Owner further contends that because Spotify was not named as a real party
in interest in the Petition, no filing date should have been accorded to the
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Petition because a statutory requirement under 35 U.S.C. § 312 was not
satisfied. Id. at 5. Patent Owner further contends we should not permit
Petitioner to correct its failure to name all RPIs but, if we do, we should
reset the filing date to the submission date of “Petitioner’s identification of
RPIs.” Id. According to Patent Owner, because Spotify is now time barred,
we “will lack jurisdiction to proceed to trial on the Petition.” Id.; see also
Sur-reply, 13 (arguing “Spotify would be time barred under § 315(b) should
it seek to file any IPR challenging the same claims as Petitioner challenges
here.”).
Petitioner responds that Patent Owner did not raise an RPI issue until
after institution. Reply 1. Petitioner contends that we “need not address
whether a party is an unnamed RPI because no time bar or estoppel
provisions under 35 U.S.C. § 315 are implicated.” Id. (citing SharkNinja
Operating LLC v. iRobot Corp., IPR2020-00734, Paper 11, 18 (PTAB Oct.
6, 2020) (precedential)). Petitioner further contends that Patent Owner “has
no evidence to support its RPI allegations” and “the record shows that
Unified is the sole RPI––not its members.” Id.; see also id. at 3–10 (arguing
that the factors identified in RPX Corp. do not require a finding that Spotify
is a real party in interest in this proceeding). Petitioner further contends that
Patent Owner “makes no suggestion as to why Spotify would have continued
interest” in light of the voluntary dismissal of the Delaware Litigation.
For the following reasons, we are not persuaded by Patent Owner’s
argument that we lack jurisdiction to proceed in this case due to any alleged
failure by Petitioner to name Spotify as an RPI.
First, Patent Owner’s argument is based on an incorrect premise that
35 U.S.C. § 312(a) is a jurisdictional statute. This premise is contrary to the
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Board’s precedential decision in Lumentum Holdings, Inc. v. Capella
Photonics, Inc., IPR2015-00739, Paper 38, 5 (PTAB Mar. 4, 2016)
(precedential) (“§ 312(a) is not jurisdictional”); see also SharkNinja , Paper
11 at 17 (PTAB Oct. 6, 2020) (precedential) (“Section 312(a)(2) . . . serves
important notice functions”). Furthermore, Lumentum makes clear that the
Board may permit a party to rectify an issue of compliance with the
requirements of § 312(a). Lumentum, Paper 38 at 5.
Second, there were facts in RPX Corp. not present in this case. In
particular, in RPX Corp., an unnamed RPI, Salesforce, had been served with
a complaint for infringement more than one year prior to the filing of the
Petition. RPX Corp., Paper 128, 7 (limiting “analysis to whether the
§ 315(b) time-barred entity Salesforce should have been identified as an RPI
or privy”). The Board recognized that failing to name a time-barred RPI
“creates the danger of ‘two bites at the apple’ that the statutes were meant to
prevent via § 315(e) estoppel provisions and the § 315(b) time bar.” Id. at
34.
In this case, although Spotify is now time barred, Patent Owner does
not contend that Spotify or any other member of Petitioner was time barred
as of the date the Petition in this case was filed. Tr. 40:1–6 (Patent Owner
agreeing that Spotify was not time barred when the Petition was filed.).
Consequently, even if we were to determine that Spotify is an RPI of
Petitioner, the § 315(b) time bar is not implicated because Spotify was not
time barred at the time the Petition was filed.
Any estoppel issues under § 315(e) are purely speculative at this point
because the Delaware Litigation has been voluntarily dismissed by Patent
Owner. Tr. 40:7–10. If Patent Owner decides to again sue Spotify, Patent
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Owner may move the District Court to invoke § 315(e) estoppel against
Spotify.
Because we determine that neither the time bar nor estoppel
provisions of 35 U.S.C. § 315 are implicated in this case, “we need not
address whether [Spotify] is an unnamed RPI.” SharkNinja, Paper 11 at 18.
2. The Board Exceeds Its Jurisdiction Under the APA and
Exercises Discretion in an Arbitrary and Capricious
Manner Where the Director Has Failed to Follow Notice
and Comment Rulemaking
Patent Owner refers to two issues in our Decision on Institution which
it argues are arbitrary and capricious due to lack of Notice and Comment
Rulemaking. Patent Owner first contends that we “refused to evaluate both
parties’ conflicting expert testimony to make a determination as to which is
more persuasive and simply ordered a trial anyway.” PO Resp. 33 (citing
Dec. 28–29). The second issue is our determination not to exercise our
discretion to deny institution under 35 U.S.C. § 325(d). Id. at 35. We
address each issue in turn.
The first issue relates to element g of claim 1 which we find is
disclosed in Schmeidler. In our Decision on Institution, we preliminarily
found that Schmeidler disclosed this limitation. Dec. 23–27. Patent
Owner’s issue relates to the alternate ground of Schmeidler and Jaisimha.
PO Resp. 33. In the Preliminary Response, Patent Owner interposed six
reasons why one of ordinary skill in the art allegedly would not have
combined the teachings of Schmeidler and Jaisimha. Dec. 28. Because the
Schmeidler ground was sufficient for institution purposes, we did not reach
the merits of the Schmeidler and Jaisimha ground. Even if we made a
preliminary determination that the Schmeidler and Jaisimha ground was not
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sufficient for institution purposes, we institute on all claims and grounds in
the petition if Petitioner persuades us that it is reasonably likely to prevail
with respect to at least one challenged claim. See Consol. TPG, 64 (2019);
see also SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355–56 (2018) (stating
that a decision to institute under 35 U.S.C. § 314(b) may not institute review
on fewer than all claims challenged in the petition).
With respect to the § 325(d) issue, Patent Owner contends that our
reliance on the Board’s precedential decisions Becton, Dickinson and Co. v.
B. Braun Melsungen AG, IPR2017–01586, Paper 8 (PTAB Dec. 15, 2017)
and Advanced Bionics, LLC v. MED-EL Elektromedizinische Gerate GmbH,
IPR2019-01469, Paper 6 (Feb. 13, 2020) is arbitrary and capricious in the
absence of notice and comment rulemaking. PO Resp. 35–37. Patent
Owner injected § 325(d) into this proceeding by requesting we exercise our
discretion to deny institution in the Preliminary Response. Paper 6, 4.
Patent Owner filed an authorized Sur-reply addressing § 325(d) and
provided specific arguments referencing both Becton Dickinson and
Advanced Bionics. Paper 15, 1–4. In neither paper did Patent Owner argue
that our reliance on Becton Dickinson and Advanced Bionics would be
arbitrary and capricious or propose an alternate path for us to proceed to
evaluate its § 325(d) arguments. See generally Paper 6; Paper 15.
Furthermore, Patent Owner did not seek rehearing of the § 325(d) analysis in
our Decision on Institution. By not raising this argument prior to institution,
Patent Owner waived this issue which, in any event, is now moot.
3. The Preponderance of the Evidence Standard Congress
Requires the Board to Use Allegedly Violates Patent
Owner’s Rights Under the Due Process Clause of the Fifth
Amendment to the Constitution
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Patent Owner contends that the preponderance of the evidence
standard mandated by Congress in 35 U.S.C. § 316(e) is “a constitutionally
defective evidentiary standard,” the application of which in this proceeding
“violates the Patent Owner’s Fifth Amendment Rights.” PO Resp. 38, 40.
The preponderance of the evidence standard is set forth in our
governing statute. 35 U.S.C. § 316(e); see also Celgene Corp. v. Peter, 931
F.3d 1342, 1362 (Fed. Cir. 2019) (“IPRs use a preponderance of the
evidence burden of proof.”). Therefore, we apply that standard in this case.
4. Same Panel Instituting and Deciding FWD
Patent Owner contends “that a decision on the merits in this
proceeding by the same PTAB panel that decided to institute the instant IPR
would violate Patent Owner’s Constitutional Due Process rights under the
Fifth Amendment of the U.S. Constitution.” PO Resp. 49. Patent Owner’s
basis for this contention is “the reasons explained in detail by the Patent
Owner in New Vision Gaming v. SG Gaming, Inc. (Fed. Cir. Case No.: 20-
1399).” Id. Based on this alleged due process violation, Patent Owner
“requests that all APJ’s be replaced to form a new panel for any future
actions on the merits in this proceeding.” Id.
Patent Owner does not provide any documents filed in New Vision
Gaming for our review, does not provide a reference to a docket entry, or
make any attempt to articulate the alleged “reasons explained in detail” by
the patent owner in New Vision Gaming. However, even if Patent Owner
did provide such documents, that would be an improper incorporation by
reference. 37 C.F.R. § 42.6(a)(3). Nonetheless, we note the Federal Circuit
found no due process violation when the same panel of PTAB judges
decides both the decision on institution and the final written decision. See
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Ethicon Endo Surgery Inc. v. Covidien LP, 812 F.3d 1023, 1031 (Fed. Cir.
2016) (“We see no due process concerns combining the functions of initial
decision and final disposition on the merits.”). Consequently, we deny
Patent Owner’s request for replacement of the existing panel members.
5. Arthrex
Patent Owner’s argument concerning whether the judges of the Board
were appointed in accordance with the Appointments Clause of the
Constitution (PO Resp. 49–52) is moot in light of the decision in United
States v. Arthrex, 141 S. Ct. 1970 (2021).

IV. CONCLUSION
Based on the record before us, we determine:

16 Because we determine that Schmeidler alone renders the challenged
claims unpatentable, we do not reach Petitioner’s alternate combination of
Schmeidler, Jaisimha, and Wiser.
Claims

35
U.S.C. §
Reference(s)/Basis Claims
Shown
Unpatentable
Claims
Not shown
Unpatentable
1–10,
13–22,
25–34
103(a) Schmeidler16 1–10, 13–22,
25–34

Overall
Outcome
1–10, 13–22,
25–34

IPR2020-00995
Patent 9,553,880 B2

54

IV. ORDER17
For the foregoing reasons, it is hereby:
ORDERED that, based on a preponderance of the evidence that
claims 1–10, 13–22, and 25–34 of the ’880 patent are unpatentable as set
forth in the summary table above;
FURTHER ORDERED that, because this is a Final Written Decision,
parties to this proceeding seeking judicial review of this Decision must
comply with the notice and service requirements of 37 C.F.R. § 90.2.

17 Should Patent Owner wish to pursue amendment of the challenged claims
in a reissue or reexamination proceeding subsequent to the issuance of this
decision, we draw Patent Owner’s attention to the April 2019 Notice
Regarding Options for Amendments by Patent Owner Through Reissue or
Reexamination During a Pending AIA Trial Proceeding. See 84 Fed. Reg.
16,654 (Apr. 22, 2019). If Patent Owner chooses to file a reissue application
or a request for reexamination of the challenged patent, we remind Patent
Owner of its continuing obligation to notify the Board of any such related
matters in updated mandatory notices. See 37 C.F.R. § 42.8(a)(3), (b)(2).
IPR2020-00995
Patent 9,553,880 B2

55
PETITIONER:
Larissa Bifano
Michael Van Handel
DLA PIPER LLP
larissa.bifano@dlapiper.com
michael.vanhandel@dlapiper.com

Alyssa Holtslander
Roshan Mansinghani
UNIFIED PATENTS, LLC
alyssa@unifiedpatents.com
roshan@unifiedpatents.com

PATENT OWNER:
John Kyle
HARRIS LLP
jkyle@klhipbiz.com

Kyle Pendergrass
P&T LAW, APC
kyle@ptlawgroup.co