Uniloc 2017 LLC

Patent Trials and Appeals Board

Dec 15, 2020

IPR2019-01252 (P.T.A.B. Dec. 15, 2020)

Trials@uspto.gov Paper 19
571-272-7822 Entered: December 15, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________

MICROSOFT CORPORATION,
Petitioner,

v.

UNILOC 2017 LLC,
Patent Owner.
____________

IPR2019-01252
Patent 7,024,696 B1
_______________

Before ROBERT J. WEINSCHENK, JOHN D. HAMANN, and
JULIET MITCHELL DIRBA, Administrative Patent Judges.

WEINSCHENK, Administrative Patent Judge.

JUDGMENT
Final Written Decision
Determining All Challenged Claims Unpatentable
35 U.S.C. § 318(a)
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I. INTRODUCTION
A. Background and Summary
Microsoft Corporation (“Petitioner”) filed a Petition (Paper 2, “Pet.”)
requesting an inter partes review of claims 1, 3, 4, 9, 15, 20, 24, 25, 27, 30,
31, 36, and 37 (“the challenged claims”) of U.S. Patent No. 7,024,696 B1
(Ex. 1001, “the ’696 patent”). Uniloc 2017 LLC (“Patent Owner”) filed a
Preliminary Response (Paper 6, “Prelim. Resp.”) to the Petition. We
instituted an inter partes review of the challenged claims on December 20,
2019. Paper 7 (“Dec. on Inst.”), 23. After institution, Patent Owner filed a
Response (Paper 9, “PO Resp.”) to the Petition, Petitioner filed a Reply
(Paper 10, “Pet. Reply”) to the Response, and Patent Owner filed a Sur-reply
(Paper 11, “PO Sur-reply”) to the Reply. We held an oral hearing on
September 17, 2020, and a transcript of the hearing is included in the record.
Paper 18 (“Tr.”).
For the reasons set forth below, Petitioner has shown by a
preponderance of the evidence that claims 1, 3, 4, 9, 15, 20, 24, 25, 27, 30,
31, 36, and 37 of the ’696 patent are unpatentable.
B. Real Parties in Interest
The parties identify themselves as the real parties in interest. Pet. 67;
Paper 3, 1.
C. Related Matters
The parties indicate that the ’696 patent is the subject of the following
district court case: Uniloc 2017 LLC v. Microsoft Corp., No. 8:18-cv-02054
(C.D. Cal.). Pet. 67; Paper 3, 2. Petitioner indicates that the ’696 patent
previously was the subject of several other district court cases, as well as
IPR2017-00301. Pet. 67–69. In addition, U.S. Patent No. 8,613,110 B2
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(Ex. 1004, “the ’110 patent”), which claims priority to the ’696 patent, is the
subject of IPR2019-01251.
D. The ’696 Patent
The ’696 patent relates to “preventing piracy of a given software
application over a communications network.” Ex. 1001, 2:3–7. According
to the ’696 patent, when a user installs a software application and attempts to
access it, the software informs the user that online activation is required. Id.
at 8:8–13. To activate the software, the user connects to a remote service
system that requests user data from the user. Id. at 8:14–19. The user data
may include an identification code, “which is a program code sequence
comprised of alphanumeric characters, that would serve to identify each
individual software application.” Id. at 3:53–4:1. The remote service
system uses the requested user data to determine whether the user is a
pirator. Id. at 8:33–35. For example, “[m]ultiple online activation attempts
of the same software . . . , regardless if such attempts are by distinct or the
same users, would naturally indicate that the software . . . was pirated.” Id.
at 4:65–5:1. If the remote service system determines that the user is not a
pirator, the remote service system transmits service data to the user (id. at
8:35–39), which may include an activation code that will activate the
software application for the user (id. at 5:15–18, 5:29–32). If, however, the
remote service system determines that the user is a pirator, the remote
service system may blacklist the specific software, as referenced by its
identification code, thereby prohibiting it “from receiving any future
activation codes.” Id. at 5:1–9.
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E. Illustrative Claim
Of the challenged claims, claims 1, 15, 24, 30, and 36 are
independent. Claim 1 is reproduced below.
1. A method of preventing piracy of a given software
application comprising the steps of:
assigning a unique identification code to each authentic
copy of such software application;
installing the software application in a data storage
element on a user’s computer;
configuring the software application to require service
data to activate at least part of its functionality;
requiring the user to communicate user data over a
communications network to a remote service provider, the user
data being derived, at least in part, from the unique
identification code;
examining received user data to derive the unique
identification code associated with the copy of the software
application installed by said user
counting the number of times an attempt has been made
to obtain said service data in order to activate at least part of the
functionality of said software application assigned to such
unique identification code; and
selectively transmitting service data to the user’s
computer when said remote service provider determines that the
number of times an attempt has been made to obtain said
service data in order to activate at least part of the functionality
of said software application assigned to such unique
identification code is fewer than a predetermined threshold, said
user’s computer being connected to said communications
network and designated to storably receive said service data.
Ex. 1001, 9:2–29.
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F. Evidence
Petitioner submits the following evidence:
Evidence Exhibit No.
Declaration of Dr. Jennifer Golbeck (“Golbeck
Declaration”) 1003
Schoch, US 6,460,140 B1, issued Oct. 1, 2002 (“Schoch”) 1005
Wyman, US 5,260,999, issued Nov. 9, 1993 (“Wyman”) 1006
Clark, US 6,343,280 B2, issued Jan. 29, 2002 (“Clark”) 1007
Capps, US 6,711,682 B1, issued Mar. 23, 2004 (“Capps”) 1008
Rebuttal Declaration of Dr. Jennifer Golbeck (“Golbeck
Rebuttal Declaration”) 1034
G. Asserted Grounds
Petitioner asserts that the challenged claims are unpatentable on the
following grounds:
Claims Challenged 35 U.S.C. § References
1, 4, 9, 15, 20, 24, 27,
30, 36 103
1 Schoch, Wyman
3, 25, 31, 37 103 Schoch, Wyman, Capps
1, 4, 9, 15, 20, 24, 27,
30, 36 103 Schoch, Wyman, Clark
3, 25, 31, 37 103 Schoch, Wyman, Clark, Capps
II. ANALYSIS
A. Legal Standards
A claim is unpatentable as obvious under 35 U.S.C. § 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 the

1 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 ’696
patent was filed before the effective date of the relevant amendment, the pre-
AIA version of § 103 applies.
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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 ordinary skill in the art; and 4) any objective indicia of non-
obviousness. Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
B. Level of Ordinary Skill in the Art
Petitioner asserts that a person of ordinary skill in the art would have
had “at least a Bachelor’s of Science Degree in Computer Science,
Computer Engineering, Electrical Engineering, or a related discipline in the
field of digital rights management, and at least 2 years of experience in the
field of digital rights management.” Ex. 1003 ¶ 34. Petitioner also asserts
that “[a]dditional education related to digital rights management, or
additional work experience in this field, may compensate for a defici[ency]
in the other.” Id.
Patent Owner responds that “[t]he Petition refers to the accompanying
Declaration of Petitioner’s Expert, without stating a level of ordinary skill in
the art in the Petition.” PO Resp. 15 (citation omitted). Patent Owner’s
argument is not persuasive. The Petition identifies paragraph 34 of the
Golbeck Declaration as “describing the level of ordinary skill in the relevant
field of the ’696 patent.” Pet. 3. Paragraph 34 of the Golbeck Declaration
states that a person of ordinary skill in the art would have had “at least a
Bachelor’s of Science Degree in Computer Science, Computer Engineering,
Electrical Engineering, or a related discipline in the field of digital rights
management, and at least 2 years of experience in the field of digital rights
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management.” Ex. 1003 ¶ 34. Thus, the Petition identifies with sufficient
particularity the level of ordinary skill in the art applied in the Petition.
Patent Owner responds that Petitioner’s description of the level of
ordinary skill in the art “is inappropriate” because Petitioner’s use of the
phrase “at least” means that its description “has no upper bounds.” PO
Resp. 15–16. Patent Owner’s argument is not persuasive. Petitioner’s
description is flexible in that “[a]dditional education related to digital rights
management, or additional work experience in this field, may compensate
for a defici[ency] in the other.” Ex. 1003 ¶ 34. Petitioner’s declarant, Dr.
Golbeck, explains that the phrase “at least” is used to reflect that flexibility,
not to encompass “an individual with excessive educational or work
experience.” Ex. 1034 ¶ 11.
Moreover, Dr. Golbeck confirms that her patentability analysis is
from “the perspective of a [person of ordinary skill in the art (“POSITA”)]
having the baseline education and work experience,” and, thus, the phrase
“at least” did not impact her analysis. Id. ¶ 12. Similarly, at the oral
hearing, Petitioner stated that deleting the phrase “at least” from its
description of the level of ordinary skill in the art would not impact its
analysis or its declarant’s analysis. Tr. 19:11–25. And Patent Owner
acknowledged at the oral hearing that deleting the phrase “at least” from
Petitioner’s description would “address[] [Patent Owner’s] concern.” Id. at
39:9–26. Thus, to avoid any ambiguity, as discussed below, we delete the
phrase “at least” from Petitioner’s description.
Patent Owner responds that Petitioner’s description of the level of
ordinary skill in the art “points not to the more general field of computer
software, but to the highly specialized and particular field of ‘digital rights
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management,’ without an appropriate basis on the record.” PO Resp. 16.
Specifically, Patent Owner contends that although Petitioner’s declarant, Dr.
Golbeck, “has addressed digital rights management, her experience has not
been exclusively in the field of digital rights management.” Id. (citing Ex.
1003 ¶¶ 9–10). Thus, according to Patent Owner, Dr. Golbeck’s
“experience demonstrates that those in the field in fact were involved in a
wide variety of domains such as web programming and social networks, and
not exclusively in the field of digital rights management.” Id. at 17.
Patent Owner’s argument is not persuasive. First, to the extent Patent
Owner contends that Petitioner’s description of the level of ordinary skill in
the art requires experience exclusively in the field of digital rights
management, we disagree. Petitioner’s description requires two years of
experience in the field of digital rights management, but does not preclude
experience in other fields as well. Ex. 1003 ¶ 34. Second, Petitioner’s
description is supported by the evidence of record. Specifically, the ’696
patent and the prior art provide solutions to problems involving software
licensing and piracy (Ex. 1001, 1:8–16; Ex. 1005, 1:5–9; Ex. 1006, 1:23–26;
Ex. 1007, 1:6–11), which “fall squarely within the field of digital rights
management” (Ex. 1034 ¶ 13).
Patent Owner responds that Petitioner’s declarant, Dr. Golbeck, “does
not indicate that [s]he was informed as to the legal standard for determining
the level of ordinary skill in the art,” and “did not conduct any review of the
type of problems, the prior art solutions, the rapidity of development in the
industry, or the sophistication of the technology.” PO Resp. 17–18. Patent
Owner’s argument is not persuasive. Dr. Golbeck explains that Petitioner’s
description of the level of ordinary skill in the art is “[b]ased on [her]
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knowledge and experience in the field and [her] review of the ’696 patent
and file history.” Ex. 1003 ¶ 34. And, as discussed above, Petitioner’s
description is consistent with the problems and solutions discussed in the
’696 patent and the prior art. Ex. 1001, 1:8–16; Ex. 1005, 1:5–9; Ex. 1006,
1:23–26; Ex. 1007, 1:6–11; Ex. 1034 ¶ 13.
Finally, Patent Owner proposes its own description of the level of
ordinary skill in the art. PO Resp. 18. Specifically, Patent Owner asserts
that a person of ordinary skill in the art would have had “a Bachelor’s of
Science Degree in Computer Science, Computer Engineering, [or] Electrical
Engineering, and 2 years of experience in the field of Computer Science,
Computer Engineering or Electrical Engineering.” Id. We disagree. First,
Patent Owner does not identify specific evidence to support its description.
See id. Second, as discussed above, the ’696 patent and the prior art indicate
that a person of ordinary skill in the art would have had experience in the
field of digital rights management, not just general experience in computer
science, computer engineering, or electrical engineering. Ex. 1001, 1:8–16;
Ex. 1005, 1:5–9; Ex. 1006, 1:23–26; Ex. 1007, 1:6–11; Ex. 1034 ¶ 13.
For the foregoing reasons, we adopt Petitioner’s description of the
level of ordinary skill in the art, which is supported by the testimony of
Petitioner’s declarant, Dr. Golbeck, and is consistent with the ’696 patent
and the prior art. As noted above, to avoid any ambiguity, we delete the
phrase “at least” from Petitioner’s description. Therefore, we determine that
a person of ordinary skill in the art would have had a Bachelor’s of Science
Degree in Computer Science, Computer Engineering, Electrical
Engineering, or a related discipline in the field of digital rights management,
and two years of experience in the field of digital rights management.
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We note, though, that we do not find any instance in which the
differences between the parties’ respective descriptions of the level of
ordinary skill in the art impacts our findings or conclusions in this case. See
Sections II.D–II.G. Patent Owner argues generally that Petitioner’s asserted
grounds of unpatentability “are all based on a level of ordinary skill in the
art that is higher and more specific than is warranted based on the record.”
PO Resp. 20. But Patent Owner does not identify any specific dispute that is
impacted by the differences between the parties’ respective descriptions.
See id. at 20–21; Sections II.D–II.G.
C. Claim Construction
In an inter partes review proceeding, a claim of a patent is construed
using the same standard used in federal district court, including construing
the claim in accordance with the ordinary and customary meaning of the
claim as understood by one of ordinary skill in the art and the prosecution
history pertaining to the patent. See Changes to the Claim Construction
Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial
and Appeal Board, 83 Fed. Reg. 51,340, 51,340, 51,358 (Oct. 11, 2018)
(amending 37 C.F.R. § 42.100(b) effective November 13, 2018) (now
codified at 37 C.F.R. § 42.100(b) (2019)). Petitioner proposes construing
the term “attempt” to include “all attempts regardless of whether an attempt
is successful or unsuccessful.” Pet. 6–7. Patent Owner proposes construing
the term “attempt” according to “its ordinary and customary meaning as
understood by one of ordinary skill in the art, and not, as proposed by
Petitioner.” PO Resp. 20.
At the oral hearing, the parties agreed that the term “attempt” does not
require an express construction to resolve the parties’ disputes in this case.
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Tr. 18:20–19:10, 38:19–39:8. We agree and determine that no claim terms
require an express construction to resolve the parties’ disputes regarding the
asserted grounds of unpatentability. See Sections II.D–II.G.
D. Ground 1A – Obviousness of Claims 1, 4, 9, 15, 20, 24, 27, 30,
and 36 over Schoch and Wyman
Petitioner argues that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would
have been obvious over Schoch and Wyman. Pet. 2, 10. For the reasons
discussed below, Petitioner has shown by a preponderance of the evidence
that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would have been obvious over
Schoch and Wyman.
1. Overview of Schoch and Wyman
Schoch relates to “controlling the distribution of software under a
license agreement.” Ex. 1005, 2:11–13. Schoch teaches that a licensed copy
of software has a unique validation number. Id. at 2:53–62, 3:50–55. To
activate the software, a user submits the unique validation number and a
password to a software library. Id. at 3:64–67. The software library
generates a registration key that includes the unique validation number, the
password, and a system identification number for the user’s computer. Id. at
4:1–2, 4:18–21. The user then submits the registration key to a remote
license registration database. Id. at 4:3–7. After the license registration
database verifies the registration key, it generates a license key that includes
the system identification number from the registration key. Id. at 4:7–11.
The license registration database transmits the license key to the user’s
computer, and the user’s computer stores the license key. Id. at 4:11–12.
The user’s computer can fully activate the licensed copy of the software by
verifying the stored license key. Id. at 4:12–15. Each licensed copy of the
software has a maximum number of license keys. Id. at 3:50–55.
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Wyman relates to a software license management system. Ex. 1006,
6:43–45. Wyman teaches a consumptive software license that provides a
user with a maximum number of license units for the software. Id. at 15:42–
45. In order to account for the user’s consumption of those units, Wyman
teaches that an appropriate number of license units is deducted from the
maximum number of license units immediately upon receipt of a license
request. Id. at 15:45–59, 17:20–35.
2. Claim 1
Claim 1 recites “[a] method of preventing piracy of a given software
application.”2 Ex. 1001, 9:2–3. Schoch teaches a method for preventing a
user from giving away free copies of a software application. Pet. 24; Ex.
1005, 1:5–9. Patent Owner does not dispute that the Schoch and Wyman
combination teaches the preamble of claim 1.
Claim 1 recites “assigning a unique identification code to each
authentic copy of such software application.” Ex. 1001, 9:4–5. Schoch
teaches that each licensed copy of the software application has a unique
validation number. Pet. 24–26; Ex. 1005, 2:53–62, 3:50–55. Patent Owner
does not dispute that the Schoch and Wyman combination teaches this
limitation of claim 1.
Claim 1 recites “installing the software application in a data storage
element on a user’s computer.” Ex. 1001, 9:6–7. Schoch teaches installing
the software application on the user’s computer. Pet. 26; Ex. 1005, 2:63–65.

2 For purposes of this Decision, we need not decide whether the preamble of
claim 1 is limiting because we determine that the Schoch and Wyman
combination teaches a method of preventing piracy of a given software
application.
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Patent Owner does not dispute that the Schoch and Wyman combination
teaches this limitation of claim 1.
Claim 1 recites “configuring the software application to require
service data to activate at least part of its functionality.” Ex. 1001, 9:8–9.
Schoch teaches that the user must obtain a license key to activate a licensed
copy of the software application. Pet. 26–28; Ex. 1005, 3:61–4:15. Patent
Owner does not dispute that the Schoch and Wyman combination teaches
this limitation of claim 1.
Claim 1 recites “requiring the user to communicate user data over a
communications network to a remote service provider, the user data being
derived, at least in part, from the unique identification code.” Ex. 1001,
9:10–13. Schoch teaches that to activate a licensed copy of the software
application, the user submits a registration key over the Internet to a remote
license registration database. Pet. 28–30; Ex. 1005, 3:61–4:7, Fig. 2. The
registration key includes the unique validation number, a password, and a
system identification number. Pet. 30–33; Ex. 1005, 3:64–4:2. Patent
Owner does not dispute that the Schoch and Wyman combination teaches
this limitation of claim 1.
Claim 1 recites “examining received user data to derive the unique
identification code associated with the copy of the software application
installed by said user.” Ex. 1001, 9:14–16. Schoch teaches that after the
user submits the unique validation number as part of the registration key, the
license registration database verifies the registration key. Pet. 33–34;
Ex. 1005, 4:5–11. A person of ordinary skill in the art would understand
that verifying the registry key involves examining the registry key to derive
the unique validation number. Pet. 34–35; Ex. 1003 ¶ 100. Patent Owner
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does not dispute that the Schoch and Wyman combination teaches this
limitation of claim 1.
Claim 1 recites “counting the number of times an attempt has been
made to obtain said service data in order to activate at least part of the
functionality of said software application assigned to such unique
identification code.” Ex. 1001, 9:17–20. Schoch teaches that the user
submits the validation number for a licensed copy of the software
application to the license registration database in order to obtain a license
key that activates the software application. Pet. 28–30; Ex. 1005, 3:61–4:15.
Schoch also teaches that each licensed copy of the software application (and
thus each validation number) has a maximum number of license keys. Pet.
35–36; Ex. 1005, 3:50–55.
Wyman teaches a consumptive software license that provides a user
with a maximum number of license units for the software. Pet. 36–37;
Ex. 1006, 15:42–45. Wyman also teaches that an appropriate number of
license units is deducted from the maximum number of license units
immediately upon receipt of a license request.3 Pet. 37; Ex. 1006, 15:45–59,
17:20–35. Because Wyman teaches counting a license request immediately
upon receipt, Wyman teaches counting every activation attempt regardless
of whether it is successful or unsuccessful. Pet. 37–38; Ex. 1003 ¶ 105;
Ex. 1006, 17:20–35. As discussed in more detail below, it would have been
obvious to one of ordinary skill in the art to combine the cited teachings of
Wyman with Schoch so that Schoch’s license registration database counts

3 Although Wyman starts with the maximum number of license units and
counts down to zero, it would have been obvious to start at zero and count
up to the maximum number of license units. Pet. 23; Ex. 1003 ¶ 85.
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the number of activation attempts for a validation number associated with a
copy of a software application until the count reaches the maximum number
of license keys for that validation number. Pet. 23–24, 36–37; Ex. 1003
¶¶ 85, 104. Patent Owner does not dispute that the Schoch and Wyman
combination teaches this limitation of claim 1.
Claim 1 recites “selectively transmitting service data to the user’s
computer when said remote service provider determines that the number of
times an attempt has been made to obtain said service data in order to
activate at least part of the functionality of said software application
assigned to such unique identification code is fewer than a predetermined
threshold.” Ex. 1001, 9:21–27. As discussed above, in the Schoch and
Wyman combination, Schoch’s license registration database counts the
number of activation attempts for a validation number associated with a
copy of a software application until the count reaches the maximum number
of license keys for that validation number. Pet. 23–24, 36–37; Ex. 1003
¶¶ 85, 104. Further, a person of ordinary skill in the art would understand
that Schoch’s license registration database only transmits a license key to the
user’s computer when the count of the number of activation attempts for a
validation number is less than the maximum number of license keys for that
validation number. Pet. 40–42; Ex. 1003 ¶ 107; Ex. 1005, 3:50–55, 3:61–
4:15.
Patent Owner responds with several arguments regarding this
limitation of claim 1. PO Resp. 28–39; PO Sur-reply i–v. In general, Patent
Owner contends that Schoch teaches that a license can activate a copy of the
software on only one computer, but the license provides that computer with
an unlimited number of license keys. PO Resp. 28–39; PO Sur-reply i–v.
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Thus, according to Patent Owner, Schoch teaches limiting the number of
computers on which a licensed copy of the software is installed, not the
number of activations. PO Resp. 30–31; PO Sur-reply ii. We disagree.
Schoch teaches that a license can activate a copy of the software on more
than one computer (Ex. 1005, 3:61–67), but the license provides a maximum
number of license keys (id. at 3:50–55). Further, because a user must obtain
a license key for each activation of a copy of the software, Schoch’s
maximum number of license keys limits the number of activations for that
copy. Ex. 1003 ¶ 103; Ex. 1005, 3:61–4:15; Ex. 1034 ¶ 26. We address
each of Patent Owner’s individual arguments below.
First, Patent Owner responds that Schoch does not teach that the
license registration database only transmits a license key to the user’s
computer when the number of activation attempts is less than a
predetermined threshold. PO Resp. 29. Patent Owner contends that
“Schoch simply states that the license registration database validates the
registration number, stores the user password, and creates the license key,”
but “provides no explanation of the steps taken in the verification process.”
Id. (citing Ex. 1005, 3:2, 4:7–8, 4:66–5:1). Patent Owner also contends that
Petitioner “seeks to leverage this enormous gap in Schoch’s disclosure by
arguing that Schoch has an objective of limiting the number of authorized
activations per licensed copy of a software [application].” Id. at 30 (citing
Pet. 18). According to Patent Owner, “[t]his is a wholly conclusory
allegation.” Id. (citing Ex. 1003 ¶ 80).
Patent Owner’s argument is not persuasive. Schoch teaches that each
licensed copy of the software has a maximum number of license keys.
Ex. 1005, 3:50–55, 4:41–43. For example, Schoch states that “[e]ach
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license has two numbers,” namely, 1) a “validation number” that “consists of
a unique serial number (for this product) and a random number”; and 2) a
“vendor’s license number” that “consists of the validation number plus the
[product identification number], [vendor identification number], maximum
number of license keys, and options.” Id. at 3:50–55 (emphasis added).
Thus, Schoch limits the number of license keys available for a copy of the
software (and its validation number) to a maximum number, i.e., a
predetermined threshold. Id.; Ex. 1003 ¶ 103. Further, as discussed above,
the evidence of record indicates that a person of ordinary skill in the art
would understand that Schoch’s license registration database only transmits
a license key to the user’s computer when the count for a validation number
is less than the maximum number of license keys for that validation number.
Ex. 1003 ¶ 107; Ex. 1005, 3:50–55, 3:61–4:15.
Second, Patent Owner responds that Schoch teaches allowing a
licensor to determine the maximum number of computers on which a copy
of the software can be installed, not the maximum number of activations.4
PO Resp. 30–31 (citing Ex. 1005, 2:14–16, 2:39–42, 2:44–48); PO Sur-reply
ii–iii. Patent Owner cites to a portion of Schoch that states the following:
In the preferred embodiment the use of the licensed software is
restricted to one computer; however, the licensor may choose to
provide the licensee with additional license(s) for back-up
purposes, and/or to also utilize the software on a specific
number of additional computers—such as a portable computer
or on multiple computers in homes, offices and other settings.
Once the software has been loaded on the maximum number of
computers allowed by the licensor, and until the licensee

4 Patent Owner cites column 2, lines 14–16 of Schoch. PO Resp. 30 (citing
Ex. 1005, 2:14–16). We address that portion of Schoch below in connection
with Patent Owner’s argument about Schoch’s system identification number.
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obtains additional license(s), the software may be authorized to
be utilized on additional computers in a demonstration mode.
Ex. 1005, 2:38–48 (emphasis added).
Patent Owner’s argument is not persuasive. Patent Owner relies on
one portion of Schoch that describes one embodiment.5 PO Resp. 30–31;
Ex. 1005, 2:38–48. Other portions of Schoch teach that a licensed copy of
the software has a maximum number of license keys, and a user must obtain
one of those license keys to activate the software. Ex. 1005, 3:50–55, 4:7–
15. Thus, by limiting the number of license keys for a copy of the software,
Schoch limits the number of activations for that copy. Ex. 1003 ¶ 103;
Ex. 1034 ¶ 26.
Further, the portions of Schoch that teach limiting the number of
activations for a licensed copy of the software are consistent with those that
mention determining a maximum number of computers. Pet. Reply 12;
Ex. 1034 ¶ 26. For example, even if a user chooses to use each license key
to activate a copy of the software on a different computer, the number of
computers on which the user could activate the software is still limited by
the maximum number of license keys for that copy. Ex. 1034 ¶ 26. In other
words, Schoch’s maximum number of license keys limits the number of
activations for a licensed copy of the software and, as a result, also
determines the maximum number of computers for that copy. Id.
Third, Patent Owner responds that each license in Schoch provides for
unlimited activations on the same computer. PO Resp. 31–33; PO Sur-reply

5 At the oral hearing, Patent Owner acknowledged that the cited portion of
Schoch is in the summary section “before the terms are fully defined.” Tr.
36:15–37:2.
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iii–iv. Patent Owner contends that Schoch teaches a “system identification
number [that] is provided from hardware in the user’s computer” and “is part
of the registration key submitted to a license registration database.” PO
Resp. 31 (citing Ex. 1005, 4:1–7, 4:18–21). Patent Owner also contends that
the system identification number “does not change frequently.” Id.
(quoting Ex. 1005, 4:25–28). According to Patent Owner, “a system
identification number that does not change frequently permits a user to
request and obtain a new license key for the same computer, such as after a
system failure requiring a new installation.” Id. at 31–32. Thus, Patent
Owner concludes that “Schoch’s guidance to avoid use of a number that
changes frequently as the basis for the system identification number clearly
contemplates multiple requests for license keys to permit reinstallations on
the same computer system.” Id. at 32.
Patent Owner’s argument is not persuasive. Schoch teaches that a
licensed copy of the software has a maximum number of license keys.
Ex. 1005, 3:50–55. Schoch does not state that this limit has an exception for
license keys requested by the same computer (e.g., after a system failure).
See id. at 3:48–4:15. Schoch also does not indicate that it uses a computer’s
system identification number to create such an exception. See id. at 4:1–28.
Rather, Schoch teaches that the license registration database receives a
system identification number from a user’s computer and then inserts the
system identification number into a license key that is returned to the user’s
computer. Id. at 4:1–15. By aligning the license key with the system
identification number for the user’s computer, Schoch prevents the user from
using the same license key to activate the software on another computer (i.e.,
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without requesting another license key).6 Id. at 2:14–17, 4:7–15; Ex. 1034
¶¶ 31–32. In other words, Schoch uses the system identification number to
enforce its limit on the number of license keys, not to provide an exception
to that limit. Ex. 1034 ¶¶ 31–32.
Fourth, Patent Owner responds that each license in Schoch can
activate a copy of the software on only one computer. PO Resp. 34–35
(citing Ex. 1005, 2:39–44). Patent Owner’s argument is not persuasive.
Schoch teaches that each license can activate a copy of the software on more
than one computer. Ex. 1005, 3:61–4:15; Ex. 1034 ¶ 24. For example,
Schoch states the following:
At the time the end user acquires the software from the retailer
or other source, the end user receives the validation number
accompanying that software. To register the software and
“unlock” it for use on his computer(s), the user submits the
validation number, together with a password chosen by the user
to the software library through the registration option interface.
Ex. 1005, 3:61–67 (emphasis added). In other words, Schoch teaches that
the unique validation number for one licensed copy of the software can
activate the software on multiple computers. Id.; Ex. 1034 ¶ 24. Patent
Owner does not address this particular teaching of Schoch. See PO Resp.
34–35.

6 Patent Owner argues that Petitioner’s declarant, Dr. Golbeck, provides
contradictory statements about the system identification number in her initial
and rebuttal declarations. PO Sur-reply iv (citing Ex. 1003 ¶ 86; Ex. 1034
¶ 34). We disagree. In both declarations, Dr. Golbeck explains that Schoch
does not use the system identification number to determine whether to issue
a license key, but, rather, uses the system identification number to align a
license key with a user’s computer. Ex. 1003 ¶ 86; Ex. 1034 ¶¶ 31–32.
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Fifth, Patent Owner responds that Schoch’s maximum number of
license keys is an overall limit on the number of license keys for the
software product “as a whole,” not for an individual copy of the software.
Id. at 35–36. Patent Owner contends that “Schoch describes the components
of the vendor’s license number as consisting of ‘the validation number plus
the PID, VID, maximum number of license keys, and options.’” Id. at 36
(quoting Ex. 1005, 3:53–55). Patent Owner also contends that “[t]he PID is
a product identification number that describes the product” and “the VID is a
vendor identification number,” both of which “are created by the service
provider.” Id. (citing Ex. 1005, 3:22–25). Thus, according to Patent Owner,
“by its proximity with the PID and VID, the maximum number of license
keys . . . [is] an overall limit on [the] number of license keys for a product or
for a vendor, as opposed to for an individual licensee.” Id.
Patent Owner’s argument is not persuasive. Patent Owner’s argument
is that because some parameters in the vendor’s license number are vendor
specific (and not license specific), then all the parameters in the vendor’s
license number must be vendor specific. Id. We disagree. Schoch teaches
that a “vendor’s license number consists of the validation number plus the
PID, VID, maximum number of license keys, and options.” Ex. 1005, 3:53–
55 (emphasis added). Schoch also teaches that there is “a unique validation
number for each copy of the software to be separately licensed.” Id. at 2:53–
58 (emphasis added). In other words, Schoch teaches that the vendor’s
license number includes a validation number that is unique to a specific
licensed copy of the software. Id. at 2:53–58, 3:53–55. As a result,
Schoch’s teachings do not support Patent Owner’s argument that the
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maximum number of license keys must be a vendor specific parameter
simply because it is included in the vendor’s license number.
Further, Petitioner’s declarant, Dr. Golbeck, explains that a person of
ordinary skill in the art would not interpret Schoch as teaching that the
maximum number of license keys is an overall limit for the software product
as a whole. Pet. Reply 16–17; Ex. 1034 ¶ 37. Specifically, Dr. Golbeck
explains that interpreting the maximum number of license keys as an overall
limit would “lead to an unusual scenario in which the software vendor
sought to purposely depress use of its software products overall (across all
licensees),” and there is “no evidence for such a peculiar scheme in Schoch’s
disclosure.” Ex. 1034 ¶ 37.
Patent Owner argues in the Sur-reply that Petitioner’s Reply
“conced[es] that Schoch’s scheme is admittedly computer specific, such that
each license is tied to only one specific computer and will not operate on
another.” PO Sur-reply i–ii. We disagree. As discussed above, a license
has a unique validation number that may be used to activate the software on
multiple computers. Ex. 1005, 3:61–67. Thus, a license is not computer
specific. Id.; Ex. 1034 ¶ 29. However, a license also has a maximum
number of license keys. Ex. 1005, 3:50–55. As explained above, a license
key is computer specific. Id. at 2:14–17, 4:7–15; Ex. 1034 ¶¶ 31–32. But
because a user must obtain a new license key for each activation, whether on
the same computer (e.g., after a system failure) or on an additional
computer, Schoch’s maximum number of license keys limits the number of
activations for a copy of the software. Ex. 1005, 3:61–4:15; Ex. 1034 ¶ 26.
Patent Owner also argues in the Sur-reply that “limiting a number of
allowed activations does not disclose a limit based, instead, on a number of
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activation attempts.” PO Sur-reply v; see also id. at viii (“a proposed
combination that allegedly considers the ‘number of activations,’ as opposed
to the claimed number of activation attempts” (citation omitted)). However,
Patent Owner’s Response and Petitioner’s Reply consistently focus on an
alleged distinction between activations and computers, not between
activations and activation attempts. See, e.g., PO Resp. 30–31 (“the number
of computers on which the software is installed, not the number of
activations”), 31 (“subsequent activations on the same computer”), 35
(“single activation for each license”); Pet. Reply 10–19. Thus, Patent
Owner’s argument in the Sur-reply regarding an alleged distinction between
activations and activation attempts is not proper because it does not respond
to an argument in the Reply, but rather, proceeds in a new direction. See
Consolidated Trial Practice Guide 73–74 (Nov. 2019) (“TPG”), available at
https://www.uspto.gov/TrialPracticeGuideConsolidated; see also Paper 8, 7
(“Patent Owner is cautioned that any arguments for patentability not raised
in the response may be deemed waived.”).
Moreover, even if it had been timely, Patent Owner’s argument would
not have been persuasive. Schoch teaches that a user submits the validation
number for a licensed copy of the software to the license registration
database in order to obtain a license key that activates the software. Ex.
1005, 3:61–4:15. Schoch also teaches that each licensed copy of the
software (and thus each validation number) has a maximum number of
license keys. Id. at 3:50–55. Wyman teaches counting a license request
immediately upon receipt, and, thus, teaches counting every activation
attempt regardless of whether it is successful or unsuccessful. Ex. 1003
¶ 105; Ex. 1006, 17:20–35. The evidence of record indicates that it would
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have been obvious to one of ordinary skill in the art to combine the cited
teachings of Wyman with Schoch so that Schoch’s license registration
database updates a count of the number of activation attempts (whether
successful or not) for a validation number associated with a copy of software
until the count reaches the maximum number of license keys for that
validation number. Ex. 1003 ¶¶ 85, 104–105.
Claim 1 recites “said user’s computer being connected to said
communications network and designated to storably receive said service
data.” Ex. 1001, 9:27–29. Schoch teaches that the user’s computer connects
to the remote license registration database over the Internet and stores the
received license key. Pet. 42–43; Ex. 1005, 4:3–12. Patent Owner does not
dispute that the Schoch and Wyman combination teaches this limitation of
claim 1.
3. Claims 15, 24, 30, and 36
Independent claims 15, 24, 30, and 36 recite limitations similar to
those discussed above for claim 1. Ex. 1001, 10:38–59, 11:44–12:4, 12:37–
65, 13:27–14:17. Petitioner relies on the same arguments and evidence
discussed above for claim 1 to show that claims 15, 24, 30, and 36 would
have been obvious. Pet. 46–52. Other than the arguments discussed above
for claim 1, Patent Owner does not separately dispute that the Schoch and
Wyman combination teaches the limitations of claims 15, 24, 30, and 36.
See PO Resp. 39–40.
4. Claim 4
Claim 4 depends from claim 1, and recites “wherein said user data
includes product information relating to said software application installed
on the data storage element of the user’s computer.” Ex. 1001, 9:37–40.
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Schoch teaches that to activate a licensed copy of the software application, a
user submits a registration key that includes a unique validation number.
Pet. 28–33; Ex. 1005, 3:64–4:2. Schoch also teaches that the unique
validation number includes information identifying the product. Pet. 44; Ex.
1005, 6:13–17. Other than the arguments discussed above for claim 1,
Patent Owner does not separately dispute that the Schoch and Wyman
combination teaches the limitation of claim 4. See PO Resp. 41–42.
5. Claims 9 and 20
Claim 9 depends from claim 1, and recites “wherein the step of
selectively transmitting said service data is an uploading event in which said
service data is automatically transferred from said remote service provider
and storably received by the user’s computer system.” Ex. 1001, 9:59–64.
Claim 20 depends from claim 15, and recites “wherein said service data is
transferred by said remote service computer system without human
intervention and received by said user computer system.” Id. at 11:21–24.
Schoch teaches that the license registration database transmits a license key
to the user’s computer, and the user’s computer stores the received license
key. Pet. 45, 47; Ex. 1005, 4:7–15, 5:1–4. Schoch also teaches the license
registration process is fully automated. Pet. 45, 47; Ex. 1005, 2:27–30, Fig.
3. Other than the arguments discussed above for claim 1, Patent Owner does
not separately dispute that the Schoch and Wyman combination teaches the
limitations of claims 9 and 20. See PO Resp. 41–42.
6. Claim 27
Claim 27 depends from claim 24, and recites “wherein said received
service data is stored within the data storage element of the user’s
computer.” Ex. 1001, 12:14–16. Schoch teaches that the user’s computer
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stores the received license key in its system registry. Pet. 43, 49; Ex. 1005,
4:7–15, 5:1–4. Other than the arguments discussed above for claim 1, Patent
Owner does not separately dispute that the Schoch and Wyman combination
teaches the limitation of claim 27. See PO Resp. 41–42.
7. Reasons for Combining Schoch and Wyman
Petitioner presents evidence that a person of ordinary skill in the art
would have had reason to combine the cited teachings of Schoch and
Wyman. Pet. 17–24 (citing Ex. 1003 ¶¶ 79–87). Specifically, Schoch and
Wyman relate to the same field of endeavor as the ’696 patent, namely,
digital rights management. Pet. 17–20; Ex. 1001, 1:8–16; Ex. 1003 ¶ 34;
Ex. 1005, 1:5–9; Ex. 1006, 1:23–26; Ex. 1034 ¶ 13. Schoch and Wyman
also are reasonably pertinent to a particular problem with which the
inventors of ’696 patent were involved, namely, limiting the use of licensed
software. Pet. 19; Ex. 1001, 1:26–28, 2:3–7; Ex. 1003 ¶ 80; Ex. 1005, 1:5–
9; Ex. 1006, 1:23–26.
It would have been obvious to combine the cited teachings of Wyman
with Schoch so that Schoch’s license registration database counts the
number of activation attempts for a validation number associated with a
copy of a software application until the count reaches the maximum number
of license keys for that validation number. Pet. 23–24, 36–37; Ex. 1003
¶¶ 85, 104. Doing so would have been obvious because it would have
involved the mere application of Wyman’s known technique to Schoch’s
system in a manner that would yield predictable results. Pet. 18–19; Ex.
1003 ¶ 79. Further, combining the cited teachings of Schoch and Wyman
would have improved Schoch by simplifying the administration of its
software licenses. Pet. 21–22; Ex. 1003 ¶¶ 82, 84.
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Patent Owner responds with several arguments regarding the reasons
for combining Schoch and Wyman. PO Resp. 21–27, 34–35, 37–38; PO
Sur-reply vi–vii. In general, Patent Owner contends that “Schoch and
Wyman, while both having teachings relating to, at an extremely high level,
restricting use of software, in fact address different problems and employ
entirely different techniques.” PO Resp. 21–22. Thus, Patent Owner
concludes that Petitioner fails “to consider how a POSITA would understand
Wyman and Schoch as a whole.” Id. at 24.
“The Supreme Court’s decision in KSR . . . directs us to construe the
scope of analogous art broadly.” Wyers v. Master Lock Co., 616 F.3d 1231,
1238 (Fed. Cir. 2010). As discussed above, the evidence of record indicates
that Schoch and Wyman relate to the same field of endeavor as the ’696
patent, namely, digital rights management, and also are reasonably pertinent
to a particular problem with which the inventors of ’696 patent were
involved, namely, limiting the use of licensed software. Pet. 17–20; Ex.
1001, 1:8–16, 1:26–28, 2:3–7; Ex. 1003 ¶¶ 34, 80; Ex. 1005, 1:5–9; Ex.
1006, 1:23–26; Ex. 1034 ¶ 13. Although Patent Owner identifies several
alleged differences between Schoch and Wyman, Patent Owner does not
explain specifically why Schoch or Wyman are not analogous art with
respect to the ’696 patent.7 See PO Resp. 21–27, 34–35, 37–38; PO Sur-
reply vi–vii.
We address each of Patent Owner’s arguments regarding the alleged
differences between Schoch and Wyman in detail below. For the reasons
discussed below, none of the alleged differences demonstrate that the

7 At the oral hearing, Patent Owner acknowledged that it does not dispute
that Schoch and Wyman are analogous art. Tr. 28:13–29:5.
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teachings of Schoch and Wyman relied on by Petitioner are incompatible or
that a person of ordinary skill in the art would have been deterred from the
proposed combination.
First, Patent Owner responds that “Schoch teaches a system to deter
the making of unauthorized copies of standalone software products, which
may be distributed, for example, on floppy disks or CD-ROM’s.” PO Resp.
23 (citing Ex. 1005, 1:5–9, 1:14, 1:54, 2:20–24, 2:37–44, 4:18–25, 5:12); see
PO Sur-reply vi. Patent Owner contends that, in contrast, “the Wyman
reference does not relate to preventing unauthorized copying of standalone
licensed software products on individual computer systems, but is intended
primarily for software use[d] in networks, and not on standalone computer
systems.” PO Resp. 23–24 (citing Ex. 1006, 2:3–6, 2:8–15); see PO Sur-
reply vi. Patent Owner also contends that Wyman’s license includes
variables that relate specifically to a network environment. PO Resp. 26,
37–38 (citing Ex. 1006, 12:2–59, Fig. 2).
Patent Owner’s argument is not persuasive. Wyman does not teach
that its license management system is limited to just networked (or
distributed) computing systems. Pet. Reply 3–4. Rather, Wyman states the
following:
For example, the license management system should allow for
simultaneous use of a wide variety of different licensing
alternatives, instead of being rigidly structured to permit only
one or only a few. . . . For example, a software product may be
licensed to a single individual for use on a single CPU, or to an
organization for use by anyone on a network, or for use by any
users at terminals in a cluster, or only for calls from another
specific licensed product, or any of a large number of other
alternatives.
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Ex. 1006, 1:52–64 (emphasis added). Wyman also teaches that “[a]lthough
shown in FIG. 1 as operating on a distributed system, in the simplest case
the license management facility of the invention may be operated on a single
CPU.” Id. at 10:58–61. Thus, Wyman’s teachings are applicable to
standalone software products on individual computer systems, not just
networked (or distributed) computing systems. Ex. 1034 ¶¶ 16–17.
Second, Patent Owner responds that “Schoch is not concerned with
individual features of software packages.” PO Resp. 25. Patent Owner
contends that, in contrast, Wyman “is concerned with the trend that software
products were increasingly fragmented into specific functions,” and
“indicates that it would be advantageous to distribute the entire combination
as one package, then allow the customer to license features separately.” Id.
at 24 (citing Ex. 1006, 2:35–40, 2:42–52).
Patent Owner’s argument is not persuasive. Wyman does not teach
that its license management system is limited to just individual features of
software packages. Pet. Reply 4–5. Rather, Wyman states the following:
The terms “program” and “licensed product” are used in
reference to the element 17, but it is understood that the
products being administered may be segments of programs, or
functions or features called by another program, or even merely
data (such as printer fonts), as well as complete stand-alone
applications programs.
Ex. 1006, 9:54–60 (emphasis added). Thus, Wyman’s teachings are
applicable to complete software products, not just individual features.
Ex. 1034 ¶ 18.
Third, Patent Owner responds that “Schoch is not concerned with
interrelationships of multiple different software products of a licensor used
in the same system.” PO Resp. 25. Patent Owner contends that, in contrast,
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“Wyman explains that an approach called ‘transitive licensing’ means that
the right to use one product or feature implies a right to use one or more
other products or licenses.” Id. (citing Ex. 1006, 2:68–3:10, 3:18–48).
Patent Owner also contends that Wyman’s license includes variables that
relate specifically to the use of multiple products in combination. PO Resp.
26, 37–38 (citing Ex. 1006, 12:2–59, Fig. 2).
Patent Owner’s argument is not persuasive. Wyman does not teach
that its license management system is limited to just transitive licensing.
Pet. Reply 6. Specifically, Wyman states that “transitive licensing is an
important feature of one embodiment.” Ex. 1006, 8:4–5 (emphasis added).
Thus, Wyman’s teachings are applicable to other types of licensing, not just
transitive licensing. Ex. 1034 ¶ 19.
Fourth, Patent Owner responds that Schoch “provide[s] for perpetual
licenses on individual computers.” PO Resp. 26; see id. at 34–35; PO Sur-
reply vi. Patent Owner contends that, in contrast, “Wyman requires the
license to be validated each time the software is started, as opposed to a
single instance for each licensed computer.” PO Resp. 26 (citing Ex. 1006,
6:49–61, 7:8–15); see PO Sur-reply vi.
Patent Owner’s argument is not persuasive. As discussed above,
Petitioner proposes combining Wyman’s teaching of updating a count of the
number of license requests for a copy of a software application with Schoch
so that Schoch’s license registration database updates a count of the number
of activation attempts for a validation number until the count reaches the
maximum number of license keys for that validation number. Pet. 23–24,
36–37; Ex. 1003 ¶¶ 85, 104. Although Wyman’s count pertains to the
number of requests to run the software and Schoch’s count pertains to the
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number of requests to activate the software, the administrative task of
updating the count would be “highly similar” in both contexts. Pet. 19–20;
Ex. 1003 ¶ 80. Thus, the difference between Schoch and Wyman would not
have deterred a person of ordinary skill in the art from the proposed
combination. Ex. 1003 ¶ 80.
Patent Owner does not specifically argue in the Response or Sur-reply
that Schoch or Wyman teaches away from the claimed invention. See PO
Resp. 21–27, 34–35, 37–38; PO Sur-reply vi–vii. But, at the oral hearing,
Patent Owner argued that “when you look at the entirety of Wyman, it
teaches away from combining with Schoch.” Tr. 29:7–17. Patent Owner’s
argument is not timely because it was presented for the first time at the oral
hearing. See PO Resp. 21–27, 34–35, 37–38; PO Sur-reply vi–vii; Tr. 29:7–
17; TPG, 85–86 (“During an oral hearing, a party . . . may only present
arguments relied upon in the papers previously submitted.”). Moreover,
Patent Owner’s argument is not persuasive. Although Patent Owner
identifies several alleged differences between Schoch and Wyman, Patent
Owner does not identify any portion of Schoch or Wyman that criticizes,
discredits, or otherwise discourages investigation into the claimed invention.
See PO Resp. 21–27, 34–35, 37–38; PO Sur-reply vi–vii; Meiresonne v.
Google, Inc., 849 F.3d 1379, 1382 (Fed. Cir. 2017).
At the oral hearing, Patent Owner also argued that Petitioner proposes
“that Wyman []as a whole should be combined with Schoch,” but does not
show that doing so would have been obvious. Tr. 26:18–28:8. Patent
Owner’s argument is not timely because it was presented for the first time at
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the oral hearing.8 See PO Resp. 21–27, 34–35, 37–38; PO Sur-reply vi–vii;
Tr. 26:18–28:8; TPG, 85–86. Moreover, Patent Owner’s argument is not
persuasive. Petitioner asserts that because “Schoch leaves the details of the
service provider’s regulation of software usage . . . to the discretion of a
POSITA,” a person of ordinary skill in the art would have considered
Wyman’s “teachings regarding the administration of licenses with a usage
limit” to provide those details. Pet. 18. But Petitioner does not propose
combining every such detail from Wyman into Schoch. See id. at 17–24.
Rather, as discussed above, Petitioner proposes combining Wyman’s
teaching of updating a count of the number of license requests for a copy of
a software application with Schoch so that Schoch’s license registration
database updates a count of the number of activation attempts for a
validation number until the count reaches the maximum number of license
keys for that validation number. Pet. 23–24, 36–37; Ex. 1003 ¶¶ 85, 104.
8. Summary
For the foregoing reasons, Petitioner has shown by a preponderance of
the evidence that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would have been
obvious over Schoch and Wyman.

8 Patent Owner argues in the Response that Petitioner fails to consider the
teachings of Schoch and Wyman “as a whole” (PO Resp. 24), but does not
argue that Petitioner proposes combining Wyman as a whole with Schoch
(see id. at 21–27, 34–35, 37–38). Rather, Patent Owner acknowledges in the
Response that Petitioner proposes combining “selected features” of Wyman
with Schoch. Id. at 26–27.
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E. Ground 1B – Obviousness of Claims 3, 25, 31, and 37 over
Schoch, Wyman, and Capps
Petitioner argues that claims 3, 25, 31, and 37 would have been
obvious over Schoch, Wyman, and Capps. Pet. 2, 52. For the reasons
discussed below, Petitioner has shown by a preponderance of the evidence
that claims 3, 25, 31, and 37 would have been obvious over Schoch,
Wyman, and Capps.
1. Claim 3
Claim 3 depends from claim 1, and recites “wherein said user data
includes identifying data that identifies the user.” Ex. 1001, 9:34–36. Capps
teaches a registration process for an online service in which a user submits a
valid user identification. Pet. 58; Ex. 1008, 6:39–41. As discussed in more
detail below, it would have been obvious to combine the cited teachings of
Capps with Schoch and Wyman so that Schoch’s registration key includes a
user identification. Pet. 55–56; Ex. 1003 ¶ 147. Other than the arguments
discussed above for claim 1, Patent Owner does not separately dispute that
the Schoch, Wyman, and Capps combination teaches the limitation of claim
3. See PO Resp. 41–42.
2. Claims 25, 31, and 37
Claim 25 depends from claim 24, and recites “archiving user data
received from users over the communications network in a data storage
element of the remote service system.” Ex. 1001, 12:5–8. Claim 31
depends from claim 30, and recites “archiving user data received from
users.” Id. at 12:66–67. Claim 37 depends from claim 36, and recites
“archiving user data received from users.” Id. at 14:18–19. Capps teaches a
user registry that maintains a list of user identifications. Pet. 59; Ex. 1008,
7:5–8, 8:63–9:1. As discussed in more detail below, it would have been
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obvious to combine the cited teachings of Capps with Schoch and Wyman
so that Schoch’s license registration database includes a user registry that
stores the user identifications received from users. Pet. 55–56; Ex. 1003
¶ 147. Other than the arguments discussed above for claim 1, Patent Owner
does not separately dispute that the Schoch, Wyman, and Capps combination
teaches the limitation of claims 25, 31, and 37. See PO Resp. 41–42.
3. Reasons for Combining Schoch, Wyman, and Capps
Petitioner presents evidence that a person of ordinary skill in the art
would have had reason to combine the cited teachings of Capps with Schoch
and Wyman. Pet. 54–58 (citing Ex. 1003 ¶¶ 146–152). Specifically, Capps
relates to the same field of endeavor as the ’696 patent, namely, digital rights
management. Pet. 57–58; Ex. 1003 ¶ 152; Ex. 1001, 1:8–16; Ex. 1008, 2:3–
7. It would have been obvious to combine the cited teachings of Capps with
Schoch and Wyman so that Schoch’s registration key includes a user
identification and Schoch’s license registration database includes a user
registry that stores the user identifications received from users. Pet. 55–56;
Ex. 1003 ¶ 147. Doing so would have been obvious because it would 1)
allow a software vendor to collect additional useful information; and 2)
would have been the mere application of Capps’s known techniques to the
Schoch and Wyman combination in a manner that would yield predictable
results. Pet. 56–58; Ex. 1003 ¶¶ 149, 152. Other than the arguments
discussed above for the Schoch and Wyman combination, Patent Owner
does not separately dispute that it would have been obvious to combine the
cited teachings of Schoch, Wyman, and Capps.
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4. Summary
For the foregoing reasons, Petitioner has shown by a preponderance of
the evidence that claims 3, 25, 31, and 37 would have been obvious over
Schoch, Wyman, and Capps.
F. Ground 1C – Obviousness of Claims 1, 4, 9, 15, 20, 24, 27, 30,
and 36 over Schoch, Wyman, and Clark
Petitioner argues that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would
have been obvious over Schoch, Wyman, and Clark. Pet. 2, 60. For the
reasons discussed below, Petitioner has shown by a preponderance of the
evidence that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would have been
obvious over Schoch, Wyman, and Clark.
1. Claim 1
Claim 1 recites, inter alia, “counting the number of times an attempt
has been made to obtain said service data in order to activate at least part of
the functionality of said software application assigned to such unique
identification code.” Ex. 1001, 9:17–20. Except for this “counting”
limitation, Petitioner relies on the same arguments and evidence discussed
above for the Schoch and Wyman combination. Pet. 64. As discussed
above, Schoch teaches that to activate a licensed copy of a software
application, a user submits a registration key that includes a unique
validation number, a password, and a system identification number. Id.
at 28–33; Ex. 1005, 3:61–4:7. Petitioner argues that “to the extent there is
any question as to the role of the ‘password’ in verifying an activation
request in the Schoch-Wyman system . . . , Clark demonstrates that a system
which does not rely on transmission of a password from client to server
would still have been obvious.” Pet. 63.
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Specifically, Clark teaches that a user key is encrypted with a
password, and a user must enter the password to decrypt the key before it is
transmitted to a license server. Pet. 61, 63–64; Ex. 1007, 26:26–56, 28:60–
29:21, Fig. 13. As discussed in more detail below, it would have been
obvious to combine the cited teachings of Clark with Schoch and Wyman so
that a user enters a password to decrypt Schoch’s validation number before it
is included in the registration key and transmitted to the license registration
database. Pet. 64; Ex. 1003 ¶ 162. Thus, in the Schoch, Wyman, and Clark
combination, the registration key does not include a password. Pet. 64;
Ex. 1003 ¶ 162. Other than the arguments discussed above for the Schoch
and Wyman combination, Patent Owner does not separately dispute that the
Schoch, Wyman, and Clark combination teaches the limitations of claim 1.
2. Reasons for Combining Schoch, Wyman, and Clark
Petitioner presents evidence that a person of ordinary skill in the art
would have had reason to combine the cited teachings of Clark with Schoch
and Wyman. Pet. 64–66 (citing Ex. 1003 ¶¶ 162–167). Specifically, Clark
relates to the same field of endeavor as the ’696 patent, namely, digital rights
management. Id. at 66; Ex. 1001, 1:8–16; Ex. 1003 ¶ 167; Ex. 1007, 1:6–11,
28:60–29:21. It would have been obvious to combine the cited teachings of
Clark with Schoch and Wyman so that a user enters a password to decrypt
Schoch’s validation number before it is included in the registration key and
transmitted to the license registration database. Pet. 64; Ex. 1003 ¶ 162.
Doing so would have been obvious because it would 1) allow the validation
number to be stored in an encrypted form at the user’s device; and
2) simplify the administration tasks performed by the license registration
database. Pet. 65; Ex. 1003 ¶¶ 164, 166. Other than the arguments
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discussed above for the Schoch and Wyman combination, Patent Owner
does not separately dispute that it would have been obvious to combine the
cited teachings of Schoch, Wyman, and Clark.
3. Summary
For the foregoing reasons, Petitioner has shown by a preponderance of
the evidence that claims 1, 4, 9, 15, 20, 24, 27, 30, and 36 would have been
obvious over Schoch, Wyman, and Clark.
G. Ground 1D – Obviousness of Claims 3, 25, 31, and 37 over
Schoch, Wyman, Clark, and Capps
Petitioner argues that claims 3, 25, 31, and 37 would have been
obvious over Schoch, Wyman, Clark, and Capps. Pet. 2, 66. Petitioner
relies on the same arguments and evidence discussed above for the Schoch,
Wyman, and Capps combination and the Schoch, Wyman, and Clark
combination to show that claims 3, 25, 31, and 37 would have been obvious.
Id. at 66–67. Other than the arguments discussed above, Patent Owner does
not separately dispute that claims 3, 25, 31, and 37 would have been obvious
over Schoch, Wyman, Clark, and Capps. Thus, for the same reasons
discussed above, Petitioner has shown by a preponderance of the evidence
that claims 3, 25, 31, and 37 would have been obvious over Schoch,
Wyman, Clark, and Capps. See Sections II.D–II.F.
H. Constitutionality
Patent Owner argues that Administrative Patent Judges (“APJs”) “are
principal officers under the Appointments Clause of the Constitution . . . ,
but undisputedly are not appointed through the constitutionally-mandated
mechanism of appointment for principal officers.” PO Resp. 42. Patent
Owner also argues that the Federal Circuit’s decision in Arthrex, Inc. v.
Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), cert. granted sub
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nom. United States v. Arthrex, Inc., 2020 WL 6037206 (Oct. 13, 2020),
“impermissibly re-writes the statutes governing APJs,” and that “the ability
to remove APJs at will is insufficient to render APJs inferior officers.” PO
Resp. 42, 45. We decline to consider Patent Owner’s constitutional
challenge as the Federal Circuit addressed this issue in Arthrex, 941 F.3d at
1325.
III. CONCLUSION9
Petitioner has shown by a preponderance of the evidence that claims
1, 3, 4, 9, 15, 20, 24, 25, 27, 30, 31, 36, and 37 of the ’696 patent are
unpatentable.
In summary:
Claims

35
U.S.C. §
References/Basis Claims
Shown
Unpatentable
Claims
Not Shown
Unpatentable
1, 4, 9,
15, 20,
24, 27,
30, 36
103 Schoch, Wyman 1, 4, 9, 15, 20,
24, 27, 30, 36

3, 25, 31,
37
103 Schoch, Wyman,
Capps
3, 25, 31, 37
1, 4, 9,
15, 20,
24, 27,
103 Schoch, Wyman,
Clark
1, 4, 9, 15, 20,
24, 27, 30, 36

9 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).
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Claims

35
U.S.C. §
References/Basis Claims
Shown
Unpatentable
Claims
Not Shown
Unpatentable
30, 36
3, 25, 31,
37
103 Schoch, Wyman,
Clark, Capps
3, 25, 31, 37
Overall
Outcome
1, 3, 4, 9, 15,
20, 24, 25, 27,
30, 31, 36, 37

IV. ORDER
It is hereby
ORDERED that claims 1, 3, 4, 9, 15, 20, 24, 25, 27, 30, 31, 36, and 37
of the ’696 patent are shown unpatentable; 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.

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PETITIONER:

W. Karl Renner
David Holt
Nicholas Stephens
Craig Carlson
FISH & RICHARDSON P.C.
axf-ptab@fr.com
holt2@fr.com
nstephens@fr.com
ccarlson@fr.com

PATENT OWNER:

Brian Koide
Brett Mangrum
Ryan Loveless
James Etheridge
Jeffrey Huang
ETHERIDGE LAW GROUP
brian@etheridgelaw.com
brett@etheridgelaw.com
ryan@etheridgelaw.com
jim@etheridgelaw.com
jeff@etheridgelaw.com