Amazon.com, Inc.v.Personalized Media Communications LLC

Patent Trial and Appeal Board

Mar 8, 2016

08485283 (P.T.A.B. Mar. 8, 2016)

Trials@uspto.gov Paper No. 60
571.272.7822 Filed: March 8, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________

AMAZON.COM, INC. and AMAZON WEB SERVICES, LLC,
Petitioner,

v.

PERSONALIZED MEDIA COMMUNICATIONS, LLC,
Patent Owner.
_______________

Case IPR2014-01533
Patent 7,805,749
_______________

Before KARL D. EASTHOM, TRENTON A. WARD, and
GEORGIANNA W. BRADEN, Administrative Patent Judges.

BRADEN, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318 and 37 C.F.R. § 42.73

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I. INTRODUCTION
We have jurisdiction to hear this inter partes review under 35 U.S.C.
§ 6(c), and this Final Written Decision is issued pursuant to 35 U.S.C.
§ 318(a) and 37 C.F.R. § 42.73. For the reasons that follow, we determine
that Petitioner has shown by a preponderance of the evidence that claims 2,
3, 9–13, 18, 24, 49, 52, and 53 of U.S. Patent No. 7,805,749 (Ex. 1001, “the
’749 patent”) are unpatentable. We also determine that Patent Owner has
not met its burden on its Motion to Amend regarding entry of proposed
substitute claims 56–67, and thus, we deny the Motion to Amend.
A. Procedural History
Amazon.Com, Inc. and Amazon Web Services, LLC (“Petitioner”)
filed a Petition (Paper 1, “Pet.”) to institute an inter partes review of
claims 2, 3, 9–13, 18, 24, 49, 52, and 53 of the ’749 patent. Personalized
Media Communications, LLC (“Patent Owner”) filed a Preliminary
Response (Paper 6, “Prelim. Resp.”). Pursuant to 35 U.S.C. § 314(a), we
instituted an inter partes review of claims 2, 3, 9–13, 18, 24, 49, 52, and 53
as unpatentable under 35 U.S.C. § 103 in view of Powell1 and Guillou.2 See
Paper 7 (“Dec. to Inst.”), 30.
After institution of trial, Petitioner filed a request for rehearing
(Paper 11), as did Patent Owner (Paper 14). The requests for rehearing were
considered and denied. Papers 16, 23. Patent Owner then filed a Patent

1 Chris Powell, Prestel: the Opportunity for Advertising, VIEWDATA AND
VIDEOTEXT 1980–81: AWORLDWIDE REPORT, 1980 (“Powell,” Ex. 1014).
2 U.S. Patent No. 4,337,483, issued June 29, 1982 (“Guillou,” Ex. 1022).
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Owner Response (Paper 27, “PO Resp.”), to which Petitioner filed a Reply
(Paper 38, “Reply”).
In addition, Patent Owner also filed a Motion to Amend the Claims
(Paper 26), to which Petitioner filed an Opposition (Paper 39). Patent
Owner then filed a Reply to Petitioner’s Opposition to the Motion to Amend
the Claims. Paper 46.
Patent Owner filed observations on the cross-examination of
Petitioner’s declarant (Paper 51), to which Petitioner filed a response
(Paper 54). Petitioner filed observations and amended observations on the
cross-examination of Patent Owner’s declarant (Papers 53, 56), to which
Patent Owner filed a response and an amended response (Papers 55, 58).
An oral argument was held on Dec. 8, 2015. A transcript of the oral
argument is included in the record. Paper 59 (“Tr.”).
B. Related Proceedings
Petitioner informs us that the ’749 patent is the subject of a lawsuit:
Personalized Media Commc’ns, LLC v. Amazon.com, Inc., No. 1:13-cv-
1608-RGA (D. Del. filed Sept. 23, 2013). Pet. 1. According to Petitioner,
the district court’s judgment in the lawsuit has been appealed to the Court of
Appeals for the Federal Circuit as Appeal No. 15-2008. Paper 41, 1.
Petitioner also informs us that six patents related to the ’749 patent are the
subject of concurrently-filed petitions for inter partes review. Pet. 1; Paper
41, 1; see IPR2014-01527, IPR2014-01528, IPR2014-01530,
IPR2014-01531, IPR2014-01532, and IPR2014-01534.
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C. The ’749 Patent
The ’749 patent discloses a system for using embedded signals to
deliver personalized program content to a subscriber station. Ex. 1001,
7:47–48, 15:14–46. One embodiment of the disclosed system is illustrated
in Figure 7, and is reproduced below.

Figure 7 shows that TV set 202, printer 221, and local input device 225 are
connected to a system that includes micro-computer 205 and signal
processor 200. Id. at 242:31–59. The ’749 patent describes personalized
content being delivered to a subscriber substation by transmission of a
message, which can be encrypted and decrypted. Id. at 246:26–29. The
content is decrypted using a decryptor that is provided with the personalized
content-containing message. Id. at 15:21–27. Personalized content can be
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sent to and coordinated through computers, television, and printers. Id. at
241:57–60.
Another embodiment of the ’749 patent describes a subscriber
watching a television program called “Exotic Meals of India.” Id. at
241:50–246:58. According to the ’749 patent, midway through the program
“Exotic Meals of India,” subscribers are offered a printout of the recipe and
shopping list for the ingredients of the meal that is being prepared on the
show. Id. at 242:63–66. Subscribers are prompted to enter a code, TV567#,
into a local input device. Id. at 242:63–243:23. A receiver station receives
the code, and accesses preprogrammed information (including “particular
program unit information and TV567# information”) that is stored in a
buffer at microcomputer 205. Id. at 241:61–65, 243:24–56; Figs. 7, 7F. One
minute later, the program-originating studio embeds a second signal that
includes “unit code identification information that identifies the
programming of the information segment of said message” and a computer
program for generating a user-specific recipe. Id. at 243:60–244:3. Receipt
of this second signal causes the receiver station where the TV567# code was
entered to execute the program (instructions) to generate a user-specific
recipe. Id. at 244:4–59. The ’749 patent states that the information of the
second message, i.e., the message containing the instructions for generating
the recipe and shopping list, “can be encrypted and caused to be decrypted in
any of the methods described above—for example, in the method of the first
message of example #4.” Id. at 246:26–29.
Example #4 of the ’749 patent specifically provides a process for
decrypting a message in which a receiver station selects a “program unit
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identification code,” selects preprogrammed key information, decrypts a
message using a key, and stores the program unit information and decryption
key information in a “meter record” at a recorder. Id. at 115:60–117:2. The
information in the record is transferred to a remote billing station via a
telephone connection. Id. at 48:45–60.
D. Illustrative Claim
As noted above, an inter partes review was instituted as to claims 2, 3,
9–13, 18, 24, 49, 52, and 53 of the ’749 patent, of which claims 2, 18, and 49
are the only independent claims. Claim 2 is illustrative of the challenged
claims and is reproduced below:
2. A method for mass medium programming promotion and delivery for
use with an interactive video viewing apparatus comprising the steps
of:
receiving a first portion of said mass medium programming in a first
programming signal, said first portion of mass medium
programming including a video image that promotes a second
portion of said mass medium programming;
displaying said video image, said interactive video viewing apparatus
having an input device to receive input from a subscriber;
prompting said subscriber for a reply, during said step of displaying
said video image, as to whether said subscriber wants said second
portion of said mass medium programming promoted in said step
of displaying of said video image, said interactive video viewing
apparatus having a transmitter for communicating said reply to a
remote site;
receiving said reply from said subscriber at said input device in
response to said step of prompting said subscriber, said interactive
video viewing apparatus having a processor for processing said
reply;
processing said reply and selecting at least one of a code and a datum
designating said second portion of said mass medium
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programming to authorize delivery of said second portion of said
mass medium programming;
communicating said selected at least one of a code and a datum to a
remote site;
receiving said second portion of said mass medium programming in a
second programming signal;
decrypting said second portion of said mass medium programming by
using said at least one of a code and a datum in response to said
step of processing said reply; and
delivering said mass medium programming to an output device.
Ex. 1001, 287:17–52.
II. DISCUSSION
A. Claim Construction
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light of the
specification of the patent in which they appear. 37 C.F.R. § 42.100(b); see
In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268, 1275–79 (Fed. Cir.
2015 (“Congress implicitly approved the broadest reasonable interpretation
standard in enacting the AIA,” and “the standard was properly adopted by
PTO regulation”), cert. granted sub nom. Cuozzo Speed Techs., LLC v. Lee,
84 U.S.L.W. 3218 (U.S. Jan. 15, 2016) (No. 15-446). Under that standard,
and absent any special definitions, we give claim terms their ordinary and
customary meaning, as would be understood by one of ordinary skill in the
art at the time of the invention. In re Translogic Tech., Inc., 504 F.3d 1249,
1257 (Fed. Cir. 2007).
Petitioner proposes a construction of the term “decrypting” in the ’749
patent. Pet. 17–18. Patent Owner contests Petitioner’s proposed
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construction for “decrypting” and contends that the terms “designating” and
“selecting” should be construed. PO Resp. 9–18. We note that only terms
which are in controversy need to be construed, and then only to the extent
necessary to resolve the controversy. See Vivid Techs., Inc. v. Am. Sci. &
Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999). We determine that no
express constructions of these claim terms are required for our analysis as
they are not necessary to resolve this proceeding. Our determination that
none of the claim terms require construction is not impacted by whether we
apply the broadest reasonable interpretation or the Phillips standard during
our analysis of the claim. See Phillips v. AWH Corp., 415 F.3d 1303 (Fed.
Cir. 2005).
B. Principles of Law
To prevail in its challenges to the patentability of the claims, a
petitioner must establish facts supporting its challenges by a preponderance
of the evidence. 35 U.S.C. § 316(e); 37 C.F.R. § 42.1(d). A claim is
unpatentable 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). 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
the art; and (4) objective evidence of nonobviousness, i.e., secondary
considerations. See Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
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We analyze the instituted grounds of unpatentability in accordance
with the above-stated principles.
C. Level of Ordinary Skill in the Art
According to Petitioner’s declarant, Mr. Slinn, a person of ordinary
skill in the art relevant to the ’749 patent would have had “a Bachelor’s
degree in Electrical Engineering or a closely related field” and would have
had between two and four years of experience in “implementation of
communications systems and controlling these systems (or similar types of
systems) through the use of computer technology.” Ex. 1004 ¶ 24. Patent
Owner does not offer any contrary explanation regarding who would have
qualified as a person of ordinary skill in the art relevant to the ’749 patent
and appears to agree with Petitioner’s characterization. See PO Resp. 5.
Additionally, Patent Owner’s declarant, Dr. Alfred C. Weaver (“Dr.
Weaver”), uses the level of skill in the art articulated by Mr. Slinn. Ex. 2014
¶¶ 39, 40.
Based on our review of the ’749 patent, the types of problems and
solutions described in the ’749 patent and cited prior art, and the testimony
of Petitioner’s declarant, we adopt Petitioner’s definition of a person of
ordinary skill in the art at the time of the claimed invention. We note that
the applied prior art also reflects the appropriate level of skill at the time of
the claimed invention. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed.
Cir. 2001).
D. Asserted Obviousness of Claims 2, 3, 9–13, 18, 24, 49, 52, and 53
in View of Powell and Guillou
Petitioner contends claims 2, 3, 9–13, 18, 24, 49, 52, and 53 of the
’749 patent are unpatentable under 35 U.S.C. § 103 in view of Powell and
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Guillou. Pet. 45–59; Reply 2–21. Patent Owner disputes Petitioner’s
position, arguing that the cited references fail to disclose all the elements
required by the challenged claims (PO Resp. 26–33, 38–50), there was no
motivation to combine the cited references (id. at 34–38), and evidence of
secondary considerations outweighs a prima facie finding of obviousness
(id. at 51–56). We have reviewed the Petition, the Patent Owner’s
Response, and Petitioner’s Reply, as well as the relevant evidence discussed
in those papers and other record papers. For reasons that follow, we
determine that Petitioner has shown by a preponderance of the evidence that
the challenged claims of the ’749 patent would have been obvious in view of
Powell and Guillou.
1. Overview of Powell
Powell discloses potential advertising opportunities on an interactive
videotex system known as Prestel. Ex. 1014, 233. Videotex generally
referred to a point-to-point computer network system in which a user could
query a host computer for “pages” of information through a telephone line
using a modem, and the retrieved information would be displayed on a TV.
Ex. 1004 ¶ 78. Prestel’s videotex data was transmitted via telephone or
cable television lines to a computer and users were billed for time spent
searching, accessing, and retrieving information. Ex. 1015, 8–12.
Powell discusses several different types of advertising as available on
videotex systems, such as Prestel. One embodiment in Powell discloses that
one form of advertising on videotex systems was by way of a one-line
banner advertisement at the bottom of the page. Ex. 1014, 238. According
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to Powell, Prestel provides the opportunity to promote related information
on another page and thereby prompt the user to select that page:
Then there will be that advertising that cannot be squeezed into
a single line and here I think we will have something of a
“come on” advertisement slotted into related interest pages.
This will be the sort of “find out more – go to Page 2617.”
There has already been some development along these lines by
corporate advertisers: I can imagine much more. For example,
one could imagine Cadbury Schweppes taking one line on
pages giving their company details offering more information
and some other bonus like a Chairman’s statement on the
prospects for the next year by turning to their page.
Id. at 240.
2. Overview of Guillou
Guillou teaches a method for providing and receiving encrypted
content in teletext and viewdata systems. Ex. 1022, Abstract; 1:8–20,
21:23–28 (the encryption/decryption techniques can be applied to the Prestel
system). Guillou teaches that, in a teletext system, the decryption key would
be specific to a “magazine,” i.e., a set of teletext pages. Id. at 5:8–10.
Guillou teaches that the control portion (heading) of a page, which includes
the page number, is not encrypted, but that the information portion of the
page is encrypted. Id. at 3:29–61, 5:17–25. The information portion is
encrypted using the page number and an “operating key K.” Id. at 5:34–37.
At the receiver station, the information portion is decrypted using the same
information, i.e., the operating key K and the page number. Id. at 6:17–29,
7:64–69.
Guillou further teaches that a “double key system” may be used,
wherein the operating key K may be encrypted using a subscriber key Ci,
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resulting in a message Mi. Ex. 1022, 8:15–58. The subscribers’ keys Ci are
distributed separately to the subscribers. Id. at 15:46–50, 16:26–29. The
encrypted pages and the encrypted messages Mi are transmitted to the user’s
receiver, which uses a stored subscribers’ key Ci to decrypt and extract the
operating key K from the encrypted messages Mi. Id. at 15:66–16:10,
20:34–21:12. After decrypting operating key K, the receiver station uses
this operating key K to decrypt the encrypted content. Id. at 10:41–66.
One embodiment of the method taught by Guillou is shown in
Figure 10, reproduced below.

Figure 10 illustrates an encryption system including decoding circuit 145,
generator 26’ that decodes octets, subscription card 106 that contains
memory 108, circuit 110 for restoring the key K from Mi and Ci, and
comparator 42. Ex. 1022, 20:9–13, 20:40–45. Decoder 145 initializes
generator 26’ to decode octets according to a specific process. Id. at 20:29–
33; see also 13:13–14:62 (describing process for decoding octets).
Comparator 42 distinguishes the octets belonging to columns 0 and 1, which
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are interpreted directly to form memory 146, and the octets of columns 2 to
7, which pass through the OR-exclusive gate 46, before being interpreted
and directed towards the memory 146. Id. at 20:13–17.
3. Analysis
i. Independent Claim 2
Petitioner contends the combined disclosure of Powell and Guillou, as
summarized above, taken together with the knowledge of a person of
ordinary skill in the art, teaches or suggests each limitation of independent
claim 2 of the ’749 patent. Pet. 45–59; Reply 2–21.
Petitioner argues that the “come on” advertising in Powell is “virtually
identical to the promotion and prompting disclosed in the ’749 patent,
wherein a cooking show is aired and the customer is prompted to receive
additional related material (the recipe) by entering a code.” Pet. 46–47.
According to Petitioner, such cross-promotion was widely known. Id.
(citing Ex. 1004 ¶ 83; Ex. 1016, 179–80; Ex. 1017, 373–75). Petitioner then
explains that the only limitation in the challenged claims not found in Powell
is the encrypting and decrypting of a second portion of programming.
Pet. 47. Petitioner, however, argues that (i) encryption and decryption
processes were well known in the 1970s, and (ii) Guillou teaches a method
for providing and receiving encrypted content in teletext and viewdata
systems, such as the Prestel system described in Powell. Id. at 48–49 (citing
Ex. 1022, 21:23–28; Ex. 1004 ¶ 86).
Petitioner also contends that a person of ordinary skill in the art would
have had reason to combine the teachings of Powell and Guillou, because
one of the problems encountered by those providing content through
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teletext/videotex systems is how to charge users for access to certain
information. Ex. 1022, 4:4–7. According to Petitioner, Guillou’s system is
intended to solve the problem of charging a user of a teletext system,
because Guillou teaches that promoted content may be encrypted thereby
providing access control and billing opportunity. Id. at 4:4–38. Petitioner
supports its position with the Declaration of Mr. Slinn, who testifies that a
person of skill in the art would have used the advertising method described
in Powell to promote related content for which the service provider would
charge a fee for access or for which access would be limited, in which case
the related content would be encrypted and decrypted using the techniques
described in Guillou. Ex. 1004 ¶ 98.
Patent Owner disagrees with Petitioner’s assertion that Powell and
Guillou teach or suggest the challenged claims for several reasons.
PO Resp. 19–51. First, Patent Owner argues that Petitioner’s challenge is
premised on an unrealistic combination of Powell and Guillou so that a
consumer would be charged a separate fee for viewing advertising. Id. at
26–29. According to Patent Owner, advertising has always been delivered
in a manner that is easy and free. Id. at 27. Patent Owner also argues that
the Prestel Viewdata system discussed in Powell “was a failure in the U.S.
and around the world because it was prohibitively expensive for consumers.”
Id. (citing Ex. 2037, 182–183). Patent Owner postulates that “Petitioners’
proposal for a Guillou-modified Prestel system where consumers would pay
a fee each time they viewed a commercial would have only hastened the
demise of Viewdata and, thus, would never have been taken seriously.” Id.
at 28–29.
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Second, Patent Owner argues that Petitioner does not undertake any
analysis regarding how one of ordinary skill in the art would have gone
about combining the elements, or what modifications one of ordinary skill in
the art necessarily would have made in order to combine the elements. Id. at
29–30. Patent Owner further argues that the redesign necessary to
implement Guillou’s system to operate with the Prestel Viewdata system
would require substantial modification, including replacement or
reconfiguration of many of the components described in the patent.
PO Resp. 31 (citing Ex. 2014 ¶ 95).
Patent Owner relies on the declaration of Dr. Weaver to support its
position. Dr. Weaver testifies that combining Powell with Guillou would
not have been simple substitutions as the two systems are different:
Guillou’s decryption method requires the use of teletext
magazine pages including an access control page with messages
Mi, teletext line numbers and teletext page numbers. There is no
direct equivalent for these three variables in the Viewdata
system. There is also no evidence of record that suggests Prestel
pages even included embedded page and line numbers. It would
not be possible to decrypt content under Guillou’s scheme
without embedded page and line numbers.
Ex. 2014 ¶ 94 (citation omitted); Ex. 1022, 7:65–8:4; 10:41–66; 18:60–
21:14. Patent Owner asserts that because the systems of Powell and Guillou
differ significantly (i.e., different transmission schemes, different hardware)
and lack compatibility, there would have been no motivation for a person of
ordinary skill in the art to combine Powell and Guillou. PO Resp. 31–38
(citing Ex. 2014 ¶¶ 91–93; Ex. 1022, 20:6–18).
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Third, Patent Owner argues that the combination of Powell and
Guillou fails to teach “decrypting [the] second portion of [the] mass medium
programming by using [the] at least one of a code and a datum in response to
[the] step of processing [the] reply” as recited by the challenged claim 2.
PO Resp. 38. According to Patent Owner, the “Page 2617” identified by a
receiver station in response to a user’s input would not be used at the
receiver station of Powell and Guillou to decrypt a Viewdata page. Id. at 40.
Patent Owner relies on the supporting testimony of Dr. Weaver, who
explains that the identification of “2617” in processing the user reply has a
single use at the receiver station: to operate as a request that identifies the
requested Viewdata page to the Prestel transmitting station. Ex. 2014 ¶ 101.
Patent Owner argues that this request identifier is distinct from the keys that
are used to decrypt a Viewdata page, because Guillou provides that its
receiver stations generate the decoding octets based on the operating key, as
well as the page and line numbers embedded in each transmitted teletext
page. PO Resp. 40 (citing Ex. 1022, 3:29–55, 22:61–66 (generating the
decoding octets using “the page numbers, the line numbers of the data
transmitted”)). Patent Owner then asserts that even if Guillou could have
been combined in a Prestel system, the decryption of a Prestel page would
have been dependent on the operating key K and the page and line numbers
embedded in a transmitted Viewdata page, not the user’s input of “2617.”
Id. at 40–41 (citing Ex. 2014 ¶ 101).
We disagree with Patent Owner’s contentions, because (1) we agree
with Petitioner’s explanation of why a person of ordinary skill in the art
would have combined the teachings of Powell and Guillou, and (2) we agree
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with Petitioner’s arguments regarding the collective teachings of Powell and
Guillou from the perspective of one of ordinary skill in the art. See KSR,
550 U.S. at 420 (“[F]amiliar items may have obvious uses beyond their
primary purpose, and in many cases a person of ordinary skill will be able to
fit the teachings of multiple patents together like pieces of a puzzle.”).
To the contrary, we agree with Petitioner’s contentions with respect to
claim 2 and adopt them as our own. We specifically credit the testimony of
Mr. Slinn that a skilled artisan would have looked to the teachings of
Guillou in combination with Powell in an attempt to solve the problem of
controlling access to content and providing billing opportunities for content
(even advertising content) accessible via a videotext system and address the
same problem–control and management of those communications. See
Ex. 1004 ¶ 100. We also are satisfied that Petitioner has shown that one of
skill in the art would have had the ability to apply the teachings of Guillou to
Powell, because Guillou specifically states that its methods are applicable to
the Prestel system discussed in Powell “without any difficulty for the man
skilled in the art.” Ex. 1022, 21:23–28. Such points weigh in favor of
finding that a person of ordinary skill in the art would have “fit the
teachings” of Guillou and Powell together to render the challenged claims
obvious. See KSR, 550 U.S. at 420 (“Under the correct analysis, any need or
problem known in the field of endeavor at the time of invention and
addressed by the patent can provide a reason for combining the elements in
the manner claimed.”).
Moreover, the test for obviousness is not whether the features of a
secondary reference may be bodily incorporated into the structure of the
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primary reference. In re Mouttet, 686 F.3d 1322, 1333 (Fed. Cir. 2012).
Rather, “the test for obviousness is what the combined teachings of the
references would have suggested to those having ordinary skill in the art.”
See id. (citing In re Keller, 642 F.2d 413, 425 (CCPA 1981)). Thus, Patent
Owner’s contentions regarding backward compatibility are not persuasive
and fail to show that a skilled artisan would have been discouraged from
combining the teachings of the cited references in the manner claimed.
Additionally, many of the arguments presented by Patent Owner
appear to attack the references individually, rather than in combination.
PO Resp. 26–37. Nonobviousness cannot be established by attacking the
references individually when a challenge is predicated upon a combination
of prior art disclosures. See In re Merck & Co., Inc., 800 F.2d 1091, 1097
(Fed. Cir. 1986). In attacking the references individually, Patent Owner both
fails to address Petitioner’s actual challenges and neglects to establish an
insufficiency in the combined teachings of the references, especially given
the knowledge of a skilled artisan as indicated by the disclosures found in
Exhibits 1015, 1019, 1020, and 1023 and explained by Mr. Slinn (Ex. 1004).
We agree that Petitioner has shown that the combination of Powell
and Guillou teach “decrypting [the] second portion of [the] mass medium
programming by using [the] at least one of a code and a datum in response to
[the] step of processing [the] reply,” as recited by the challenged claim 2.
Specifically, we are satisfied that the Viewdata page number (2617)
described in Powell constitutes a “code or datum” designating the second
portion of the mass medium programming. See PO Resp. 16–17 (construing
“designating” as to “indicate, name, or specify”), 40 (admitting that the page
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number “identifies” the requested Viewdata page); Reply 2. According to
Petitioner, a user inputs “2617” into a controller and then the receiver station
processes that reply and selects the code or datum (i.e., page number 2617),
which designates the second portion of the mass medium programming the
user wants. Tr. 89–90; see Ex. 1004 ¶ 93. Patent Owner appears to
acknowledge that the page number (2617) is used in Guillou’s decryption
process. Reply 2 (citing PO Resp. 40 (decryption depends on “the page and
line numbers embedded in a transmitted Viewdata page”), 41). Therefore,
we agree with Petitioner that Guillou discloses this limitation.
After consideration of the language recited in claim 2 of the ’749
patent, the Petition, the Patent Owner Response, and Petitioner’s Reply, as
well as the relevant evidence discussed in those papers, we conclude that one
of ordinary skill in the art would have considered this independent claim
obvious over Powell in view of Guillou.
ii. Dependent Claims 3 9, 10, and 13
Claims 3, 9, 10, and 13 depend from claim 2. Petitioner contends that
Powell and Guillou, as summarized above, taken together with the
knowledge of a person of ordinary skill in the art teaches or suggests aspects
of each dependent claim. Pet. 53–55, 59. We agree with Petitioner’s
contentions with respect to claims 3, 9, 10, and 13 and adopt them as our
own.
Patent Owner does not provide separate contentions regarding the
additional limitations recited in dependent claims 3, 9, 10, and 13. PO Resp.
41; see 37 C.F.R. § 42.23(a).
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After consideration of the language recited in claims 3, 9, 10, and 13
of the ’749 patent, the Petition, the Patent Owner Response, and Petitioner’s
Reply, as well as the relevant evidence discussed in those papers, we
conclude that one of ordinary skill in the art would have considered these
dependent claims obvious over Powell in view of Guillou.
iii. Dependent Claims 11 and 12
Claim 11 depends from claim 2 and further comprises the step of
“storing, at said storage device, an instruct signal which is effective to
process a subscriber reaction to a content of an information transmission
which includes said mass medium programming.” Ex. 1001, 288:61–67.
Claim 12 depends from claim 11 and further recites the step of “storing, at
said storage device, an instruct signal which is effective to establish
communications with a remote station.” Id. at 289:1–4.
Petitioner contends that the combined disclosure of Powell and
Guillou, as summarized above, taken together with the knowledge of a
person of ordinary skill in the art, teaches or suggests each limitation of
claims 11 and 12 of the ’749 patent. Pet. 54–55; Reply 3–6. Petitioner
specifically contends that nothing in the claim requires the instruct signal to
be “responsive” to the subscriber “input.” According to Petitioner, the claim
simply recites that the instruct signal is effective in any way to allow the
apparatus to process the subscriber’s reaction. Petitioner explains that a key
that is necessary for the decryption and display of the requested page
unquestionably constitutes a signal that is “effective to process” the
subscriber’s reaction, i.e., carry out the user’s request for the page, and that
is all that is required. Reply 4 (citing Ex. 1035 ¶ 93). Petitioner further
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contends that to the extent that the subscriber’s “reaction” is the inputting of
information at the input device, the signal that is sent from the input device
to the processor also constitutes an “instruct signal” that is effective to
process the subscriber’s reaction, i.e., a signal that enables the processor to
process the subscriber’s reaction and carry out the request for the page of
information. Id. at 4–5 (citing Ex. 1004, 71; Ex. 1035 ¶ 94). We agree with
Petitioner’s contentions with respect to claims 11 and 12 and adopt them as
our own.
Patent Owner disagrees with Petitioner, contending that in Powell the
user’s request for page 2617 from a receiving station cannot constitute an
instruct signal satisfying claim 11, as the user’s request is not “effective to
process a subscriber reaction to a content of an information.” PO Resp. 48
(citing Ex. 2014 ¶ 120). According to Patent Owner, the user’s request for
“page 2617” is the user’s reaction, and the user’s request cannot be
“effective to process” itself. Id. We disagree because even if the user’s
entry of “2617” is characterized as the user’s reaction, the signal carrying the
request for page 2617 is an instruct signal.
After consideration of the language recited in claims 11 and 12 of the
’749 patent, the Petition, the Patent Owner Response, and Petitioner’s Reply,
as well as the relevant evidence discussed in those papers, we find that one
of ordinary skill in the art would have considered these dependent claims
obvious over Powell in view of Guillou, because the signal carrying the
request for page 2617 is an “instruct signal” and it is “stored.” See Ex. 1004,
71.
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iv. Independent Claim 18 and Dependent Claim 24
Petitioner contends that the combined disclosure of Powell and
Guillou, as summarized above, taken together with the knowledge of a
person of ordinary skill in the art, teaches or suggests each limitation of
claim 18 and claim 24, which depends from claim 18, of the ’749 patent.
Pet. 54–55; Reply 6–9.
Patent Owner contends that Guillou does not teach or suggest
“passing a signal word to said processor in response to said step of
processing said reply” and “decrypting said data by using information
included in said signal word” as required by claim 18. PO Resp. 43. Patent
Owner argues that the Guillou system does not disclose or suggest passing a
signal word to the processor at a receiver station in response to the
processing of a reply from a subscriber. Id. (citing Ex. 2014 ¶ 109).
According to Patent Owner, the operating key in Guillou is generated
automatically and at random every five minutes at the emitting station and is
not responsive to any input received from a subscriber. Id. Patent Owner
asserts that the operating key of Guillou is unknown to the subscriber at the
receiving station and that a person of ordinary skill in the art would
recognize that Guillou’s receiving station decrypts when it receives the
signal(s), not in response to processing a user reply. Id. (citing Ex. 2014
¶ 110).
Contrary to Patent Owner’s arguments, we find that one of ordinary
skill in the art would have considered claims 18 and 24 obvious over Powell
in view of Guillou, because the embedded page and line numbers constitute
“signal words” that are passed to a processor “in response to said step of
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processing said reply” (i.e., in response to processing the user’s request for a
page) and the data is decrypted using that information. See Ex. 2014 ¶ 101;
Ex. 1004 ¶ 94; Ex. 1035 ¶ 85. After consideration of the language recited in
claims 18 and 24 of the ’749 patent, the Petition, the Patent Owner
Response, and Petitioner’s Reply, as well as the relevant evidence discussed
in those papers, we agree with Petitioner’s contentions with respect to claims
18 and 24 and adopt them as our own, because we find that Petitioner’s
contentions are supported by the evidence of record.
v. Independent Claim 49 and Dependent Claims 52
and 53
Petitioner contends that the combined disclosure of Powell and
Guillou, as summarized above, taken together with the knowledge of a
person of ordinary skill in the art, teaches or suggests each limitation of
claims 49, 52, and 53 of the ’749 patent. Pet. 56–59; Reply 9–12. Petitioner
specifically contends that a control signal (e.g., message Mi) is received in a
“first information transmission.” Reply 9. According to Petitioner, in the
teletext embodiment, Guillou teaches that the access control page is sent
cyclically, and Message Mi is passed to the processor and stored. Id. (citing
Ex. 1022, 8:63–65, 20:40–49; Ex. 1035 ¶ 87). Mi is not updated every cycle,
but typically is stored until a new Mi is obtained. Id. (citing Ex. 1035 ¶ 87).
Thus, Petitioner argues that Mi would be received in the “first information
transmission” (the first cycle of the wheel), and the encrypted page may be
received during a subsequent cycle of the wheel (a second information
transmission). Id. (citing Ex. 1004 ¶ 96).
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Patent Owner argues that Powell, in view of Guillou, fails to teach or
suggest the steps of sending an access control page in a first information
transmission that is separate from the second information transmission with
the encrypted content as required by claim 49. PO Resp. 46 (citing Ex. 2014
¶ 114), 50–51 (arguing about limitations in claim 52). Rather, according to
Patent Owner, the access control page is sent in the same information
transmission as the encrypted pages. Id. Patent Owner further contests
Petitioner’s position, arguing there would be no motivation to send the
access control page before the user even requests access to an encrypted
page and that providing the key to access a page prior to any request by the
user to “go to Page 2617” would contradict Petitioner’s expressed
motivation for combining Guillou with Powell in order to “provide for
access control and billing” and for “security.” PO Resp. 47. We do not
agree.
We find that one of ordinary skill in the art would have considered
these claims obvious over Powell in view of Guillou, because we are
persuaded that the control signal (message Mi) of Guillou is received in a
first information transmission and used to decrypt material received in a
second information transmission. See Ex. 1004 ¶ 96; Ex. 1035 ¶ 87. After
consideration of the language recited in claims 49, 52, and 53 of the ’749
patent, the Petition, the Patent Owner Response, and Petitioner’s Reply, as
well as the relevant evidence discussed in those papers, we agree with
Petitioner’s contentions with respect to claims 49, 52, and 53 and adopt them
as our own.
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vi. Secondary Considerations of Non-Obviousness
Factual inquiries for an obviousness determination include secondary
considerations based on evaluation and crediting of objective evidence of
nonobviousness. See Graham, 383 U.S. at 17. Notwithstanding what the
teachings of the prior art would have suggested to one of ordinary skill in the
art at the time of the invention, the totality of the evidence submitted,
including objective evidence of nonobviousness, may lead to a conclusion
that the challenged claims would not have been obvious to one of ordinary
skill in the art. In re Piasecki, 745 F.2d 1468, 1471–72 (Fed. Cir. 1984).
Secondary considerations may include any of the following: long-felt but
unsolved needs, failure of others, unexpected results, commercial success,
copying, licensing, and praise. See Graham, 383 U.S. at 17; Leapfrog
Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007).
To be relevant, evidence of nonobviousness must be reasonably
commensurate in scope with the claimed invention. In re Kao, 639 F.3d
1057, 1068 (Fed. Cir. 2011) (citing In re Tiffin, 448 F.2d 791, 792 (CCPA
1971)); In re Hiniker Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998). In a related
requirement, in order to be accorded substantial weight, there must be a
nexus between the merits of the claimed invention and the evidence of
secondary considerations. In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir.
1995). “Nexus” is a legally and factually sufficient connection between the
objective evidence and the claimed invention, such that the objective
evidence should be considered in determining nonobviousness. Demaco
Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir.
1988). The burden of showing that there is a nexus lies with the patent
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owner. Id.; see In re Paulsen, 30 F.3d 1475, 1482 (Fed. Cir. 1994). Here,
Patent Owner argues that commercial success, licensing, long-felt but
unresolved need, and industry praise indicates that the claims would not
have been obvious to a person of ordinary skill in the art. PO Resp. 51–56.
(1) Commercial Success: Licensing
Patent Owner argues that its licensing program demonstrates
commercial success, which establishes that the claims are not obvious. PO
Resp. 51–52. Patent Owner asserts that “[t]he ’749 Patent along with other
patents issued to the inventors have had tremendous licensing success.” Id.
at 52 (citing Ex. 2018) (describing license agreements). Patent Owner
further asserts that “[t]hese patents have been licensed in agreements
providing payments exceeding $350M and involving more than a dozen
licensees.” Id. Patent Owner states that “[Patent Owner] has licensed the
’749 Patent to numerous industry leaders, including Cisco, Sony, DirectTV,
Motorola, Scientific-Atlanta LLC, Pegasus, DISH Network Corporation, and
The Weather Channel.” Id.
We are not persuaded. In cases in which the proffered evidence of
commercial success is licenses, rather than sales of products embodying the
invention, there is a danger that the licenses may have been taken only
because they were a less costly alternative to defending an infringement suit.
See EWP Corp. v. Reliance Universal Inc., 755 F.2d 898, 908 (Fed. Cir.
1985). In such situations, nexus between the commercial success and the
patent cannot be inferred; rather, “affirmative evidence of nexus” is
required. Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1324
(Fed. Cir. 2004). In other words, a patent owner must demonstrate “a nexus
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between the merits of the invention and the licenses of record”; otherwise the
licenses are to be accorded little weight. In re GPAC Inc., 57 F.3d at 1580
(emphasis added) (citation omitted). Moreover, our reviewing court has
held that “without a showing of [a] nexus, ‘the mere existence of . . . licenses
is insufficient to overcome the conclusion of obviousness.’” In re Antor
Media Corp., 689 F.3d 1282, 1293 (Fed. Cir. 2012) (quoting Iron Grip
Barbell, 392 F.3d at 1324).
Like the applicant in Antor Media, Patent Owner has done little more
than cite to the declaration of Mr. Gerald Holtzman, which lists licenses and
their respective sales revenue. See PO Resp. 52 (citing Ex. 2018). The cited
testimony of Mr. Holtzman only details the revenues for each license and
does not establish whether the licensing program was successful because of
the merits of the claimed invention, the merits of other patented inventions,
or for other economic reasons, such as to avoid litigation or because of prior
business relationships. See Ex. 2018 ¶¶ 8–27; see also Antor Media, 689
F.3d at 1294 (affirming Board’s finding that evidence of existence of
licenses was insufficient to overcome prima facie case of obviousness). We
find that the evidence provided by Patent Owner does not establish a
sufficient link between the merits of the invention claimed in the ’749 patent
and the taking of the licenses. Although Mr. Holtzman notes that some of
the provided licenses were taken in situations where there was pending
litigation against the licensee (Ex. 2018 ¶ 14), he does not address whether
litigation had been threatened against other licensing parties. Furthermore,
evidence of $350M in licensing revenue alone is not enough to show
commercial success, because Patent Owner must relate that figure to the
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overall market. In re Baxter Travenol Labs, 952 F.2d 388, 392 (Fed. Cir.
1991) (“Information solely on numbers of units sold is insufficient to
establish commercial success.”); see also In re Huang, 100 F.3d at 140
(“Declining to find evidence of commercial success because ‘[a]though [the
inventor’s] affidavit certainly indicates that many units have been sold, it
provides no indication of whether this represents a substantial quantity in
this market.’”). We, therefore, cannot determine whether the licenses reflect
the commercial value of the invention claimed in the ’749 patent, or whether
they were taken merely to avoid the cost of litigation, either pending or
threatened. Absent a persuasive showing of nexus, Patent Owner’s evidence
of licensing fails to establish commercial success. Accordingly, we give
little weight to Patent Owner’s argument that its licensing program is
evidence that the claims are not obvious.
(2) Industry Praise
Patent Owner argues that the ’749 patent has generated industry
praise, because a third party (Ocean Tomo, LLC) conducted a study and
evaluated the “value” of certain patents. PO Resp. 53. According to Patent
Owner:
As part of this study, the firm assessed the value of each patent
using a number of different value factors to determine a
PatentRatings IPQ score that objectively rated each patent.
Approximately 220,000 issued patents were analyzed to
determine a PatentRatings IPQ score, with the median of the
scores being 100. According to the study, the top rated inventor
with 16 patents in the wireless field was John Harvey, inventor of
the ’749 Patent. The firm found that the patents, all members of
the ’749 Patent family, had an average PatentRating IPQ score of
235.7, placing them in the top 0.1% of the approximate 220,000
active U.S. utility patents granted in 2010.
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Id. (citing Ex. 2032).
Patent Owner further argues that citation of a patent by other patent
holders in their patent filings (i.e., “forward citations”) is a measure of
recognition and value. Id. at 54 (citing Ex. 2033; Ex. 2034; Ex. 2035).
According to Patent Owner, “[m]embers of the ’749 Patent family have been
cited by several hundred U.S. and foreign patents. This recognition by
others is strong objective indicia of the significance of the patent that weighs
against obviousness.” Id. at 54–55.
Industry praise for an invention may provide evidence of
nonobviousness where the industry praise is linked to the claimed invention.
See Geo. M. Martin Co. v. Alliance Mach. Sys. Intern. LLC, 618 F.3d 1294,
1305 (Fed. Cir. 2010); Asyst Tech’n., Inc. v. Emtrak, Inc., 544 F.3d 1310,
1316 (Fed. Cir. 2008). Patent Owner does not provide any analysis
explaining how the cited study (Ex. 2032) or the “forward citations” praise
the invention recited in the challenged claims. Accordingly, in this case,
Patent Owner has not established a sufficient nexus between the merits of
the claimed invention of the challenged claims and the alleged industry
praise.
(3) Long-Felt but Unsolved Need
Patent Owner argues that “[t]he inventors of the ’749 Patent
recognized that there was a long-felt need to provide a communications
system with expanded capabilities, while overcoming inherent limitations of
existing teletext systems and related systems.” PO Resp. 55. Patent Owner
also describes the differences between the prior system and the “Harvey
inventions.” Id. at 55–56.
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We are not persuaded. Patent Owner must show that any evidence of
long-felt need “demonstrates both that a demand existed for the patented
invention, and that others tried but failed to satisfy that demand.” In re
Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig.,
676 F.3d 1063, 1082 (Fed. Cir. 2012). Patent Owner’s argument is lacking
as to both elements. That is, Patent Owner offers no evidence that others
tried and failed.
Accordingly, we give little weight to Patent Owner’s argument that
there was a long-felt but unmet need that overcomes Petitioner’s showing of
obviousness in this case.
(4) Summary of Analysis of Secondary
Considerations of Non-Obviousness
Patent Owner failed to demonstrate a sufficient nexus between the
claimed invention and any commercial success or industry praise. Patent
Owner also failed to demonstrate a long-felt but unmet need for the claimed
invention. We, thus, find that the evidence of objective indicia of
nonobviousness is insufficient to overcome the evidence of obviousness over
Powell and Guillou
vii. Conclusion
For the foregoing reasons, Petitioner has proven by a preponderance
of the evidence that Powell and Guillou teach all elements of challenged
claims 2, 3, 9–13, 18, 24, 49, 52, and 53 of the ’749 patent, and that a person
of ordinary skill in the art would have had reason to combine the disclosures.
Furthermore, we conclude that such a combination would have been within
the level of ordinary skill in the art, as evidenced by the prior art of record.
We, therefore, conclude that claims 2, 3, 9–13, 18, 24, 49, 52, and 53 would
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have been obvious at the time of the invention, and thus, are unpatentable
under 35 U.S.C. § 103.
III. MOTION TO AMEND
Patent Owner filed a contingent Motion to Amend in order to replace
the unpatentable claims with proposed substitute claims 56–67. Paper 26
(“Mot.”). Petitioner opposes Patent Owner’s Motion. Paper 39 (“Opp.”).
Because we find claims 2, 3, 9–13, 18, 24, 49, 52, and 53 unpatentable, we
address Patent Owner’s Motion to Amend. As discussed below, we
determine that Patent Owner has not carried its burden of demonstrating the
patentability of any of the proposed claims.
A. Analysis of the 37 C.F.R. § 42.121 Requirements
In an inter partes review, amended claims are not added to a patent as
of right, but rather must be proposed as a part of a Motion to Amend.
35 U.S.C. § 316(d). As the moving party, Patent Owner bears the burden of
proof in establishing that it is entitled to add proposed substitute claims 56–
67. 37 C.F.R. § 42.20(c); see Idle Free Sys., Inc. v. Bergstrom, Inc., Case
IPR2012-00027, slip op. at 7 (PTAB June 11, 2013) (Paper 26)
(representative). As part of this showing, Patent Owner must demonstrate
(1) the amendment responds to a ground of unpatentability involved in the
trial; (2) the amendment does not seek to enlarge the scope of the claims of
the patent or introduce new subject matter; (3) the amendment proposes a
reasonable number of substitute claims; and (4) the proposed claims are
supported in the original disclosure. 37 C.F.R. § 42.121.
We determine that Patent Owner has satisfied the burden with respect
to the above-discussed requirements of 37 C.F.R. § 42.121. For example,
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Patent Owner seeks to add twelve (12) substitute claims to replace the
twelve (12) claims found unpatentable, and each substitute claim adds
limitations that purport to narrow the scope of the original claim it replaces.
See Ex. 2028. Patent Owner also identifies exemplary promotion and
delivery of mass medium programming using first and second
communication channels disclosed in the originally-filed application that fall
within the scope of proposed substitute claims 56–67. Mot. 2–9 (citing Ex.
2023, 38:16–19, 40:12–32; Ex. 2024, 295:6–13, 469:35–472:17, 476:34–
477:23). Patent Owner further identifies support in the original specification
for the step in substitute claim 65 of processing the message to cause the
receiver station to connect to a second communication channel, the second
communication channel different from the first communication channel, for
receiving information transmitted from a second remote site. Mot. 8–9
(citing Ex. 2023, 38:17–19, 40:26–32, 40:12–31; Ex. 2024, 36:31–37:3,
295:6–8, 469:35–472:17, 476:34–477:23, 521:8–21); Ex. 2014 ¶ 161.
We note that further support for substitute claims 65–67 can be found
in the original specification’s discussion of preprogramming of information
at a second and third microcomputer (Ex. 2024, 469), which can then be
automatically accessed and sent based upon a first communication from a
user (id. at 474). The specification indicates that using information from a
different location has the advantage of being relatively invulnerable to
programming pirates because the location of the instruction is harder to
identify without causing meter information to be transmitted to a remote
metering station. Id. at 477. We, thus, are persuaded that there is written
description support for Patent Owner’s proposed substitute claims.
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Accordingly, we now focus on whether Patent Owner has met its burden of
proof to show that proposed substitute claims 56–67 are patentable over the
prior art of record.
B. Analysis of the Patentable Distinction of Proposed Claims Over
the Prior Art
In moving to amend their claims, Patent Owner has the burden to
“show patentable distinction over the prior art of record and also [the] prior
art known to the patent owner.” Idle Free Sys., Inc. v. Bergstrom, Inc., Case
IPR2012-00027, slip op. at 7 (PTAB June 11, 2013) (Paper 26)
(representative). The “prior art known to the patent owner” “should be
understood as no more than the material prior art that Patent Owner makes
of record in the current proceeding pursuant to its duty of candor and good
faith to the Office under 37 C.F.R. § 42.11, in light of [the] Motion to
Amend,” and this includes, among other things, “any material art in the
prosecution history of the patent,” “any material art of record in the current
proceeding, including art asserted in grounds on which the Board did not
institute review,” and “any material art of record in any other proceeding
before the Office involving the patent.” MasterImage 3D, Inc. v. RealD
Inc., Case IPR2015-00040, slip op. at 2–3 (PTAB July 15, 2015) (Paper 42)
(representative).
If Patent Owner sets forth a prima facie case of patentability of
narrower substitute claims over the prior art of record, the burden of
production shifts to Petitioner. In its opposition, Petitioner may explain why
Patent Owner did not make out a prima facie case of patentability, or attempt
to rebut that prima facie case, by addressing Patent Owner’s evidence and
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arguments and/or by identifying and applying additional prior art against
proposed substitute claims. Patent Owner has an opportunity to respond in
its reply. The ultimate burden of persuasion remains with Patent Owner, the
movant, to demonstrate the patentability of the amended claims. Id. at 4
(citing Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1306 (Fed. Cir.
2015)); see also Nike, Inc. v. Adidas AG, No. 2014-1719, slip op. at 11 (Fed.
Cir. Feb. 11, 2016) (stating “as we held in Proxyconn, the Board permissibly
interpreted [37 C.F.R. § 42.20(c)] as imposing the burden of proving
patentability of a proposed substitute claim on the movant: the patent
owner.”).
1. Analysis of Proposed Substitute Claim 56–62
As a replacement for independent claim 2, Patent Owner proposes
claim 56. Mot. 1; Ex. 2028, 1–2. Proposed independent claim 56 is
identical to claim 2 but for the addition of four new limitations: (1)
receiving a first portion of said mass medium programming in a first
programming signal over a first communication channel, (2) receiving a
message over said first communication channel, responsive to said reply; (3)
processing said message to cause said interactive video viewing apparatus to
connect to a second communication channel, said second communication
channel different from said first communication channel, for receiving
encrypted digital programming; and (4) receiving said second portion of said
mass medium programming in a second programming signal over said
second communication channel, said second portion including said digital
programming. Ex. 2028, 1–2. Proposed dependent claims 57–62 depend
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from proposed independent claim 56 and do not have any new limitations.
Id. at 2–4.
Patent Owners argue that no prior art anticipates the proposed claim
56 and that “not a single piece of prior art” renders the claim obvious. Mot.
11–12. Patent Owner specifically argues that no single piece of prior art
discloses the steps of receiving a message on a first communication channel
and causing a viewing apparatus to connect to a second communication
channel, wherein the second communication channel is different from the
first communication channel. Id. at 12. Patent Owner lists several prior art
references and details why each reference, taken individually, would not
render the proposed claim obvious. Id. at 13–20.
Patent Owner then argues that although
the concept of tuning television channels was well known, it
was not obvious to a person of ordinary skill in the art to design
a remote source that could transmit messages to a receiver
station on a first communication channel that, when processed
by the receiver station, causes the receiver station to connect
[to] a communication channel different from the first channel to
receive encrypted programming or data.
Id. at 20–21. Patent Owner further argues that there was no motivation to
combine references, because: (1) it was not common practice in 1981 to
remotely control a receiver station to connect to a different communication
channel; (2) with many of the systems known at the time, including
traditional broadcast television, radio, and even Viewdata, teletext and
variations thereof, there was no incentive at the time to control a receiver
station to connect to a different communication channel, as this would
disrupt the connection between the central station and receiver stations; (3)
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automating a process in which a receiver station connects to a different
channel in response to processing a received message to receive encrypted
digital programming or data would also have been difficult and nontrivial;
and (4) analog TV systems, such as found in Campbell and Block, could not
be modified into a digital cable system in 1981. Mot. 20–23; PO Reply to
Opp. 11 (citing Ex. 2069, 100:18–101:20).
Patent Owner argues there was no general motivation that would have
led to the proposed claim; however, Patent Owner does not address any
combination of prior art references or explain why a person of ordinary skill
in the art would not have combined certain references. Petitioner, on the
other hand, proposes several combinations of prior art references that,
together, disclose the elements of proposed claim 56. Petitioner specifically
argues that each of the new limitations of proposed claim 56 were well-
known in 1981 and are taught by the combination of (1) Campbell and
Furukawa and (2) Block and Furukawa. Opp. 10–11 (citing Ex. 2052;
WO81/02961; Exs. 2031, 2031); Ex. 1035 ¶ 121. According to Petitioner,
Patent Owner and its expert admit that Campbell discloses receiving a signal
that causes a viewer’s receiver to change channels and that Furukawa
describes a television system in which a signal is received from a central
facility that causes the television to tune to a different channel. Opp. 11
(citing Mot. 13, 15; Ex. 1038, 133:4–18, 137:11–24). Petitioner, thus,
asserts that at least Campbell and Furukawa teach all the limitations of the
proposed claim 56 and Patent Owner failed to make out a prima facie case of
patentability over combinations of the prior art of record. Id.
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We agree with Petitioner’s position. Particularly, we credit the
testimony of Petitioner’s witness, Mr. Anthony J. Wechselberger, who
explains that Campbell, Block, and Furukawa teach “force” or “automatic”
tuning of a receiver, i.e., “sending a signal that forces a receiver to tune to a
particular channel” and that such technology was well-known in 1981.
Ex. 1035 ¶¶ 122–125. Patent Owner and Patent Owner’s expert, Dr.
Weaver, also acknowledged that Furukawa teaches that a television system
in which a signal is received from a central facility that causes the television
to tune to a different channel. Mot. 15 (stating that “Furukawa describes the
operation of a spot channel wherein a television set receiving any channel
may be forced by a central facility to receive a spot channel”); PO Reply to
Opp. 3 (discussing prior art “disclosure of the ‘automatic channel tuning’
feature which [Patent Owner] has already acknowledged in Furukawa”); Ex.
1038, 137:11–24, 140:16–21, 145:1–11. Patent Owner’s witness testified
that “[a] person of ordinary skill in the art before 1981 would have known
that you could send a signal to a properly equipped and responsive television
and make it change channels.” Ex. 1038, 136:19–24. Additionally, other
references (i.e., Hartung and Cogswell) that disclose “automatic channel
tuning” are cited in the prosecution history of the ’749 patent. PO Reply to
Opp. 3 (citing Exs. 1045, 1046). According to Patent Owner, these
references describe “the state of the art.” Id. Thus, we are satisfied that
“automatic channel tuning,” as taught by Campbell, Block, and Furukawa,
was known to a person of ordinary skill in the art at the time of the invention
of the ’749 patent.
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Although Patent Owner argues that applying such “automatic channel
tuning” to digital television systems (rather than using analog television
systems) would have been difficult and that one of ordinary skill in the art
would not have been motivated to use such technology to change channels
and to send encrypted digital data (Mot. 20–23; PO Reply to Opp. 10–11),
we are not persuaded given the state of the art as shown by Guillou,
discussed in detail previously. Guillou discloses the decryption of digital
data (Ex. 2014 ¶ 85) and explains that such technology “could be applied to
other systems without difficulty for the man skilled in the art, and notably to
the CEEFAX or ORACLE systems or the VIEWDATA or PRESTEL
systems” (Ex. 1022, 21:23–28). The Ceefax, Oracle, Viewdata, and Prestel
systems are analog systems that send signals over television channels or
telephone lines. Therefore, we are satisfied that a person of skill in the art
would have had reason to use “automatic channel tuning” and apply digital
encryption technology in order to “transmit messages to a receiver station on
a first communication channel that, when processed by the receiver station,
causes the receiver station to connect [to] a communication channel different
from the first channel to receive encrypted programming or data.”
Accordingly, we find that Patent Owner has not demonstrated the
patentability of proposed substitute claims 56–62.
2. Analysis of Proposed Substitute Claim 63–64
As a replacement for independent claim 18, Patent Owner proposes
claim 63. Mot. 1; Ex. 2028, 4–5. Proposed independent claim 63 is
identical to claim 18 but for the addition of four new limitations: (1)
receiving mass medium programming in a first programming signal over a
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first communication channel, (2) receiving a message over said first
communication channel, responsive to said reply; (3) processing said
message to cause said interactive mass medium programming output
apparatus to connect to a second communication channel, said second
communication channel different from said first communication channel, for
receiving encrypted digital programming; and (4) receiving a second
programming signal including said data in encrypted form over said second
communication channel. Ex. 2028, 4–5. Proposed dependent claim 64
depends from proposed independent claim 63 and does not have any new
limitations. Id. at 6.
Patent Owner and Petitioner proffer the same arguments and evidence
for proposed claims 63 and 64 as they did for proposed claims 56–62. Mot.
11–23; Opp. 8–14, 16–25; PO Reply to Opp. 8–11. Accordingly, we find
that Patent Owner has not demonstrated the patentability of proposed
substitute claims 63 and 64.
3. Analysis of Proposed Substitute Claim 65–67
As a replacement for independent claim 49, Patent Owner proposes
claim 65. Mot. 1; Ex. 2028, 6–7. Proposed independent claim 65 is
identical to claim 49 but for the addition of three new limitations: (1)
receiving a message received over a first communication channel from a first
remote site, responsive to said subscriber reply, (2) processing said message
to cause said receiver station to connect to a second communication channel,
said second communication channel different from said first communication
channel, for receiving information transmitted from a second remote site;
and (3) receiving a second information transmission including said
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additional material in encrypted form over said second communication
channel. Ex. 2028, 6–7. Proposed dependent claims 66 and 67 depend from
proposed independent claim 65 and do not have any new limitations. Id. at
8.
Patent Owner and Petitioner proffer many of the same arguments and
evidence for proposed claims 63 and 64 as they did for proposed claims 56–
62. Mot. 11–23; Opp. 8–14, 16–25; PO Reply to Opp. 8–11. Patent Owner
further argues that some of the prior art cited by Petitioner (i.e., Hartung and
Campbell) fail to disclose “receiving information from a second remote
site.” PO Reply to Opp. 11–12. We are not persuaded by Patent Owner.
Rather, we credit the testimony of Petitioner’s witness, Mr. Wechselberger,
who explains that Campbell does teach this limitation:
WO ’961 discloses sending commands to set top boxes to cause
them to be auto-tuned to a special channel upon an emergency.
The signal, emergency alert word, is received from a first remote
site, i.e., the PCS 50. This signal causes the receiver to switch to
a different channel to broadcast the alert messages and signals.
Ex. 1033 at 21:22–22:2; Ex. 1006 at 14:29–50; Ex. 1007 at
19:18–20:4. The content of the programming on the second
channel would come, at least indirectly, from a different remote
site, “to address selected groups such as city officials, police,
firemen, national guard and so forth.” Ex. 1033 at 18:36–19:5;
Ex. 1006 at 12:50–57; Ex. 1007 at 16:13–19.
Ex. 1035 ¶ 137. Accordingly, we find that Patent Owner has not
demonstrated the patentability of proposed substitute claims 65–67.
4. Secondary Considerations of Non-Obviousness
Patent Owner does not argue that objective indicia of nonobviousness
support the patentability of proposed substitute claims 56–67. Factual
inquiries for an obviousness determination, however, include secondary
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considerations based on evaluation and crediting of objective evidence of
nonobviousness. See Graham, 383 U.S. at 17. Therefore, we have reviewed
whether Patent Owner’s arguments regarding commercial success, licensing,
long-felt but unresolved need, and industry praise in connection with the
challenged claims indicate that proposed substitute claims 56–67 would not
have been obvious to a person of ordinary skill in the art. For the same
reason as discussed previously in Section II. D.3.vii., we find that the
evidence of objective indicia of nonobviousness is insufficient to overcome
the evidence of obviousness as presented by Petitioner. See generally Opp.
8–12, 16–25.
Therefore, Patent Owner has not demonstrated the patentability of
proposed substitute claims 56–67. Accordingly, Patent Owner’s Motion to
Amend is denied.
C. Analysis of the Patentable Subject Matter
We have determined that Patent Owner has not demonstrated the
patentability of proposed substitute claims 56–67 in view of the prior art and
the knowledge of one of ordinary skill in the art at the time of invention.
Accordingly, we need not reach a decision regarding whether proposed
substitute claims 56–67 encompass patentable subject matter under
35 U.S.C. § 101.
IV. CONCLUSION
For the foregoing reasons, we conclude Petitioner has shown by a
preponderance of the evidence that claims 2, 3, 9–13, 18, 24, 49, 52, and 53
of the ’749 patent would have been obvious in view of Powell and Guillou.
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In addition, we conclude Patent Owner has not demonstrated, by a
preponderance of the evidence, the patentability of proposed substitute
claims 56–67.
V. ORDER
For the reasons given, it is
ORDERED that, by a preponderance of the evidence, claims 2, 3, 9–
13, 18, 24, 49, 52, and 53 of the ’749 patent are unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Amend is
denied; and
FURTHER ORDERED that because this is a Final Written Decision,
parties to the proceeding seeking judicial review of the decision must
comply with the notice and service requirements of 37 C.F.R. § 90.2.

PETITIONER:

Brenton R. Babcock
Colin B. Heideman
Kent N. Shum
KNOBBE, MARTENS, OLSON & BEAR, LLP
2brb@knobbe.com
2cbh@Knobbe.com
2kns@knobbe.com
BoxAmazon3@knobbe.com

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PATENT OWNER:

Stephen T. Schreiner
Phong Dinh
GOODWIN PROCTER LLP
SSchreiner@goodwinprocter.com
PDinh@goodwinprocter.com

Thomas J. Scott, Jr., Vice President & General Counsel
PERSONALIZED MEDIA COMMUNICATIONS, LLC
tscott@pmcip.com