Apple Inc.v.ContentGuard Holdings, Inc.

Patent Trial and Appeal Board

Jun 21, 2016

10956121 (P.T.A.B. Jun. 21, 2016)

Trials@uspto.gov Paper 8
571-272-7822 Entered: June 21, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

GOOGLE INC. and APPLE INC.,
Petitioners,

v.

CONTENTGUARD HOLDINGS, INC.,
Patent Owner.
____________

Case CBM2015-000401
Patent 7,774,280 B2
____________

Before MICHAEL R. ZECHER, BENJAMIN D. M. WOOD, and
GEORGIANNA W. BRADEN, Administrative Patent Judges.

ZECHER, Administrative Patent Judge.

FINAL WRITTEN DECISION
Covered Business Method Patent Review
35 U.S.C. § 328(a) and 37 C.F.R. § 42.73

1 Case CBM2015-00160 has been joined with this proceeding.
CBM2015-00040
Patent 7,774,280 B2
2
I. BACKGROUND
A. Introduction
Google Inc. (“Google”) filed a Petition requesting a review under the
transitional program for covered business method patents of claims 1, 5, 11,
12, and 22 of U.S. Patent No. 7,774,280 B2 (“the ’280 patent,” Ex. 1001).
Paper 1 (“Pet.”). ContentGuard Holdings, Inc. (“Patent Owner”) filed a
Preliminary Response. Paper 8 (“Prelim. Resp.”). Taking into account the
arguments presented in the Preliminary Response, we determined that the
information presented in the Petition establishes that claims 1, 5, and 11 of
the ’280 patent are more likely than not unpatentable under 35 U.S.C.
§§ 102(b) and 103(a). We, however, determined that the information
presented in the Petition did not establish that claims 12 and 22 of the ’280
patent are more likely than not unpatentable. Pursuant to 35 U.S.C. § 324
and § 18(a) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29,
125 Stat. 284, 329–31 (2011) (“AIA”),2 we instituted this covered business
method patent review proceeding on June 24, 2015, only as to claims 1, 5,
and 11 of the ’280 patent. Paper 9 (“Dec. on Inst.”).
After instituting this proceeding, we considered a Petition filed by
Apple Inc. (“Apple”) in Case CBM2015-00160 that challenges the same

2 Section 18(a)(1) of the AIA provides that the transitional program for
covered business method patents will be regarded as a post-grant review
under chapter 32 of title 35 United States Code and will employ the
standards and procedures of a post-grant review, subject to certain
exceptions.

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claims of the ’280 patent at issue in this proceeding based on the same
grounds of unpatentability. The Petition in Case CBM2015-00160 was
accompanied by a Motion for Joinder that requests we join Apple as a party
to this proceeding. Pursuant to § 324 and § 18(a) of the AIA, we instituted
another covered business method patent review proceeding as to claims 1, 5,
and 11 of the ’280 patent, and then granted Apple’s Motion for Joinder.
Paper 14.
During the course of trial, Patent Owner filed a Response to the
Petition (Paper 15, “PO Resp.”), and a Motion to Amend (Paper 16, “Mot. to
Amend”). Google and Apple (collectively, “Petitioners”) filed a Reply to
the Patent Owner Response (Paper 21, “Pet. Reply”), and an Opposition to
the Motion to Amend (Paper 22, “Opp. to Mot.”). Thereafter, Patent Owner
filed a Reply to the Opposition to the Motion to Amend. Paper 25 (“Reply
to Mot.”). Patent Owner also filed a Motion for Observation regarding
certain cross-examination testimony of Petitioners’ rebuttal witness,
Benjamin Goldberg, Ph.D. (Paper 28, “Obs.”), and Petitioners filed a
Response (Paper 30, “Obs. Resp.”). An oral hearing was held on February
24, 2016, and a transcript of the hearing is included in the record. Paper 33
(“Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This decision is a Final
Written Decision under 35 U.S.C. § 328(a) as to the patentability of claims
1, 5, and 11 of the ’280 patent. For the reasons discussed below, we hold
that Petitioners have demonstrated by a preponderance of the evidence that
these claims are unpatentable under §§ 102(b) and 103(a). We grant Patent
Owner’s Motion to Amend.
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B. Related Matters
The parties indicate that the ’280 patent has been asserted in the
following three district court cases: (1) ContentGuard Holdings, Inc. v.
Google Inc., No. 2:14-cv-00061-JRG-RSP (E.D. Tex.); (2) Google Inc. v.
ContentGuard Holdings, Inc., No. 3:14-cv-00498-WHA (N.D. Cal.); and
(3) ContentGuard Holdings, Inc. v. Amazon.com Inc., No. 2:13-cv-01112-
JRG (E.D. Tex.). Pet. 6–7;3 Paper 7, 1–2. In addition to this Petition,
Google filed another Petition in Case CBM2015-00043 requesting a review
under the transitional program for covered business method patents of a
certain subset of claims in U.S. Patent No. 8,001,053 B2 (“the ’053 patent)
owned by Patent Owner. Pet. 7; Paper 7, 1. In that related case, another
panel of the Board denied the Petition as to all challenged claims of the ’053
patent. Google Inc. v. ContentGuard Holdings, Inc., Case CBM2015-00043
(PTAB June 26, 2015) (Paper 9).
C. Standing
Section 18 of the AIA governs the transitional program for covered
business method patent reviews. Section 18(a)(1)(B) of the AIA limits such
reviews to persons, or their privies, that have been sued or charged with
infringement of a covered business method patent. Petitioners assert that,

3 The Petition and supporting evidence filed by Google in Case CBM2015-
00040 are essentially the same as the Petition and supporting evidence filed
by Apple in Case CBM2015-00160. For clarity and ease of reference, all
references to the Petition and supporting evidence throughout this Final
Written Decision are to the Petition and supporting evidence filed by Google
in Case CBM2015-00040.
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because they have been sued for infringement of the ’280 patent, they have
standing to file their respective Petitions. Pet. 8 (citing Ex. 1004). Based on
the record developed during trial, we maintain that Petitioners satisfy the
standing requirement. See Dec. on Inst. 3.
D. The ’280 Patent
The ’280 patent, titled “System and Method for Managing Transfer of
Rights using Shared State Variables,” issued August 10, 2010, from U.S.
Patent Application No. 10/956,121 (“the ’121 application”), filed on October
4, 2004. Ex. 1001, at [54], [45], [21], [22]. The ’280 patent is a
continuation-in-part of U.S. Patent Application No. 10/162,701 (“the ’701
application”), filed on June 6, 2002. Id. at [63]. The ’280 patent also claims
priority to numerous provisional applications, the earliest of which includes
U.S. Provisional Application No. 60/331,624 (“the ’624 provisional
application”), filed on November 20, 2001. Id. at [60].
The ’280 patent generally relates to a method and system for
managing the transfer of rights associated with digital works using shared
state variables. Ex. 1001, 1:18–20. According to the ’280 patent, one of the
most important issues impeding the widespread distribution of digital works
is the current lack of ability to enforce the rights of content owners during
the distribution and use of their digital works. Id. at 1:24–29. In particular,
content owners do not have control over downstream parties unless they are
privy to transactions with the downstream parties. Id. at 2:33–34. The
concept of content owners simply granting rights to others that are a subset
of the possessed rights is not adequate for multi-tier distribution models. Id.
at 2:45–48.
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The ’280 patent purportedly addresses these problems by providing a
method and system for transferring rights associated with items of content—
presumably digital works—from a supplier to a consumer. Ex. 1001, 2:52–
55. The consumer obtains a set of rights associated with the digital work,
which includes meta-rights specifying rights that may be derived therefrom.
Id. at 2:55–57. If the consumer is entitled to the rights derived from the
meta-rights, the disclosed invention then derives at least one right from the
meta-rights. Id. at 2:58–60. The rights that may be derived from the meta-
rights include at least one state variable based on the set of rights, which, in
turn, may be used to determine a state of the derived right. Id. at 2:62–64.
E. Illustrative Claim
Of the challenged claims remaining in this proceeding, only claim 1 is
independent. Claim 1 is directed to a method for transferring rights
associated with items from a rights supplier to a rights consumer. Claims 5
and 11 directly depend from independent claim 1. Independent claim 1 is
illustrative and is reproduced below:
1. A computer-implemented method for transferring
rights adapted to be associated with items from a rights supplier
to a rights consumer, the method comprising:
obtaining a set of rights associated with an item, the set
of rights including a meta-right specifying a right that can be
created when the meta-right is exercised, wherein the meta-
right is provided in digital form and is enforceable by a
repository;
determining, by a repository, whether the rights
consumer is entitled to the right specified by the meta-right; and
exercising the meta-right to create the right specified by
the meta-right if the rights consumer is entitled to the right
specified by the meta-right, wherein the created right includes
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at least one state variable based on the set of rights and used for
determining a state of the created right.

Ex. 1001, 15:7–22.
F. Covered Business Method Patent
Under § 18(a)(1)(E) of the AIA, we may institute a transitional review
proceeding only for a patent that is a covered business method patent. A
“covered business method patent” is a patent that “claims a method or
corresponding apparatus for performing data processing or other operations
used in the practice, administration, or management of a financial product or
service, except that the term does not include patents for technological
inventions.” AIA § 18(d)(1); see also 37 C.F.R. § 42.301 (defining
“[c]overed business method patent” and “[t]echnological invention”). For
purposes of determining whether a patent is eligible for a covered business
method patent review, the focus is on the claims. See Transitional Program
for Covered Business Method Patents—Definitions of Covered Business
Method Patent and Technological Invention, 77 Fed. Reg. 48,734, 48,736
(Aug. 14, 2012). A patent need have only one claim directed to a covered
business method to be eligible for review. Id. (Response to Comment 8).
1. Financial Product or Service
In promulgating rules for covered business method reviews, the U.S.
Patent and Trademark Office (“Office”) considered the legislative intent and
history behind the AIA’s definition of a “covered business method patent.”
77 Fed. Reg. at 48,735–36. The “legislative history explains that the
definition of covered business method patent was drafted to encompass
patents ‘claiming activities that are financial in nature, incidental to a
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financial activity or complementary to a financial activity.’” Id. at 48,735
(quoting 157 CONG. REC. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.
Schumer)). The legislative history indicates that “‘financial product or
service’ should be interpreted broadly.” Id.; see also Versata Dev. Grp., Inc.
v. SAP Am., Inc., 793 F.3d 1306, 1323–26 (Fed. Cir. 2015) (discussing the
scope of the term “covered business method patent” and, in particular, what
falls within the purview of a financial product or service).
In their Petitions, Petitioners contend that the challenged claims of the
’280 patent encompass embodiments that are, at the very least, incidental or
complementary to a financial activity. Pet. 10. In particular, Petitioners
argue that the invention embodied in independent claim 1 is described using
economic terms, such as the transfer of rights between a rights “supplier”
and a rights “consumer.” Id. In addition, Petitioners argue that this claim is
directed toward “obtaining a set of rights” by a consumer, including “meta-
rights” relating to an item such as a digital work. Id. at 10–11 (citing
Ex. 1001, 15:10–11). Petitioners then assert that the specification of the
’280 patent confirms the financial nature of a consumer acquiring a digital
work from a supplier, as required by independent claim 1. Id. at 11–12
(citing Ex. 1001, 4:3–14, 4:39–53, 5:4–11, 5:35–37).
In response, Patent Owner contends that the ’280 patent does not
claim a financial activity, but instead is context neutral. PO Resp. 28–29.
Patent Owner argues that, when addressing the financial product or service
aspect of covered business method patent eligibility in the Decision on
Institution, we did not analyze the method steps recited in the body of
independent claim 1, but instead only focused on the preamble, which
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recites, in relevant part, “transferring rights adapted to be associated with
items from a rights supplier to a rights consumer.” Id. at 29 (citing Dec. on
Inst. 9). Patent Owner then alleges that the preamble of independent 1
merely states the purpose or intended use of the invention and generally is
not treated as limiting. See id. at 29–30.
Patent Owner further contends that the activity of transferring rights
from a supplier to a consumer, by itself, is insufficient to characterize the
activity as financial in nature. PO Resp. 30. Patent Owner argues that, on
its face, none of the method steps recited in independent claim 1, much less
the preamble of this claim, bear any relation to a financial product or service.
Id. Patent Owner then acknowledges that the specification of the ’280 patent
discloses examples of paying fees in connection with the exercise of meta-
right and usage rights, but asserts that these examples are optional and not
required by independent claim 1. Id. at 31–32 (citing Ex. 1001, 4:3–14,
4:39–43, 5:4–11, 5:35–37). Patent Owner asserts that the specification also
discloses implementations of the invention that would be understood to not
involve the payment of a fee. Id. at 32 (citing Ex. 1001, 6:61–67, 7:6–17,
7:17–22,12:39–50, 14:41–44). According to Patent Owner, this reinforces
that the invention has general utility and has no particular relation to the
financial services sector. Id.
Lastly, Patent Owner contends that Petitioners merely assess whether
independent claim 1 encompasses a financial embodiment and does not
focus on what actually is claimed. PO Resp. 33–34. Patent Owner then
devotes a significant portion of its Response explaining how the facts of this
case either align, or are distinguishable from, a number of previous Board
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decisions that assessed the “financial product or service” component of
covered business method patent eligibility. Id. at 34–38.
Petitioners counter that independent claim 1 of the ’280 patent covers
a financial activity because it enables the commercial distribution of digital
content from a supplier, via distributors and retailers, to a consumer.
Pet. Reply 2. According to Petitioners, the very purpose of this scheme is to
enable financial transactions where a “rights consumer” purchases rights
from a “rights supplier.” Id. at 3 (citing Ex. 1001, 15:5–22). Petitioners
argue that the specification of the ’280 patent describes numerous
embodiments where a rights consumer purchases rights from a rights
supplier. Id. at 3–4 (citing Pet. 10–12; Dec. on Inst. 9–10). Consequently,
Petitioners assert that there is sufficient evidence to support our initial
determination that independent claim 1 covers an activity “that, at the very
least, is incidental or complementary to a financial activity.” Id. at 4 (citing
Dec. on Inst. 9–10).
Petitioners also disagree with Patent Owner’s assertion that, in order
to be eligible for a covered business method patent review, a claim must
necessarily cover only financial activities or an activity incidental or
complementary to a financial activity, and not other kinds of activities. Pet.
Reply 4. Petitioners argue that nothing in § 18(d)(1) of the AIA limits
covered business method patent eligibility in this way. See id. Petitioners
also contend that the previous Board decisions cited by Patent Owner that
address the “financial product or service” component of covered business
method patent eligibility are distinguishable from this case because the ’280
patent does not describe or claim an invention with general utility that might
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theoretically apply in a financial context. Id. at 5. Instead, Petitioners assert
that the central purpose of the ’280 patent is to control the sale of rights in
multi-tiered distribution schemes. Id. (citing Ex. 1001, 2:22–48).
Upon considering the information presented by Petitioners, as well as
the arguments presented by Patent Owner, we maintain our initial
determination that independent claim 1 of the ’280 patent satisfies the
“financial product or service” component of the definition for a covered
business method patent set forth in § 18(d)(1) of the AIA. Dec. on Inst. 7–
10. We begin our analysis by focusing on the language of independent
claim 1 and, in particular, the recitation in the preamble of “[a] computer-
implemented method for transferring rights adapted to be associated with
items from a rights supplier to a rights consumer.” Ex. 1001, 15:7–9
(emphasis added). The transfer of rights associated with an item from a
supplier to a consumer is an activity that, at the very least, is incidental or
complementary to a financial activity.
Our determination in this regard is further supported by the
description of the invention in the specification of the ’280 patent. For
example, the specification discloses that the transfer of rights associated with
an item from a supplier to a consumer may require the payment of a fee or
processing by a clearinghouse. See, e.g., Ex. 1001, 4:3–14 (disclosing how a
consumer is permitted to view the digital works it purchased for a fee of $5
or, alternatively, view and print the digital content for a fee of $10), 4:39–43
(disclosing how a right specified in a license may include payment of a fee),
5:4–11 (disclosing that, when a consumer wishes to obtain a digital work,
the consumer may go through a series of steps, including paying a fee),
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5:35–37 (disclosing the use of a clearinghouse to process payment
transactions). These cited disclosures in the specification reinforce that the
transfer of rights associated with an item from a supplier to a consumer is, at
the very least, incidental or complementary to a financial activity.
To the extent Patent Owner argues that we narrowly focused on non-
limiting language in the preamble of independent claim 1 and ignored the
method steps recited in the body of this claim (PO Resp. 29–30), we do not
agree. In considering whether a preamble limits a claim, the preamble is
analyzed to ascertain whether it states a necessary and defining aspect of the
invention, or whether it is simply an introduction to the general field of the
claim. On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331,
1343 (Fed. Cir. 2006); see also Bicon, Inc. v. Straumann Co., 441 F.3d 945,
952 (Fed. Cir. 2006) (explaining that whether a preamble limits a claim is
determined on a claim-by-claim basis). “When limitations in the body of the
claim rely upon and derive antecedent basis from the preamble, then the
preamble may act as a necessary component of the claimed
invention.” Eaton Corp. v. Rockwell Int’l Corp., 323 F.3d 1332, 1339 (Fed.
Cir. 2003). Here, the recitation in the preamble of “a rights consumer”
provides antecedent basis for the same claim phrase recited in the body of
independent claim 1. We also view the recitation in the preamble of “a
rights supplier” as reciting an essential element of the invention embodied in
independent claim 1 because a consumer and a supplier are bound
inextricably. This consumer/supplier relationship provides the necessary
context for the method steps of “obtaining,” “determining,” and
“exercising.”
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We also do not agree with Patent Owner’s argument that the invention
embodied in independent claim 1 has general utility and has no particular
relation to the financial services sector. PO Resp. 31–32. Patent Owner’s
argument in this regard is predicated on the notion that independent claim 1
must necessarily cover only financial activities, and not other kinds of
activities. We agree with Petitioners that there is nothing in § 18(d)(1) that
suggests covered business method patent eligibility should be limited in this
way. See Pet. Reply. 4. The U.S. Court of Appeals for the Federal Circuit
has explained that, as a matter of statutory construction, the definition of
“covered business method patent” covers a wide range of finance-related
activities. Versata, 793 F.3d at 1325. This statutory definition makes no
reference to requiring a claim to only cover financial-related activities, and
not other kinds of activities. See id. As we explained above, independent
claim 1 satisfies this statutory definition because it recites a
consumer/supplier relationship. The specification of the ’280 patent
reinforces that this consumer/supplier relationship, at least in some
instances, requires the payment of a fee or processing by a clearinghouse,
both of which are activities that are financial in nature.
Lastly, we do not agree with Patent Owner’s argument that previous
Board decisions demonstrate that independent claim 1 of the ’280 patent
does not satisfy the “financial product or service” component of covered
business method patent eligibility. PO Resp. 33–39. The previous Board
decisions cited by Patent Owner are not precedential and not binding on this
panel. Nonetheless, we have reviewed these purportedly conflicting
decisions. Our review of these decision, however, reveals that the
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determination of whether a patent is a covered business method patent that is
eligible for review rests upon the specific facts of each case. We agree with
Petitioners that the previous Board decisions cited by Patent Owner are
distinguishable from this case in at least one significant respect. See Pet.
Reply 5. The stated objective of the ’280 patent and, in particular, the
explicit requirements of independent claim 1, is to control the distribution or
resale of rights associated with an item from a supplier to a consumer in a
multi-tiered distribution scheme (Ex. 1001, 2:22–48, 15:7–22), whereas the
patents involved in the previous Board decisions cited by Patent Owner only
include claims with general utility that do not relate necessarily to activities
that are financial in nature.
We, therefore, maintain our initial determination that Petitioners have
explained sufficiently why the transfer of rights associated with an item from
a supplier to a consumer, as required by independent claim 1, satisfies the
“financial product or service” component of the definition for a covered
business method patent set forth in § 18(d)(1) of the AIA.
2. Technological Invention
The definition of a “covered business method patent” in § 18(d)(1) of
the AIA does not include patents for “technological inventions.” When
determining whether a patent is for a “technological invention,” we consider
the following: “whether the claimed subject matter as a whole [(1)] recites a
technological feature that is novel and unobvious over the prior art; and [(2)]
solves a technical problem using a technical solution.” 37 C.F.R.
§ 42.301(b). The following claim drafting techniques typically do not render
a patent a “technological invention”:
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(a) Mere recitation of known technologies, such as
computer hardware, communication or computer networks,
software, memory, computer-readable storage medium,
scanners, display devices or databases, or specialized machines,
such as an ATM or point of sale device.
(b) Reciting the use of known prior art technology to
accomplish a process or method, even if that process or method
is novel and non-obvious.
(c) Combining prior art structures to achieve the normal,
expected, or predictable result of that combination.

Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,763–64 (Aug.
14, 2012) (“Practice Guide”).
In their Petitions, Petitioners assert that the subject matter of
independent claim 1, as a whole, does not recite a technological feature that
is novel and unobvious. Pet. 16. To support their assertion, Petitioners
contend that the specification of the ’280 patent discloses that the technology
used to accomplish the method steps recited in independent claim 1 is old
and well known. Id. at 16–17 (citing Ex. 1001, 3:15–16, 3:55–58, 6:27–31,
9:28–32, 14:50–67, Fig. 1). For instance, Petitioners argue that, as
evidenced by the asserted prior art, the claimed features such as a
“repository” and “rights language” are old and well known. Id. at 18–19.
Petitioners then assert that the method steps recited in independent claim 1,
either taken individually or collectively, do not recite a novel way of
processing or transmitting rights associated with an item from a supplier to a
consumer. See id. at 19–20.
In response, Patent Owner contends that independent claim 1 recites a
number of novel technical features. PO Resp. 41. According to Patent
Owner, the meta-rights construct is a novel feature that, when implemented
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with repositories and state variables, imparts new or enhanced functionality
that was not known at the time of the ’280 patent. Id. at 41–42. Patent
Owner further asserts that known prior art repositories support only usage
rights and not meta-rights. Id. at 45. Patent Owner also asserts that neither
the meta-rights construct, nor repositories designed to enforce meta-rights,
where known prior to the ’280 patent. Id.
Petitioners counter by contending that the record as developed during
trial supports our initial determination that the ’280 patent does not claim a
novel and unobvious technological feature. Pet. Reply 6 (citing Dec. on
Inst. 12). In particular, Petitioners argue that the ’280 patent admits that
meta-rights may be implemented in pre-existing technologies by stating that
“the mechanism for exercising and enforcing a meta-right can be the same as
that for a usage right,” and it identifies, as one example, the mechanism
described in U.S. Patent No. 5,634,012 (“Stefik”), which is the prior art that
serves as the basis of the grounds instituted in this trial. Id. (citing Ex. 1001,
7:36–39). Petitioners also argue that the ’280 patent admits that meta-rights
are an extension of the pre-existing concept of rights, as taught by Stefik. Id.
(citing Ex. 1001, 5:43–47). Consequently, Petitioners assert that a meta-
right is simply another type of right and, at a fundamental level, it is simply
a pre-existing software construct. Id. at 6–7 (citing Ex. 1014 ¶¶ 38–42).
Upon considering the information presented by Petitioners, as well as
the arguments presented by Patent Owner, we maintain our initial
determination that the subject matter of independent claim 1, as a whole,
does not recite a technological feature that is novel and unobvious over the
prior art. Dec. on Inst. 10–12. As we explained in the Decision on
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Institution, based on our assessment of independent claim 1, the only feature
recited in the body of the claim that resembles a technological feature is the
claimed “repository.” The claimed “repository,” however, does not direct
independent claim 1 to a technological invention because, as evidenced by
Stefik, this feature was not novel and unobvious as of the earliest effective
filing date of the ’280 patent. See Ex. 1002, 12:42–13:41, 54:24–27. In
addition, regardless of whether the method steps of “obtaining,”
“determining,” and “exercising” recited in independent claim 1 impart a
novel and unobvious way of enforcing or exercising rights associated with
an item from a supplier to a consumer, this claim only uses known prior art
technology—namely, the claimed “repository”—to accomplish this method.
We do not agree with Patent Owner’s argument that known prior art
repositories were incapable of implementing and enforcing meta-rights. PO
Resp. 45. We also do not agree with Patent Owner’s argument that, when
meta-rights are implemented in a repository, they impart new or enhanced
functionality that was not known at the time of the ’280 patent. Id. at 42–43.
Patent Owner’s arguments in this regard are undermined by an admission in
the specification of the ’280 patent. The specification states that “the
mechanism for exercising and enforcing a meta-right can be the same as that
for a usage right. For example, the mechanism disclosed in [Stefik] can be
used.” Ex. 1001, 7:36–39 (emphasis added). Based on this admission in the
specification, we agree with Petitioners that repositories, such as those
taught by Stefik, exercise and enforce meta-rights. See Pet. Reply 6.
Moreover, Patent Owner does not direct us to, nor can we find, sufficient or
credible evidence to support its assertion that the implementation of meta-
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rights in Stefik’s repositories somehow imparts new or enhanced
functionality beyond that already contemplated by Stefik.
The parties also present arguments directed to whether independent
claim 1 solves a technical problem using a technical solution, which is the
second factor involved in determining whether a patent is for a
“technological invention.” Pet. 20–25; PO Resp. 42–43, 47; Pet. Reply 7.
We, however, need only assess whether one of the factors set forth in
37 C.F.R. § 42.301(b) is deficient to determine whether independent claim 1
is not for a “technological invention.”4 Based on the record developed
during trial, we maintain our initial determination that Petitioners have
explained sufficiently why independent claim 1, as a whole, does not recite a
technological feature that is novel and unobvious over the prior art and,
therefore, we are satisfied that Petitioners have met their burden of
demonstrating that the ’280 patent is not for a “technological invention.”
3. Summary
Because we have determined that independent claim 1 of the ’280
patent satisfies the “financial product or service” component of the
definition for a covered business method patent, and it is not for a

4 The legislative history of the AIA supports this interpretation of the
“technological invention” exception. See, e.g., 157 Cong. Rec. S1364 (daily
ed. Mar. 8, 2011) (Sen. Schumer stated the “‘technological invention[]’
exception only excludes those patents whose novelty turns on a
technological innovation over the prior art and are concerned with a
technical problem which is solved with a technical solution . . . .” (emphases
added)).
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“technological invention,” the ’280 patent is a covered business method
patent eligible for review.
G. Prior Art Relied Upon
Petitioners rely upon the following prior art reference:
Inventor U.S. Patent No. Dates Exhibit No.
Stefik 5,634,012 issued May 27, 1997,
filed Nov. 23, 1994
1002
H. Instituted Grounds of Unpatentability
We instituted this proceeding based on the asserted grounds of
unpatentability (“grounds”) set forth in the table below. Dec. on Inst. 43.
Reference(s) Basis Claims Challenged
Stefik § 102(b) 1, 5, and 11
Stefik and the knowledge of
one of ordinary skill in the art
§ 103(a) 1, 5, and 11

II. ANALYSIS
A. Claim Construction
In a covered business method patent review proceeding, we interpret
claim terms in an unexpired patent according to the broadest reasonable
interpretation in light of the specification of the patent in which it appears.
37 C.F.R. § 42.300(b); cf. Cuozzo Speed Techs., LLC v. Lee, No. 15–446,
2016 WL 3369425, at *12 (U.S. June 20, 2016) (upholding the use of the
broadest reasonable interpretation standard as the claim construction
standard to be applied in an inter partes review proceeding). Under the
broadest reasonable interpretation standard, we give claim terms their
ordinary and customary meaning, as would be understood by one of ordinary
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skill in the art, in the context of the entire disclosure. In re Translogic Tech.,
Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). A claim term, however, “will
not receive its ordinary meaning if the patentee acted as his own
lexicographer and clearly set forth a definition of the disputed claim term in
either the specification or prosecution history.” CCS Fitness, Inc. v.
Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002). Although the
patentee indeed is free to define the specific claim terms used to describe his
or her invention, “this must be done with reasonable clarity, deliberateness,
and precision.” In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
1. Claim Terms Construed in the Decision on Institution
In their Petitions, Petitioners proposed a construction for each of the
following claim terms: (1) “meta-right” (all challenged claims); (2) “rights”
(all challenged claims); (3) “license” (claim 11); (4) “state variable” (all
challenged claims); and (5) “repository” (all challenged claims). Pet. 27–36.
In response, Patent Owner proposed a construction for the following terms:
(1) “meta-right”; (2) “usage right” (no challenged claims); (3) “rights”; (4)
“license”; (5) “state variable”; and (6) “repository.” Prelim. Resp. 30–38.
The parties generally agreed on the constructions offered for the claim terms
“rights” and “license.” Compare Pet. 30–31, with Prelim Resp. 33–34.
Patent Owner also admitted that the term “usage right” is not recited
explicitly in the challenged claims of the ’280 patent. Prelim. Resp. 32. For
purposes of the Decision on Institution, we only assessed the constructions
offered by the parties for the claim terms “meta-right,” “state variable,” and
“repository.” Dec. on Inst. 15–21.
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In its Response, Patent Owner contests the claim terms “repository”
and “meta-right” that we construed in the Decision on Institution. PO Resp.
16–26. In their Reply, Petitioners only focus on the claim term “meta-right,”
and argue that we should maintain our construction of this claim term
articulated in the Decision on Institution. Pet. Reply 7–8. Given that the
parties agree on the constructions of the claim terms “rights” and “license,”
and accept our construction of “state variable” in the Decision on Institution,
we discern no reason to address or alter those constructions for purposes of
this Final Written Decision. For convenience, those constructions are
reproduced in the table below.
Claims Claim Term Claim Construction
1, 5, and 11 “rights” “a usage right or a meta-right”
1, 5, and 11 “license” “data embodying a grant of
rights”
1, 5, and 11 “state variable” “a variable having a value that
represents status of rights, or
other dynamic conditions”
We separately address the parties’ contentions regarding the claim terms
“repository” and “meta-right” in turn.
2. “repository” (all challenged claims)
Independent claim 1 recites, in relevant part, “determining, by
a repository,” whether the rights consumer is entitled to the right specified
by the meta-right.” Ex. 1001, 15:15–16 (emphasis added). In the Decision
on Institution, we construed the claim term “repository” as “a trusted system
which maintains physical, communications, and behavioral integrity, and
supports usage rights.” Dec. on Inst. 21. We further defined “physical
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integrity” as “preventing access to information by a non-trusted system”;
“communications integrity” as “only communicates with other devices that
are able to present proof that they are trusted systems, e.g., by using security
measures such as encryption, exchange of digital certificates, and nonces”;
and “behavioral integrity” as “requiring software to include a digital
certificate in order to be installed in the repository.” Id.
In its Response, Patent Owner generally agrees with our construction
of the claim term “repository,” but argues that this claim term is described
more accurately as “a trusted system in that it maintains physical,
communications, and behavioral integrity in the support of usage rights.”
PO Resp. 17. According to Patent Owner, this construction better aligns
with the definition of repository in the glossary section of Stefik, which is
incorporated by reference in the ’280 patent. Id. (citing Ex. 1002, 53:23–
27). With the exception of two additional clarifications, Patent Owner also
agrees with our construction of “communications integrity,” “behavioral
integrity,” and “physical integrity.” Id. at 17–18. In particular, Patent
Owner agrees with our construction of “behavioral integrity,” with the
understanding that “a digital certificate is an assurance that downloaded
software comes from a trusted source known to the repository,” and Patent
Owner agrees with our construction of “physical integrity,” with the
understanding that “the information of which access is prevented is ‘content’
(or secret information of the repository itself).” Id. (citing Ex. 2009 ¶ 52).
In their Reply, Petitioners do not address separately Patent Owner’s
proposed construction for the claim term “repository,” but Petitioners note
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that they disagree with Patent Owner’s interpretation of “behavioral
integrity.” Pet. Reply. 8.
We need not assess the parties’ differences regarding the construction
of the claim term “repository,” and its corresponding “communications
integrity,” “behavioral integrity,” and “physical integrity,” because both
parties agree that, regardless of the exact construction of this claim term,
Stefik discloses a repository. Pet. Reply 8 (stating that, “regardless of the
exact claim construction used, Stefik undisputedly discloses the
‘repository’”); Tr. 33:19–34:6 (upon inquiry from the panel regarding
whether Patent Owner agrees with the construction for the claim term
“repository” articulated in the Decision on Institution, counsel stated “I don’t
believe it makes a difference to the [patentability] issue in this case because
we do acknowledge that under any definition Stefik discloses a repository”).
In summary, we maintain that the claim term “repository” should be
construed as “a trusted system which maintains physical, communications,
and behavioral integrity, and supports usage rights.” We further define
“physical integrity” as “preventing access to information by a non-trusted
system”; “communications integrity” as “only communicates with other
devices that are able to present proof that they are trusted systems, e.g., by
using security measures such as encryption, exchange of digital certificates,
and nonces”; and “behavioral integrity” as “requiring software to include a
digital certificate in order to be installed in the repository.”
3. “meta-right” (all challenged claims)
Independent claim 1 recites, in relevant part, “obtaining a set rights
associated with an item, the set of rights including a meta-right specifying a
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right that can be created when the meta-right is exercised, wherein the meta-
right is provided in digital form and is enforceable by a repository.”
Ex. 1001, 15:10–14 (emphases added). In the Decision on Institution, based
on the explicit definition set forth in the specification of the ’280 patent (id.
at 5:47–49), we construed the claim term “meta-right” as “a right that one
has to generate, manipulate, modify, dispose of or otherwise derive another
right.” Dec. on Inst. 17.
In its Response, Patent Owner disagrees with our construction of the
claim term “meta-right” in the Decision on Institution, and continues to
advocate that we should adopt the district court construction of “a right that,
when exercised, creates or disposes of usage rights (or other meta-rights) but
that is not itself a usage right because exercising a meta-right does not result
in action to content.” PO Resp. 18. Patent Owner contends that, contrary to
our explanation in the Decision in Institution, the language in its proposed
construction that it “is not itself a usage right because exercising a meta-
right does not result in action to content” would not impart extraneous
limitations into independent claim 1. Id. at 19. According to Patent Owner,
at least two of the cases we cited in the Decision on Institution support its
proposed construction because both cases instruct that it is proper to consult
the entire specification of the ’280 patent to interpret what the patentee
meant by the claim term “meta-right.” See id. at 19–22. Patent Owner
asserts that our initial construction of this claim term does not reflect its full
meaning as expressed in the specification with reasonable clarity and
deliberateness. Id. at 22.
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Patent Owner further contends that the statement in the specification
of the ’280 patent that “[m]eta-rights are the rights that one has to generate,
manipulate, modify, and dispose of or otherwise derive other rights” is a
fundamental characteristic of a meta-right. PO Resp. 23 (alteration in
original) (quoting Ex. 1001, 5:47–49; Dec. on Inst. 16). Patent Owner,
however, argues that there is nothing in this cited disclosure of the
specification that suggests it expresses the full meaning of the claim term
“meta-right.” Id. Patent Owner further argues that the specification goes on
to state another fundamental characteristic of the claim term “meta-right”—
namely, a meta-right is distinct from a usage right in that the exercise of a
meta-right does not result in actions to content. Id. (citing Ex. 1001, 7:24–
30; Ex. 2009 ¶ 56). Patent Owner asserts that, because the distinction
between meta-rights and usage rights is expressed clearly and unequivocally
in the specification, this distinction should be reflected in the broadest
reasonable interpretation of the claim term “meta-right.” Id. at 24–25.
Petitioners counter that we should maintain our construction of the
claim term “meta-right” articulated in the Decision on Institution, and not
adopt the district court construction advocated by Patent Owner, because the
district court included additional language in its construction to aid the jury,
which is unnecessary in this proceeding because there is no risk we will be
confused by our own construction. Pet. Reply 7–8. Petitioners argue that, as
we correctly determined in the Decision on Institution, independent claim 1
adequately identifies the actions taken by the claim term “meta-right,” and
additional language is not needed to give meaning to this claim term. Id. at
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8. Lastly, Petitioners note that we apply a different claim construction
standard than the district court. Id. (citing Versata, 793 F.3d at 1328).
Upon considering the information presented by Petitioners, as well as
the arguments presented by Patent Owner, we decline Patent Owner’s
invitation to adopt the district court’s construction of the claim term “meta-
right” for purposes of this Final Written Decision. Although a district
court’s construction of the claim term “meta-right” is instructive, we
nevertheless are not bound by that construction. See Power Integrations,
Inc. v. Lee, 797 F.3d 1318, 1326 (Fed. Cir. 2015) (“There is no dispute that
the board is not generally bound by a prior judicial construction of a claim
term.”). We observe that the parties’ arguments and supporting evidence
submitted here are different than those presented in the related district court
case. Notably, before the U.S. District Court for the Eastern District of
Texas, the parties’ dispute regarding the claim term “meta-right” centered on
whether the construction of this claim term should include a “data structure.”
Ex. 2001, 102–05. In any event, we have reviewed and considered the
district court’s “Memorandum Opinion and Order” insofar as its reasoned
analysis is relevant to the issues before us regarding the patentability of the
claims at issue and the claim term “meta-right” in dispute here. See Power
Integrations, 797 F.3d at 1326 (“The fact that the board is not generally
bound by a previous judicial interpretation of a disputed claim term does not
mean, however, that it has no obligation to acknowledge that interpretation
or to assess whether it is consistent with the broadest reasonable construction
of the term.”).
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As we explained in the Decision on Institution, the specification of the
’280 patent provides an explicit definition for the claim term “meta-right.”
Dec. on Inst. 16. In particular, the specification discloses that “[m]eta-rights
are the rights that one has to generate, manipulate, modify, dispose of or
otherwise derive other rights.” Ex. 1001, 5:47–49. By using the verb “are”
following “meta-rights,” the specification sets forth an explicit definition for
this claim term with reasonable clarity, deliberateness, and precision. See
Paulsen, 30 F.3d at 1480. Notably, nothing in the specification contradicts
this definition of the claim term “meta-right” or suggests another definition
for this claim term. We, therefore, do not agree with Patent Owner’s
argument that this cited disclosure in the specification is only one of many
fundamental characteristics pertaining to a meta-right. PO Resp. 23.
Although we agree with Patent Owner that it is proper to consult the
entire specification of the ’280 patent to interpret what the patentee meant by
the claim term “meta-right” (PO Resp. 19–22), we do not agree with Patent
Owner’s argument that the specification further defines the claim term
“meta-right” to import a negative limitation into the claims—namely, “a
right that . . . is not itself a usage right because exercising a meta-right does
not result in action to content” (id. at 23–25). For convenience, the relevant
portion of the specification relied upon by Patent Owner is reproduced
below:
At a high level the process of enforcing and exercising
meta-rights are the same as for usage rights. However, the
difference between usage rights and meta-rights are the result
from exercising the rights. When exercising usage rights,
actions to content result. . . . When meta-rights are exercised,
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new rights are created from the meta-rights or existing rights
are disposed as the result of exercising the meta-rights.

Ex. 1001, 7:23–31 (emphasis added).
At the outset, we note that this cited portion of the specification only
focuses on the difference between meta-rights and usage rights, but does not
use particular language that would suggest the specification clearly sets forth
another fundamental characteristic of the claim term “meta-right.” Indeed,
the cited portion of the specification does not state explicitly that exercising
meta-rights does not result in actions to content, much less further define the
claim term “meta-right” to import a negative limitation with reasonable
clarity, deliberateness, and precision. Instead, the cited portion of the
specification merely states that exercising meta-rights results in the creation
of new rights or the disposal of existing rights.
Patent Owner’s argument is predicated on the notion that, because the
specification states that, “[w]hen exercising usage rights, actions to content
result,” the converse necessarily implies to meta-rights—namely, exercising
meta-rights does not result in actions to content. In our view, Patent Owner
engages in a post hoc attempt to import a negative limitation into the claims
by impermissibly incorporating language not present in specification into the
definition of the claim term “meta-right.” The Federal Circuit has cautioned
that, although it is proper to consult the specification to interpret what a
patentee meant by a particular claim term, this should not be confused with
adding an extraneous feature, which, of course, is improper. Paulsen, 30
F.3d at 1480. Similar to our explanation in the Decision on Institution, we
maintain that Patent Owner’s attempt to redefine the claim term “meta-right”
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by distinguishing it from a usage right is not necessary to give meaning to
this claim term, and should not be read into claims that recite this feature.
See Dec. on Inst. 17.
For essentially the same reasons discussed above, we do not agree
with the supporting testimony of Patent Owner’s declarant, David Martin,
Ph.D. Ex. 2009 ¶ 56. Although we recognize the distinction between meta-
rights and usage rights that Dr. Martin highlights in his cited testimony, this
distinction, by itself, does not rise to the level of further defining the claim
term “meta-right” with reasonable clarity, deliberateness, and precision. Put
simply, Dr. Martin’s attempt to redefine the claim term “meta-right” by
distinguishing it from a usage right is not necessary to give meaning to this
claim term, and should not be read into claims that recite this feature.
In summary, we decline to import a negative limitation into the
claims, as urged by Patent Owner, but instead maintain our initial
construction of the claim term “meta-right” as “a right that one has to
generate, manipulate, modify, dispose of or otherwise derive another right,”
which is consistent with the explicit definition set forth in the specification
of the ’280 patent. Dec. on Inst. 17.
B. Anticipation by Stefik
Petitioners contend that claims 1, 5, and 11 are anticipated under
§ 102(b) by Stefik. Pet. 56–71; Pet. Reply 9–21. In particular, Petitioners
explain how Stefik describes the subject matter of each challenged claim.
Pet. 56–71; Pet. Reply 9–21. Petitioners also rely upon both Dr. Goldberg’s
Declaration accompanying the Petition (Ex. 1014 ¶¶ 58–88) and Dr.
Goldberg’s Rebuttal Declaration (Ex. 1032 ¶¶ 9–19) accompanying the
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Reply to support their positions. In its Response, Patent Owner presents
arguments that only focus on independent claim 1. PO Resp. 47–63. Patent
Owner relies upon Dr. Martin’s Declaration (Ex. 2009 ¶¶ 59–96) to support
is positions.
We begin our analysis with the principles of law that generally apply
to a ground based on anticipation, followed by a brief overview of Stefik,
and then we address the parties’ arguments directed to independent claim 1.
1. Principles of Law
To establish anticipation, “all of the elements and limitations of the
claim must be shown in a single prior reference, arranged as in the claim.”
Karsten Mfg. Corp. v. Cleveland Golf Co., 242 F.3d 1376, 1383 (Fed. Cir.
2001). “[A] reference can anticipate a claim even if it ‘d[oes] not expressly
spell out’ all the limitations arranged or combined as in the claim, if a person
of skill in the art, reading the reference, would ‘at once envisage’ the
claimed arrangement or combination.” Kennametal, Inc. v. Ingersoll Cutting
Tool Co., 780 F.3d 1376, 1381 (Fed. Cir. 2015) (second alteration in
original) (quoting In re Petering, 301 F.2d 676, 681 (CCPA 1962)). We
analyze this asserted ground based on anticipation with the principles stated
above in mind.
2. Stefik Overview
The invention disclosed in Stefik generally relates to distributing and
enforcing usage rights for digital works. Ex. 1002, 1:24–25. A digital work
refers to any work that has been reduced to a digital representation,
including any audio, video, text, or multimedia work, and any accompanying
interpreter, e.g., software, which may be required to recreate or render the
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content of the digital work. Id. at 6:35–39. Usage rights refer to rights
granted to a recipient of a digital work that define the manner in which a
digital work may be used and distributed. Id. at 4:6–8, 6:41–45. According
to Stefik, objectives of the disclosed invention include the following:
(1) providing the owner of a digital work the flexibility to distribute the
digital work as desired; and (2) a distribution system that transports a means
for billing with the digital work. Id. at 3:15–17, 3:65–67.
Stefik discloses permanently attaching usage rights to the digital
work. Ex. 1002, 6:50–51. Copies of the digital work also will have the
usage rights attached thereto. Id. at 6:51–52. Hence, any usage rights and
associated fees assigned by the creator and subsequent distributor of the
digital work always will remain with the digital work. Id. at 6:52–55. Stefik
further discloses that repositories enforce the usage rights of digital works.
Id. at 6:56–57. In particular, repositories store digital works, control access
to digital works, bill for access to digital works, and maintain the security
and integrity of the digital works stored therein. Id. at 6:57–60.
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Figure 1 of Stefik, reproduced below, illustrates the basic operations
of the disclosed invention. Ex. 1002, 4:35–37, 7:5–7.

As shown in step 101 of Figure 1, a creator creates a digital work. Id. at
7:7–8. At step 102, the creator determines the appropriate usage rights and
fees, attaches them to the digital work, and stores the digital work with the
associated usage rights and fees in repository 1. Id. at 7:8–10. At step 103,
repository 1 receives a request to access the digital work from repository 2.
Id. at 7:15–16. Such a request, or session initiation, includes steps that help
ensure that repository 1 and repository 2 are trustworthy. Id. at 7:16–18. At
step 104, repository 2 requests access to the digital work stored in repository
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1 for a stated purpose, e.g., to print the digital work or obtain a copy of the
digital work. Id. at 7:18–21. At step 105, repository 1 checks the usage
rights associated with the digital work stored therein to determine if access
to the digital work may be granted. Id. at 7:21–25. At step 106, if access is
denied, repository 1 terminates the session with repository 2 by transmitting
an error message. Id. at 7:29–30. At step 107, if access is granted,
repository 1 transmits the digital work to repository 2. Id. at 7:30–32. At
step 108, both repositories 1 and 2 generate billing information prior to
transmitting this information to a credit server. Id. at 7:33–35.
Figure 15 of Stefik, the relevant portion of which is reproduced
below, lists the usage rights grammar elements used by the disclosed
invention. Ex. 1002, 5:10–11, 19:66–67.

This portion of Figure 15 illustrates grammar element 1509 “Next-Set-of-
Rights” (“NSOR”), which define how rights are carried forward for a copy
of a digital work. Id. at 21:47–50. If the NSOR is not specified, the rights
for the next copy are same as those of the current copy. Id. at 21:50–52.
Otherwise, the set of rights for the next copy may be specified. Id. at 21:52–
53. Versions of rights after the “Add:” field may be added to the current set
of rights, whereas version of rights after the “Delete:” field may be deleted
from the current set of rights. Id. at 21:52–55. Versions of rights after the
“Replace:” field subsume all versions of rights of the same type in the
current set of rights. Id. at 21:57–59.
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3. Claim 1
In their Petitions, Petitioners contend that Stefik describes each of the
three method steps recited in independent claim 1. Pet. 63–70. In particular,
Petitioners argue that, when Stefik discloses that a creator of a work attaches
usage rights to a digital work and stores them in a repository, Stefik
effectively describes “obtaining a set of rights associated with an item,” as
recited in independent claim 1. Id. at 63 (citing Ex. 7:5–37, 35:57–37:49).
Petitioners then argue that Stefik’s NSOR amounts to “a meta-right
specifying a right that can be created when the meta-right is exercised,” as
recited in independent claim 1. Id. at 64–65 (citing Ex. 1002, 20:46–62,
26:67–27:5, 36:54–37:49, Fig. 15). Petitioners assert that, similar to the
claimed “meta-right,” Stefik’s NSOR determines the rights associated with a
copied digital work after it has been transported or, if no such rights are
specified, ensures that the rights on the transported copy are the same as the
original copy. Id. at 64 (citing Ex. 1002, 20:51–54). Petitioners also argue
that, because the enforcement elements of Stefik are embodied in
repositories, Stefik describes “the meta-right is provided in digital form and
is enforceable by a repository,” as recited in independent claim 1. Id. at 65
(citing Ex. 1002, 6:56–61, 12:41–51, 14:62–15:19).
Petitioners further argue that Stefik’s disclosure of repository 1
determining whether repository 2 should be granted access to a digital work
describes “determining, by a repository, whether the rights consumer is
entitled to the right specified by the meta-right,” as recited in independent
claim 1. Pet. 65–66 (citing Ex. 1002, 7:5–7, 7:23–29). Petitioners argue
that, before Stefik’s repository 1 transmits the digital work to repository 2, it
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performs a number of general tests to confirm that the requirements imposed
on the digital work are met. Id. at 68 (citing Ex. 1002, 32:22–24). If those
tests are met, Petitioners argue that Stefik’s repository 1 exercises the meta-
right by transmitting a copy of the digital work with rights as specified by
the NSOR to repository 2. Id. (citing Ex. 1002, 21:47–59, 36:9–13, 36:38–
41, 37:5–9). Based on these cited disclosures, Petitioners assert that Stefik
describes “exercising the meta-right to create the right specified by the meta-
right if the rights consumer is entitled to the right specified by the meta-
right,” as recited in independent claim 1. See id. Lastly, Petitioners argue
that Stefik’s Copy Count and Copies-in-Use amount to “at least one state
variable based on the set of rights and used for determining a state of the
created right,” as recited in independent claim 1. Id. at 69 (citing Ex. 1002,
26:67–27:5).
In Response, Patent Owner presents a number of patentability
arguments directed to independent claim 1. PO Resp. 50–63. We address
each of Patent Owner’s arguments in turn.
a. Stefik’s NSOR constitutes the claimed “meta-right”
Independent claim 1 recites, in relevant part, “a meta-right specifying
a right that can be created when the meta-right is exercised.” Ex. 1001,
15:11–12.
In its Response, Patent Owner disagrees with Petitioners’ assertion
that Stefik’s NSOR, which is encapsulated within a usage right, constitutes
the claimed “meta-right.” PO Resp. 52. Patent Owner argues that Stefik’s
NSOR is not itself an exercisable right, which purportedly is a requirement
of a meta-right. Id. at 52–53. According to Patent Owner, Dr. Martin’s
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testimony confirms that Stefik’s NSOR is not itself an exercisable right, but
instead, when exercising the encapsulating usage right, Stefik’s system
merely consults the NSOR to populate the next set of rights. Id. at 53 (citing
Ex. 2009 ¶ 68).
According to Patent Owner, Dr. Martin’s testimony also confirms that
Stefik’s NSOR cannot be interpreted as a separate or independent right.
PO Resp. 54 (citing Ex. 2009 ¶¶ 70–73). Patent Owner asserts that, based
on Stefik’s entire disclosure, a person of ordinary skill in the art would have
understood that a NSOR is merely a parameter describing certain aspects of
a procedure used to compute a set of rights, but is not itself a right that one
has, much less a right that may be exercised to generate, manipulate, modify,
dispose of or otherwise derive another right. Id. at 55 (citing Ex. 2009 ¶ 73).
In their Reply, Petitioners counter that Stefik’s NSOR constitutes the
claimed “meta-right” because it is a right to generate, dispose of, or modify
usage rights. Pet. Reply 9. In particular, Petitioners argue that the NSOR is
an element used by repositories in Stefik’s distribution scheme to control the
usage rights a repository may create, delete, or modify for a work after it is
transported. Id. at 10 (citing Pet. 58–60; Ex. 1002, 21:47–59; Ex. 1014
¶ 64). To support their argument, Petitioners provide an example of how
Stefik’s NSOR may be used by a content owner to add and delete certain
usage rights. Id. at 10–12. Petitioners then assert that, because Stefik’s
NSOR determines what usage rights a repository may generate during a
transaction, it satisfies the construction of the claim term “meta-right”
articulated in the Decision on Institution. Id. at 12.
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Petitioners further contend that a participant in Stefik’s distribution
scheme may choose whether to exercise the NSOR, e.g., by subjecting the
NSOR to certain conditions such as the payment of a $10 fee. Pet. Reply
13–14 (citing Ex. 1002, 27:15–33). In addition, Petitioners argue that the
NSOR allows a content owner to exert control of usage rights creation as a
digital work is distributed downstream. Id. at 14. For example, Petitioners
assert that a content owner could supply a digital work with multiple
versions of a Copy usage right, where each version has a different NSOR
bearing a different fee. Id. (citing Ex. 1032 ¶¶ 14–16).
Upon considering the record developed during trial, and as explained
below, a preponderance of the evidence supports a finding that Stefik’s
NSOR constitutes the claimed “meta-right.” Pet. 63–65; Pet. Reply 9–15.
As we explained in the claim construction section, we did not adopt the
construction proposed by Patent Owner for the claim term “meta-right,”
which would import a negative limitation into the claims. See supra Section
II.A.3. Instead, based on the explicit definition set forth in the specification
of the ’280 patent, we construe the claim term “meta-right” as “a right that
one has to generate, manipulate, modify, dispose of or otherwise derive
another right.” Id.
There is no dispute between the parties that Stefik discloses that the
NSOR defines how rights are carried forward for a copy of a digital work.
Ex. 1002, 21:47–50. The NSOR includes the following four fields: (1) the
“Add” field; (2) the “Delete” field; (3) the “Replace” field; and (4) the
“Keep” field. Id. at Fig. 15 (1509). Of particular importance in this case is
Stefik’s disclosure that versions of usage rights after the “Add:” field may be
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added to the current set of usage rights, whereas versions of usage rights
after the “Delete:” field may be deleted from the current set of usage rights.
Id. at 21:52–55. The example provided by Petitioners in their Reply
explaining how Stefik’s NSOR allows a content owner to add and delete
certain usage rights is helpful to provide context. Pet. Reply 10–12. This
example is reproduced below:

According to Petitioners, this example illustrates that, for Work 1, a
repository creates a copy of a digital work with Play, Copy, and Loan usage
rights. Id. at 10–11. For Work 2, the repository creates another copy of the
same digital work with a different set of usage rights. In particular, the
NSOR associated with Work 2 directs the repository to (i) delete the Copy
and Loan usage rights; and (ii) add the Print usage right. Id. at 11. Dr.
Goldberg’s testimony confirms that this is just one example of how Stefik’s
NSOR controls the creation of usage rights. Ex. 1032 ¶¶ 9, 10. With this
example in mind, Stefik’s NSOR satisfies our construction of “a right that
one has to generate, manipulate, modify, dispose of or otherwise derive
another right” because it determines whether a repository adds or deletes
certain usage rights to or from a digital work.
We do not agree with Patent Owner’s assertion that Stefik’s NSOR is
not itself an exercisable right and, therefore, does not satisfy our
construction of the claim term “meta-right.” PO Resp. 52–53. In the
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example provided by Petitioners, reproduced above, Stefik’s NSOR indeed
constitutes an exercisable right because it allows a repository to add or
delete certain usage rights to or from a digital work. This becomes clear
when we look to Stefik’s disclosure to understand what, if anything, occurs
when the NSOR is not specified or exercised. Stefik discloses that, if the
NSOR is not specified or exercised, the rights for the next copy of the digital
work remain the same as those of the current copy of the digital work.
Ex. 1002, 21:50–52. Only when the NSOR is specified or exercised, does
the right to add or delete certain usage rights exist. Id. at 21:53–55.
We also do not agree with Patent Owner’s assertion, and Dr. Martin’s
corresponding testimony, that Stefik’s NSOR does not constitute the claimed
“meta-right” because, purportedly, it cannot be interpreted as a separate or
independent right. PO Resp. 54–55; Ex. 2009 ¶¶ 70–73. Patent Owner’s
argument and Dr. Martin’s cited testimony are not commensurate in scope
with the claimed “meta-right.” See In re Self, 671 F.2d 1344, 1348 (CCPA
1982) (stating that limitations not appearing in the claims cannot be relied
upon for patentability). That is, Patent Owner and Dr. Martin do not direct
us to, nor can we find, language in independent claim 1 that requires the
claimed “meta-right” to be mutually exclusive from another right, such as a
usage right. We, therefore, decline Patent Owner and Dr. Martin’s invitation
to narrow the scope of this claim term by requiring it to be a separate or
independent right.
In summary, after considering the record in its entirety, a
preponderance of the evidence supports a finding that Stefik’s NSOR
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describes “a meta-right specifying a right that can be created when the meta-
right is exercised,” as recited in independent claim 1.
b. Stefik describes the claimed “determining” step
Independent claim 1 recites, in relevant part, “determining, by a
repository, whether the rights consumer is entitled to the right specified by
the meta-right.” Ex. 1001, 15:15–16.
In its Response, Patent Owner disagrees with Petitioners’ assertion
that Stefik’s disclosure of a repository checking whether all conditions of a
usage right are satisfied prior to permitting access to content satisfies the
“determining” step recited independent claim 1. PO Resp. 56–57. In
particular, Patent Owner argues that Petitioners do not point to any
disclosure in Stefik of a repository determining whether the recipient is
entitled to receive rights specified by the NSOR. Id. at 57; see also id. at
60–61 (arguing the same). Patent Owner then proceeds to direct us to
multiple examples disclosed in Stefik that are relied upon by Petitioners in
their Petitions, such as repository 2 requesting access to content stored in
repository 1, and attempts to distinguish these examples from what is
required by the claimed “determining” step. Id. at 57–61.
In their Reply, Petitioners counter that, during a usage rights
transaction between repository 1 or server repository and repository 2 or
requesting repository, Stefik discloses that the server repository first
evaluates all conditions regarding the exercise of a usage right, including
any NSORs, prior to permitting the requesting repository to access a digital
work stored in the server repository. Pet. Reply 18–19. According to
Petitioners, this process disclosed in Stefik accounts for the claimed
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“determining” step. Id. In further support of their argument, Petitioners
direct us to both a loan example (discussed in detail below) and security
example disclosed in Stefik. Id. at 19. In particular, Petitioners argue that,
in the loan example, any required fees may be paid by the requesting
repository, and that Patent Owner’s contentions to the contrary rest upon a
contorted reading of Stefik. Id. at 19–20.
As an initial matter, we note that Patent Owner’s arguments are once
again undermined by an admission in the specification of the ’280 patent.
The specification states that “the mechanism for exercising and enforcing a
meta-right can be the same as that for a usage right. For example, the
mechanism disclosed in [Stefik] can be used.” Ex. 1001, 7:36–39 (emphasis
added). Given this admission, along with our determination that Stefik’s
NSOR constitutes the claimed “meta-right,” we agree with Petitioners that
Stefik’s server repository is capable of determining whether a receiving
repository is entitled to receive rights specified by a usage right, including
any NSOR associated therewith, prior to permitting the requesting repository
to access a digital work stored in the server repository. See Pet. 65–68; Pet.
Reply 18–20.
Petitioners’ position in this regard is further bolstered by the loan
example disclosed in Stefik that is referenced in both the Petition and Reply.
Pet. 66; Pet. Reply 19–20. Stefik’s loan example is reproduced below:
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Ex. 1002, 27:15–25. According to Stefik, this loan example illustrates two
versions of a loan right. Id. at 27:27–28. Of particular importance in this
case is the first version of the loan right, which Stefik discloses costs $10 per
day, but allows the original copy owner to exercise free use of the Play,
Print, and Backup usage rights. Id. at 27:28–30.
As Petitioners explain in both the Petition and Reply, this loan
example in Stefik demonstrates that the requesting repository requests a loan
under the first version of the loan right from the server repository. Pet. 66–
67; Pet. Reply 19. The first version of the loan right specifies that the
requesting repository must pay a $10 per day fee to use the underlying
digital work. Pet. 67; Pet. Reply 19. After the server repository verifies that
the requesting repository has paid the $10 fee, the server repository permits
the requesting repository to exercise the first version of the loan right,
including the NSOR associated therewith. Pet. 66–67; Pet. Reply 19. Dr.
Goldberg’s testimony confirms that this loan example disclosed in Stefik
shows that compliance with the $10 per day fee controls whether the NSOR
associated with the first version of the loan right is exercised. Ex. 1032
¶ 19; see also Ex. 1014 ¶ 76 (testifying that access conditions are first
checked to ensure that the requesting repository is entitled to the rights
specified by a NSOR). This loan example disclosed in Stefik serves as
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sufficient evidence that the server repository determines whether the
requesting repository is entitled to the rights specified by the NSOR, as
required by the “determining” step recited in independent claim 1.
In an attempt to undermine the loan example disclosed in Stefik,
Patent Owner and its declarant, Dr. Martin, contend that Stefik does not
specify clearly who must pay the $10 per day fee. PO Resp. 59. Patent
Owner also argues that the $10 per day fee is attached to the first version of
the loan right, as a whole, and asserts that it is not specified within the
NSOR that is used to propagate rights for the first version of the loan right.
Id. (citing Ex. 2009 ¶ 86). We do not agree with Patent Owner’s arguments
and Dr. Martin’s corresponding testimony. As Petitioners correctly note in
their Reply, dependent claim 7 states, in relevant part, “said requesting
repository as a payer for said usage fee to a first credit server.” Ex. 1002,
55:1–3 (emphasis added); Pet. Reply 20. This dependent claim in Stefik
clearly envisages a scenario where the requesting repository pays the $10 per
day fee in the loan example discussed above. Moreover, we note that,
contrary to Patent Owner’s assertion and Dr. Martin’s corresponding
testimony, Petitioners do not take the position that the $10 per day fee is
specified within the NSOR itself. Instead, Petitioners take the position that
compliance with the $10 per day fee controls whether the NSOR associated
with the first version of the loan right is exercised. Pet. 66–67; Pet. Reply
19; Ex. 1032 ¶ 19.
In summary, after considering the record in its entirety, a
preponderance of the evidence supports a finding that Stefik describes the
“determining” step, as recited in independent claim 1.
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c. Stefik describes the claimed “exercising” step
Independent claim 1 recites, in relevant part, “exercising the meta-
right to create the right specified by the meta-right if the rights consumer is
entitled to the right specified by the meta-right.” Ex. 1001, 15:17–19.
In its Response, Patent Owner contends that, because Stefik does not
describe both a “meta-right” and the “determining” step recited in
independent claim 1, it follows that Stefik does not describe the “exercising”
step also recited in this claim. PO Resp. 61. In particular, Patent Owner
argues that Stefik’s disclosure of the server repository transmitting a copy of
a digital work with rights specified by the NSOR to the requesting repository
does not amount to exercising a right to generate, manipulate, modify,
dispose of or derive another right. Id. at 62. Rather, Patent Owner asserts
that Stefik simply is exercising a right to transfer the content of the digital
work and associated data from one repository to another. Id. (citing Ex.
2009 ¶ 62).
In their Reply, Petitioners counter that Patent Owner’s arguments
directed to the “exercising” step rest primarily on its arguments that Stefik
does not describe both a “meta-right” and the “determining” step, as
claimed. Pet. Reply 20–21. Petitioners further argue that Patent Owner’s
arguments in this regard are contrary to the actual disclosures in Stefik, as
well as the admission in the specification of the ’280 patent that the
mechanism disclosed in Stefik is used to exercise and enforce meta-rights.
Id. at 21 (citing Ex. 1001, 7:36–39).
Patent Owner relies upon essentially the same arguments presented
against both a “meta-right” and the “determining” step to rebut Petitioners’
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explanation and supporting evidence as to how Stefik describes the
“exercising” step. For the same reasons discussed above with respect to
both a “meta-right” and the “determining” step, we do not agree with Patent
Owner that Stefik fails to account for the “exercising” step.
We also note that the loan example discussed above demonstrates that
Stefik properly accounts for the “exercising” step recited in independent
claim 1. For instance, after the server repository has determined that the
requesting repository is entitled to the first version of the loan right because
it has paid the $10 per day fee, the server repository exercises the first
version of the loan right. Ex. 1002, 27:15–28; Ex. 1032 ¶ 19. Exercising the
first version of the loan right in this manner encompasses exercising the
NSOR associated therewith to create a new copy of the underlying digital
work that contains Play, Print, and Backup usage rights, but does not contain
Transfer and Loan usage rights, and then transferring this new copy of the
digital work to the requesting repository. See Ex. 1002, 27:15–30; Ex. 1014
¶ 76, Ex. 1032 ¶ 19. This loan example disclosed in Stefik serves as
sufficient evidence that the server repository exercises the NSOR to create
usage rights specified by the NSOR if the requesting repository is entitled to
the usage rights specified by the NSOR, as required by the “exercising” step
recited in independent claim 1.
In summary, after considering the record in its entirety, a
preponderance of the evidence supports a finding that Stefik describes the
“exercising” step, as recited in independent claim 1.
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d. Summary
Based on the record developed during trial, we conclude that
Petitioners have demonstrated by a preponderance of the evidence that
independent claim 1 is anticipated by Stefik.
4. Claims 5 and 11
In its Response, Patent Owner relies upon the same arguments
presented against independent claim 1 to rebut Petitioners’ explanations and
supporting evidence as to how Stefik describes the subject matter of
dependent claims 5 and 11. See PO Resp. 50–63. For the same reasons
discussed above with respect to independent claim 1, we do not agree with
Patent Owner’s arguments.
We have reviewed Petitioners’ arguments and supporting evidence set
forth in the Petition regarding dependent claims 5 and 11, and find them
persuasive. See Pet. 70–71. Based on the record developed during trial, we
conclude that Petitioners have demonstrated by a preponderance of the
evidence that these dependent claims are anticipated by Stefik.
C. Obviousness Over the Combination of Stefik and the
Knowledge of One of Ordinary Skill in the Art
Petitioners contend that claims 1, 5, and 11 are unpatentable under
§ 103(a) over the combination of Stefik and the knowledge of one of
ordinary skill in the art. Pet. 74–76; Pet. Reply 21–25; see also Pet. 63–71
(disclosing an element by element analysis of how Stefik teaches the subject
matter of these challenged claims). In particular, Petitioners explain how the
proffered combination teaches the subject matter of each challenged claim.
Pet. 63–71. Petitioners also rely upon Dr. Goldberg’s Declaration
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accompanying the Petition (Ex. 1014 ¶¶ 69–98) and Dr. Goldberg’s Rebuttal
Declaration accompanying the Reply (Ex. 1032 ¶¶ 22–27) to support their
positions. In its Response, Patent Owner presents arguments that Petitioners
have not demonstrated that claims 1, 5, and 11 would have been obvious
based on Stefik and the knowledge of one of ordinary skill in the art.
PO Resp. 63–71. Patent Owner relies upon Dr. Martin’s Declaration
(Ex. 2009 ¶¶ 97–104) to support is positions.
We begin our analysis with the principles of law that generally apply
to a ground based on obviousness, followed by an assessment of the level of
skill in the art, and then we address the arguments presented by the parties.
1. Principles of Law
A claim is unpatentable under § 103(a) if the differences between the
claimed subject matter and the prior art are such that the subject matter, as a
whole, would have been obvious at the time the invention was made to a
person having ordinary skill in the art to which said subject matter pertains.
KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007). The question of
obviousness is resolved on the basis of underlying factual determinations,
including (1) the scope and content of the prior art; (2) any differences
between the claimed subject matter and the prior art; (3) the level of skill in
the art; and (4) when in evidence, so-called secondary considerations.
Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966). We also recognize
that prior art references must be “considered together with the knowledge of
one of ordinary skill in the pertinent art.” Paulsen, 30 F.3d at 1480 (quoting
In re Samour, 571 F.2d 559, 562 (CCPA 1978)). We analyze this ground
based on obviousness with the principles stated above in mind.
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2. Level of Skill in the Art
There is sufficient evidence in the record before us that reflects the
knowledge level of a person with ordinary skill in the art. Petitioners’
declarant, Dr. Goldberg, attests that a person with ordinary skill in the art in
the relevant time frame would be an individual who (1) possesses a
bachelor’s degree in electrical engineering, computer science, or a related
field; and (2) has at least two years of experience with digital content
distribution and/or computer security. Ex. 1014 ¶ 10. Patent Owner’s
declarant, Dr. Martin, agrees with Dr. Goldberg’s assessment. Compare
Ex. 1014 ¶ 10, with Ex. 2009 ¶ 16. In addition, we note that the prior art of
record in this proceeding—namely, Stefik—is indicative of the level of
ordinary skill in the art. See Okajima v. Bourdeau, 261 F.3d 1350, 1355
(Fed. Cir. 2001); In re GPAC Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995).
3. Claims 1, 5, and 11
Petitioners contend that Stefik teaches all the limitations recited in
claims 1, 5, and 11. See Pet. 63–71. Petitioners then argue that, to the
extent these challenged claims require that a meta-right must be exercisable
or transferable without simultaneously copying or transferring the digital
work associated therewith, it would have been obvious to one of ordinary
skill in the art to exercise or transfer Stefik’s NSOR separately from any
copying or transferring of the underlying digital work. Id. at 75. Petitioners
further argue that a person of ordinary skill in the art would have understood
that there are only two ways for exercising or transferring meta-rights and
the digital works associated therewith: (1) at the same time; and (2) at a
different time or, alternatively, in a different action. Id. at 75–76.
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Petitioners then assert that one of ordinary skill in the art, who possesses
experience in digital data transfer and communications and is able to write
source code, would have been able to write code to require the meta-right
transfer to occur at the same time or at a different time from copying or
transfer of the underlying digital work. Id. at 76 (citing Ex. 1014 ¶¶ 96–99).
In its Response, Patent Owner contends that the arguments advanced
by Petitioners fall short of demonstrating that the challenged claims would
have been obvious over Stefik and the knowledge of one of ordinary skill in
the art. PO Resp. 66. In particular, Patent Owner directs us to arguments
previously presented on the ground based on anticipation, and then argues
that Stefik’s NSOR does not constitute the claimed “meta-right” because it is
not an independently exercisable right. Id. at 66–67; see also id. at 69
(arguing the same). To support this argument, Patent Owner also directs us
to certain testimony in Dr. Martin’s Declaration. Id. at 67 (citing Ex. 2009
¶¶ 70–73, 104). Patent Owner further argues that Petitioners have not
explained adequately how their proposed modification would result in
practicing other aspects of the challenged claims—namely, the
“determining” and “exercising” method steps recited in independent claim 1.
Id. at 67–68 (citing Ex. 2009 ¶ 102). Lastly, Patent Owner argues that, even
if the modification to Stefik proposed by Petitioners would result in the
subject matter of independent claim 1, Petitioners do not provide a sufficient
rationale to modify Stefik in this way. Id. at 68–71.
In their Reply, Petitioners maintain that it would have been obvious to
one of ordinary skill in the art to modify Stefik to allow the NSOR to be
exercised separately from the copying or transferring of the underlying
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digital work. Pet. Reply 22. According to Petitioners, this is not a case
where there are a multitude of choices with different consequences, but
instead this is a case where there are only two options as to when Stefik’s
NSOR may be exercised in relation to a usage right—namely, (1) at the
same time; or (2) at a different time. Id. (citing Pet. 75–76; Ex. 1014 ¶ 98).
Petitioners argue that one of ordinary skill in the art would have recognized
that adjusting the timing of actions such that Stefik’s NSOR is exercised
separately from a usage right, e.g., a Copy or Transfer, would have been one
of “a finite number of identified, predictable solutions,” well within the
grasp of an ordinarily skilled artisan. Id. (quoting KSR, 550 U.S. at 421)
(citing Ex. 1014 ¶¶ 98, 99). Lastly, Petitioners assert that exercising Stefik’s
NSOR at a different time than the usage right would have no practical
impact on the operation of Stefik’s distribution scheme, including the
implementation of the method steps recited in independent claim 1. Id. at
22–23 (citing Ex. 1032 ¶ 22; KSR, 550 U.S. at 417).
The Supreme Court has held that an obviousness evaluation “cannot
be confined by a formalistic conception of the words teaching, suggestion,
and motivation, or by overemphasis on the importance of published articles
and the explicit content of issued patents.” KSR, 550 U.S. at 419. Instead,
the relevant inquiry here is whether Petitioners have set forth “some
articulated reasoning with some rational underpinning to support the legal
conclusion of obviousness.” In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006),
cited with approval in KSR, 550 U.S. at 418. When describing examples of
what may constitute a sufficient rationale to combine, the Court held that,
“[w]hen there is a design need or market pressure to solve a problem and
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there are a finite number of identified, predictable solutions, a person of
ordinary skill has good reason to pursue the known options within his or her
technical grasp.” KSR, 550 U.S. at 421.
Upon considering the record in its entirety, we are satisfied that
Petitioners’ rationale for modifying Stefik by allowing a NSOR to be
exercised at a different time from a usage right suffices as an articulated
reasoning with rational underpinnings that justifies the legal conclusion of
obviousness. We first address whether a design need or market pressure
existed to solve a particular problem, and then we turn to whether there were
a finite number of identified, predictable solutions. As to the first inquiry,
both the Background of the Invention of the ’280 patent and Stefik serve as
evidence that there was a need to address particular problems associated
with exercising and enforcing the rights of content owners during the
distribution and use of their digital works in a multi-level distribution
scheme. Ex. 1001, 1:29–61; Ex. 1002, 1:23–2:48.
As to the second inquiry, we previously explained in the asserted
ground based on anticipation that Stefik’s NSOR constitutes an exercisable
right because it allows a repository to add or delete certain usage rights to or
from a digital work. See supra Section II.B.3.a (citing Ex. 1002, 21:50–55).
The focus of the second inquiry then shifts to whether Stefik’s NSOR is
capable of being exercised separately or independently of a usage right.
Although we recognize that Patent Owner and its declarant, Dr. Martin,
assert that Stefik’s NSOR only works in the context of a usage right
(PO Resp. 66–67, 69; Ex. 2009 ¶¶ 70–73, 103, 104), neither Patent Owner
nor Dr. Martin provide sufficient or credible evidence that supports limiting
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the functionality of Stefik’s NSOR in this way. Our reviewing court has
instructed that we must consider Stefik for everything it teaches by way of
technology and it is not limited to the particular invention it is describing
and attempting to protect. See EWP Corp. v. Reliance Universal Inc., 755
F.2d 898, 907 (Fed. Cir. 1985). Given that Stefik’s usage right and NSOR,
at a fundamental level, simply amount to software constructs, we agree with
Petitioners and their declarant, Dr. Goldberg, that one of ordinary skill in the
art would have recognized that there are two plausible options as to when
Stefik’s NSOR may be exercised in relation to a usage right—namely, (1) at
the same time; or (2) at a different time. Pet. 75–76; Pet. Reply 22; Ex. 1014
¶ 98; Ex. 1032 ¶ 22.
To the extent the challenged claims require that a meta-right must be
exercisable or transferable without simultaneously copying or transferring
the digital work associated therewith, we see no reason why one of ordinary
skill in the art would not have pursued these known options to arrive at
exercising Stefik’s NSOR at a different time than a usage right. See KSR,
550 U.S. at 421. That is, we see no reason why it would not have been
obvious to try exercising Stefik’s NSOR on its own, outside the context of,
e.g., a Copy or Transfer usage right, especially given that Stefik’s NSOR is
nothing more than a software construct that allows a repository to add or
delete certain usage rights to or from a digital work.
In summary, based on the record developed during trial, we conclude
that Petitioners have demonstrated by a preponderance of the evidence that
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claims 1, 5, and 11 are obvious over the combination of Stefik and the
knowledge of one of ordinary skill in the art.
D. Patent Owner’s Motion to Amend
In its Motion to Amend, Patent Owner requests that we cancel
independent claim 1 of the ’280 patent and replace it with proposed,
substitute independent claim 37. Mot. to Amend 1. This Motion is
contingent on our determination that independent claim 1 is unpatentable
under §§ 102(b) and 103(a). Id. As we explained in our analysis above, we
determine that Petitioners have demonstrated by a preponderance of
evidence that independent claim 1 is unpatentable under §§ 102(b) and
103(a). See supra Section II.B–C. Consequently, Patent Owner’s Motion to
Amend is before us for consideration. For the reasons set forth below, we
grant Patent Owner’s Motion to Amend.
Proposed, substitute independent claim 37 is reproduced below:
37. (Proposed substitute for original independent claim 1)
A computer-implemented method for transferring rights
adapted to be associated with items from a rights supplier to a
rights consumer, the method comprising:
obtaining a set of rights associated with an item of
content, the set of rights including a meta-right specifying
a usage right or another meta-right that can be created when the
meta-right is exercised, wherein the meta-right is provided in
digital form and is enforceable by a repository;
determining, by a repository, whether the rights
consumer is entitled to the right specified by the meta-right; and
exercising the meta-right to create the right specified by
the meta-right if the rights consumer is entitled to the right
specified by the meta-right, wherein the created right includes
at least one state variable based on the set of rights and used for
determining a state of the created right, and wherein the meta-
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right is not itself a usage right because exercising the meta-right
does not result in action to the content.

Id. at 2 (underlining indicates language that Patent Owner is seeking to add).
A motion to amend a claim in a covered business method patent
review proceeding is not, by itself, an amendment. As the moving party,
Patent Owner bears the burden of proof to establish that it is entitled to the
relief requested. 37 C.F.R. § 42.20(c). As such, Patent Owner’s amendment
is not entered automatically, but occurs only upon Patent Owner satisfying
the requirements of 37 C.F.R. § 42.221 and demonstrating by a
preponderance of the evidence the patentability of the proposed, substitute
claim. See MasterImage 3D, Inc. v. RealD Inc., Case IPR2015-00040
(PTAB July 15, 2015) (Paper 42, “MasterImage”) (precedential); Idle Free
Sys., Inc. v. Bergstrom, Inc., Case IPR2012-00027, slip op. at 7–8 (PTAB
June 11, 2013) (Paper 26, “Idle Free”) (informative).5 We begin our
analysis by first addressing whether proposed, substitute independent claim
37 meets the requirements of 37 C.F.R. § 42.221 and then we turn to
whether this new claim is patentable over the prior art.
1. The Amendment Responds to a Ground Involved in the Trial
A motion to amend may be denied where “[t]he amendment does not
respond to a ground of unpatentability involved in the trial.” 37 C.F.R.

5 We recognize that both the MasterImage and Idle Free decisions originate
from inter partes review proceedings. These decisions, however, apply to a
covered business method patent review proceeding because the statutory
provisions and regulations that govern a motion to amend are identical in
both types of proceedings. Compare 35 U.S.C. § 316(d) and 37 C.F.R.
§ 42.121, with 35 U.S.C. § 326(d) and 37 C.F.R. § 42.221.
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§ 42.221(a)(2)(i). In its Motion to Amend, Patent Owner requests that we
cancel independent claim 1 and replace it with proposed, substitute
independent claim 37 in order to overcome the instituted grounds based, in
whole or in part, on Stefik. See Mot. to Amend 1, 9–11. In their
Opposition, Petitioners contend that the amendment offered by Patent
Owner is not responsive to any issue of patentability raised in the trial, but
instead simply makes explicit what Petitioners contend already is implicit in
independent claim 1. Opp. to Mot. 1–2 (citing Mot. to Amend 3, 24–25). In
its Reply, Patent Owner contends that, in the event we maintain the
construction of the claim term “meta-right” articulated in the Decision on
Institution and ultimately determine that independent claim 1 is unpatentable
in view of Stefik, new proposed, substitute independent claim 37 would
distinguish Stefik on grounds unavailable under our initial construction.
Reply to Mot. 1. Patent Owner, therefore, asserts that its amendment is
related directly, and responsive to, the patentability issues involved in the
trial. Id. at 1–2.
As we explained in our claim construction section, we did not adopt
the construction proposed by Patent Owner for the claim term “meta-right,”
which would import a negative limitation into the claims. See supra Section
II.A.3. Instead, based on the explicit definition set forth in the specification
of the ’280 patent, we construe the claim term “meta-right” as “a right that
one has to generate, manipulate, modify, dispose of or otherwise derive
another right.” Id. Much of the argument and evidence developed during
the trial centered on whether Stefik properly accounts for this construction of
the claim term “meta-right.” Proposed, substitute independent claim 37
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merely amends independent claim 1 to recite explicitly the district court’s
construction of the claim term “meta-right.” See Mot. to Amend 1; Reply to
Mot. 1. We, therefore, agree with Patent Owner that its amendment is
responsive to the grounds based, in whole and in part, on Stefik involved in
the trial.
2. No Broadening of Scope
A proposed, substitute claim in a covered business method patent
review proceeding “may not enlarge the scope of the claims of the patent.”
35 U.S.C. § 326(d)(3); see 37 C.F.R. § 42.221(a)(2)(ii). In its Motion to
Amend, Patent Owner proposes independent claim 37 as a substitute for
independent claim 1. Mot. to Amend 1. Patent Owner asserts that proposed,
substitute independent claim 37 includes all of the limitations of independent
claim 1 for which it is a substitute, and adds limitations that conform to the
district court’s construction of the claim term “meta-right.” Id. at 3. No
limitations are removed. In their Opposition, Petitioners do not dispute
Patent Owner’s assertion that the proposed, substitute independent claim 37
does not enlarge the scope of independent claim 1. We, therefore, are
persuaded that the proposed, substitute independent claim 37 does not
enlarge the scope of the original patent claims.
3. Written Description Support
Pursuant to 37 C.F.R. § 42.221(b)(1)–(2), a motion to amend in a
covered business method patent review proceeding must set forth “[t]he
support in the original disclosure of the patent for each claim that is added or
amended”; and “[t]he support in an earlier-filed disclosure for each claim for
which benefit of the filing date of the earlier filed disclosure is sought.” The
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test for written description support is “whether the disclosure of the
application relied upon reasonably conveys to those skilled in the art that the
inventor had possession of the claimed subject matter as of the filing date.”
Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010).
In its Motion to Amend, Patent Owner sets forth written description
support for proposed, substitute independent claim 37 by providing citations
to, along with parentheticals of, the following applications: (1) the ’121
application (Ex. 2011), which is the application that led to the ’280 patent;
(2) the ’701 application (Ex. 2012), which is a continuation-in-part of the
’121 application; and (3) the ’624 provisional application (Ex. 2013), which
is the earliest provisional application that the ’280 patent seeks the benefit of
priority. Mot. to Amend 3–5.
In their Opposition, Petitioners contend that Patent Owner fails to
demonstrate sufficient written description support for proposed, substitute
independent claim 37. Opp. to Mot. 19. In particular, Petitioners argue that
Patent Owner only provides a cursory written description discussion that
includes bare assertions, string citations with short parenthetical
descriptions, and no supporting expert testimony. Id. at 20–21. With
respect to the amended language, Petitioners assert that Patent Owner does
not identify where this language appears verbatim in the three identified
applications, nor does Patent Owner’s parenthetical adequately explain why
one ordinary skill in the art would have recognized that the inventor
possessed the claimed subject matter, as a whole. Id. (citing Nichia Corp. v.
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Emcore Corp., Case IPR2012-00005, slip op. at 4 (PTAB June 3, 2013)
(Paper 27) (representative)).
In its Reply, Patent Owner maintains that it has demonstrated
sufficient written description support for proposed, substitute independent
claim 37, as a whole. Reply to Mot. 8. Patent Owner argues that Petitioners
fail to consider the full teachings of each cited passage from the perspective
of one of ordinary skill in the art. Id. at 8–9.
Upon reviewing Patent Owner’s citations to, and parentheticals of, the
disclosures of the ’121 application, the ’701 application, and the ’624
provisional application, we conclude that Patent Owner has made a
sufficient showing that proposed, substitute independent claim 37, as a
whole, has written description support in these disclosures. Contrary to
Petitioners’ argument that Patent Owner only provides a cursory written
description discussion in its Motion to Amend (Opp. to Mot. 20), we are
able to ascertain based on Patent Owner’s citations and accompanying
parentheticals that there is sufficient written description for the entire
proposed, substitute claim. To the extent Petitioners argue that Patent
Owner must provide supporting expert testimony to satisfy the written
description requirement (id.), we do not view expert testimony as necessary
in this particular case to explain how the disclosures in the relevant
applications provide written description support for the entire proposed,
substitute claim.
We also do not agree with Petitioners’ argument that Patent Owner
does not identify where the amended language—namely, “the meta-right is
not itself a usage right because exercising the meta-right does not result in
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action to the content”—appears verbatim in the three identified applications.
Opp. to Mot. 20. The Federal Circuit has held that, when examining the
written description for support for a claimed invention, the exact terms
appearing in the claim “need not be used in haec verba.” Lockwood v. Am.
Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997).
Here, the ’121 application and the ’701 application both state that “the
difference between usage rights and meta-rights are the result from
exercising the rights. When exercising usage rights, actions to content
result. . . . When meta-rights are exercised, new rights are created from the
meta-rights or existing rights are disposed as the result of exercising the
meta-rights.” Ex. 2011, 14–156 (paragraph [0044]); Ex. 2012, 137
(paragraph [0035]). Similarly, the ’624 provisional application states that
“the differen[ce] between usage rights and meta-rights [is] the result from
exercising the rights (or meta-rights). When exercising rights, actions result,
for example viewing or using a digital content. With meta-rights new rights
are created or derived from the meta-rights as the result of exercising those
rights.” Ex. 2013, 3–48 (emphasis omitted). We, therefore, are satisfied

6All references to the page numbers in the ’121 application refer to the page
numbers inserted by Patent Owner in the bottom, right-hand corner of each
page in Exhibit 2011.
7 All references to the page numbers in the ’701 application refer to the page
numbers inserted by Patent Owner in the bottom, right-hand corner of each
page in Exhibit 2012.
8 All references to the page numbers in the ’624 provisional application refer
to the page numbers inserted by Patent Owner in the bottom, right-hand
corner of each page of Exhibit 2013.
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that, as of the filing date of the ’280 patent, the aforementioned disclosures
in the ’121 application, the ’701 application, and the ’624 provisional
application reasonably convey to one of ordinary skill in the art that the
inventors of the ’280 patent possessed the amended language identified
above.
4. Claim Construction
Patent Owner bears the burden in its Motion to Amend to show a
patentable distinction of each proposed substitute claim over the prior art.
See 37 C.F.R. § 42.20(c). Accordingly, a “patent owner should identify
specifically the feature or features added to each substitute claim, as
compared to the challenged claim it replaces, and come forward with
technical facts and reasoning about those feature(s).” Idle Free, slip op. at 7.
This includes “construction of new claim terms, sufficient to persuade [us]
that the proposed substitute claim is patentable over the prior art of record,
and over prior art not of record but known to the patent owner.” Id. As we
explained previously, in a covered business method patent review
proceeding, we interpret claim terms in an unexpired patent according to the
broadest reasonable interpretation in light of the specification of the patent in
which it appears. 37 C.F.R. § 42.300(b).
In its Motion to Amend, Patent Owner proposes a construction of two
claim terms, both of which are reproduced in the table below.
Claim Term Claim Construction
“content” “the digital information (i.e. raw bits) representing a digital
work”
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Claim Term Claim Construction
“usage rights” “indications that are attached, or treated as attached, to [a
digital work / digital content / content / a digital document]
and that indicate the manner in which the [digital work /
digital content / content / digital document] may be used or
distributed as well as any conditions on which use or
distribution is premised”

Mot. to Amend 6 (alterations in original) (citing Ex. 1001, 1:37–43;
Ex. 1002, 52:32–34; Ex. 2001, 23–33, 106–08). In their Opposition,
Petitioners do not propose alternative constructions or otherwise argue that
Patent Owner’s proposed constructions are incorrect.
5. Level of Skill in the Art
A motion to amend must address the basic knowledge and skill set
possessed by a person of ordinary skill in the art, even without reliance on
any particular item of prior art. Idle Free, slip op. at 7–8. Patent Owner
maintains the same assessment of the level of skill in the art discussed
previously in the instituted ground based on obviousness. Mot. to Amend 8–
9 (citing Ex. 2009 ¶ 16). In their Opposition, Petitioners do not challenge
this assessment of the level of skill in the art or propose an alternative
assessment. For purposes of addressing this Motion to Amend, we accept
Patent Owner’s assessment of the level of skill in the art.
6. Patentability Over the Prior Art
In its Motion to Amend, Patent Owner bears the burden of proof to
demonstrate patentability of its proposed, substitute claim over the prior art,
and, thus, entitlement to the new claim. Microsoft Corp. v. Proxyconn, Inc.,
789 F.3d 1292, 1307–08 (Fed. Cir. 2015) (upholding the approach
established in Idle Free of allocating to the patent owner the burden of
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showing the patentability of any proposed amendments). This does not
mean that Patent Owner is assumed to be aware of every item of prior art
known to a person of ordinary skill in the art. Patent Owner, however,
should explain in its Motion to Amend why the proposed, substitute claim is
patentable over not just the “prior art of record,” but also “prior art known to
the patent owner” that is not of record. Idle Free, slip op. at 7. We have
held that “prior art of record” refers to 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 we did not institute review, and
any material art of record in any other proceeding before the Office
involving the ’280 patent. MasterImage, slip op. at 2. We also have held
that “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 this
proceeding pursuant to its duty of candor and good faith to the Office under
37 C.F.R. § 42.11. Id. at 3. Petitioners then have the opportunity, in their
Opposition, to argue any deficiency in the Motion to Amend and “come
forward with specific evidence and reasoning, including citation and
submission of any applicable prior art,” to rebut Patent Owner’s position on
patentability. Idle Free, slip op. at 8.
In its Motion to Amend, Patent Owner contends that proposed,
substitute independent claim 37 is patentable over Stefik, which is the prior
art that serves as the basis of the asserted grounds instituted in this
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proceeding, as well as Ireton,9 England,10 Gruse,11 Ginter,12 and Wyman.13
Mot. to Amend 9–23. Ireton, England, Gruse, and Ginter were all prior art
references asserted in other Petitions filed by Apple challenging the
patentability of certain subsets of claims of the ’280 patent, including
independent claim 1. Id. at 7–8 (citing Cases IPR2015-00351, IPR2015-
00352, IPR2015-00353, IPR2015-00354). We denied each of these
Petitions because Apple did not establish a reasonable likelihood that it
would prevail as to any challenged claim. Exs. 2019–22. Wyman is a prior
art reference that was asserted by Petitioners in a related district court case.
Mot. to Amend 8.
In their Opposition, Petitioners do not present argument or evidence
as to whether Ireton, England, Gruse, Ginter, or Wyman anticipates
proposed, substitute independent claim 37, nor do Petitioners present
argument or evidence as whether these prior art references in combination
renders obvious this proposed, substitute claim. See generally Opp. to Mot.
2–19. Instead, Petitioners only contend that Stefik anticipates or renders
obvious proposed, substitute independent claim 37. Id. Consequently,

9 Ireton, U.S. Patent Publication No. 2002/0077984 A1, published June 20,
2002, filed Dec. 19, 2000 (Ex. 2014).
10 England, U.S. Patent No. 6,327,652 B1, issued Dec. 4, 2001, filed Jan. 8,
1999 (Ex. 2015).
11 Gruse, U.S. Patent No. 6,389,538 B1, published May 14, 2002, filed Oct.
22, 1998 (Ex. 2016).
12 Ginter, U.S. Patent No. 5,892,900, published Apr. 6, 1999, filed Aug. 30,
1996 (Ex. 2017).
13 Wyman, U.S. Patent No. 5,260,999, published Nov. 9, 1993, filed Sept.
15, 1992 (Ex. 2018).
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Patent Owner’s assertions regarding why proposed, substitute independent
claim 37 is patentable over Ireton, England, Gruse, Ginter, and Wyman
essentially are unrebutted. Our analysis below solely focuses on the parties’
contentions as to whether Stefik anticipates or renders obvious proposed,
substitute independent claim 37.
a. No Anticipation by Stefik
In its Motion to Amend, Patent Owner contends that Stefik does not
disclose the step of “exercising” the meta-right, “wherein the meta-right is
not itself a usage right because exercising the meta-right does not result in
action to the content,” as recited in proposed, substitute independent claim
37. Mot. to Amend 10. According to Patent Owner, Stefik’s NSOR only
appears within grammar defining a usage right and is not itself a right
separate from the usage right that can be exercised without resulting in
action to content. Id. at 10–11 (citing Ex. 2009 ¶¶ 75, 117).
In their Opposition, Petitioners contend that the newly added feature
that a “meta-right” is not a “usage right” and exercising it does not result in
action to content has no effect on the status of Stefik’s NSOR as a “meta-
right” because there is no evidence whatsoever that the NSOR is itself a
usage right, nor is there evidence that exercising the NSOR results in action
to content. Opp. to Mot. 3–4. Petitioners argue that Stefik’s NSOR is not
one and the same as a usage right, but instead it is simply part of the data
defining the usage right. Id. at 10. Petitioners also argue that there is no
evidence that Stefik’s NSOR causes action to content. Id.; see also id. at 12
(arguing the same). Instead, Petitioners assert that Stefik’s NSOR creates,
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destroys, or modifies usage rights, whereas the usage rights, themselves,
cause action to content. Id. at 11.
In its Reply, Patent Owner maintains that Stefik’s NSOR does not
disclose an exercisable right that is not a usage right and the NSOR only is
processed as part of the sequence of steps constituting exercise of a usage
right that results in action to content. Reply to Mot. 3–5.
Taking into account Petitioners’ Opposition, we determine that Patent
Owner has provided a sufficient explanation as to why proposed, substitute
independent claim 37 is not anticipated by Stefik. As we explained in the
instituted ground based on anticipation discussed previously, Stefik’s NSOR
determines whether a repository adds or deletes certain usage rights to or
from a digital work. See supra Section II.B.3.a. The parties appear to agree
that actions to content include, among other things, copy, play, or transfer.
Tr. 12:16–18, 34:22–35:7. When we apply the parties’ understanding of
what constitutes actions to content to the disclosed functionality of Stefik’s
NSOR, the evidence of record reflects that exercising Stefik’s NSOR by
adding, e.g., Copy and Play usage rights, to a digital work results in action to
content because the content of this work is copied from one repository to
another with a right to play the content. See Ex. 1002, 21:47–54. Based on
the particular circumstances of this case, we are persuaded that Patent
Owner has demonstrated sufficiently that Stefik does not describe “the meta-
right is not itself a usage right because exercising the meta-right does not
result in action to the content,” which is the newly added feature in
proposed, substitute independent claim 37.
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b. No Obviousness Over Stefik
In its Motion to Amend, Patent Owner contends that Stefik differs
from proposed, substitute independent claim 37 because it controls use and
distribution of content by enforcing usage rights specified by a content
provider, wherein the exercise of the usage rights results in action to content.
Mot. 20–21. Patent Owner argues that a person of ordinary skill in the art
would not have been led by the teachings of Stefik toward a system that uses
meta-rights that are distinct from usage rights and are exercisable to create
new rights without resulting in action to content. Id. at 21. To support its
argument, Patent Owner relies upon the testimony of its declarant, Dr.
Martin. Id. at 22–23 (citing Ex. 2009 ¶¶ 154–57).
In their Opposition, Petitioners rely upon essentially the same
arguments presented to demonstrate that Stefik anticipates proposed,
substitute independent claim 37 in order to demonstrate that Stefik renders
obvious this proposed, substitute claim. Opp. to Mot. 3–4, 10–12.
Petitioners further argue that there a number of reasons that would have
prompted one of ordinary skill in the art to modify Stefik to include the
newly added feature in proposed, substitute independent claim 37. Id. at 17.
Petitioners direct us to a number of examples in Stefik that purportedly
suggest to one of ordinary skill in the art that it would be desirable to
manage rights at one level of a distribution scheme for the stated goal of
controlling rights granted at a subsequent, downstream level of the
distribution scheme. Id. at 17–18. Petitioners and their declarant, Dr.
Goldberg, then assert that, in furtherance of this goal, Stefik discloses one
example involving an embedded transaction fee that purportedly suggests it
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would have been desirable or feasible to add, remove, or modify the rights of
a digital work without any action on content. Id. at 18–19 (citing Ex. 1002,
26:6–10, 41:54–56; Ex. 1032 ¶¶ 25–27).
In its Reply, Patent Owner contends that Petitioners have not
demonstrated that proposed, substitute independent claim 37 would have
been obvious in view of Stefik because Petitioners ignore both the subject
matter of this proposed, substitute claim, as a whole, and Stefik’s disclosure
at a fundamental level. Reply to Mot. 5–6. Patent Owner argues that
Petitioners do not provide a cogent rationale to modify Stefik other than to
assert that Stefik describes numerous distribution schemes. Id. at 7. Patent
Owner also disagrees with Petitioners and Dr. Goldberg’s characterization of
Stefik’s embedded transaction fee. Id. at 7–8. Patent Owner asserts that, in
this example, embedding cannot occur without transferring the underlying
content from one repository to another. Id. at 8.
Taking into account Petitioners’ Opposition, we determine that Patent
Owner has provided a sufficient explanation as to why proposed, substitute
independent claim 37 would not have been obvious over Stefik. As we
explained above, Patent Owner has demonstrated sufficiently that Stefik
does not describe “the meta-right is not itself a usage right because
exercising the meta-right does not result in action to the content,” as recited
in proposed, substitute independent claim 37. See supra Section II.D.6.a.
The focus then shifts to whether there is sufficient articulated reasoning as to
whether one of ordinary skill in the art would have modified Stefik to
account for this newly added feature. The primary reason Patent Owner
offers for making this modification is that Stefik’s disclosure of an
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embedded transaction fee purportedly suggests that it would have been
desirable or feasible to add, remove, or modify the rights of a digital work
without any action on content. Opp. to Mot. 17–18. We do not agree.
As an initial matter, Petitioners do not present and develop arguments
in their Opposition that explain how or why Stefik’s embedded transaction
fee constitutes the claimed “meta-right.” See Opp. to Mot. 18–19. We
understand Dr. Goldberg to argue that Stefik’s embedded transaction fee
constitutes the claimed “meta-right,” but his testimony in this regard only
appears in his Declaration and is not presented or developed adequately in
the Opposition itself. See id. (citing Ex. 1032 ¶¶ 25–27). Such
incorporation by reference circumvents our rules limiting the pages in an
opposition to a motion to amend to twenty-five pages and is not entitled to
consideration. See 37 C.F.R. § 42.6(a)(3) (“Arguments must not be
incorporated by reference from one document into another document.”).
In any event, even if we were to assume that Stefik’s embedded
transaction fee constitutes the claimed “meta-right,” we still do not agree
with Petitioners’ argument that exercising this embedded transaction fee
does not result in action to content, as required by proposed, substitute
independent claim 37. Stefik discloses that an embedded transaction fee is a
fee added by a distributor to a digital work. Ex. 1002, 41:54–56. When a
distributor imposes an embedded transaction fee, Stefik discloses that, if a
NSOR has been provided, those rights are transferred as the rights for the
new digital work. Id. at 42:4–6. Given these cited disclosures, we agree
with Patent Owner that merely adding a fee to a digital work still requires
transferring the digital work from one repository to another. See Reply to
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Mot. 8. For instance, if a distributor adds an embedded transaction fee to a
digital work that provides a NSOR, exercising the NSOR by adding, e.g.,
Copy and Play usage rights, to a digital work still results in action to content
because, once the fee is paid, the content of this new work is copied from
one repository to another with a right to play the content. See Ex. 1002,
21:47–54, 41:54–42:13.
Based upon the particular circumstances of this case, we remain
convinced that Patent Owner has demonstrated sufficiently that Stefik does
not describe “the meta-right is not itself a usage right because exercising the
meta-right does not result in action to the content,” as recited in proposed,
substitute independent claim 37. Nor do we agree with Petitioners’ assertion
that there is a sufficient articulated reasoning that would have prompted one
of ordinary skill in the art to modify Stefik to account for this newly added
feature.
7. Proposed, Substitute Independent Claim 37 is “Substantially
Identical” to Original Independent Claim 1 Within the Meaning of
35 U.S.C. § 252

The Practice Guide states that:
When filing a motion to amend, a patent owner may
demonstrate that the scope of the amended claim is
substantially identical to that of the original patent claim, as the
original patent claim would have been interpreted by a district
court. In such cases, a patent owner may request that the Board
determine that the amended claim and original patent claim are
substantially identical within the meaning of 35 U.S.C. [§] 252.

77 Fed. Reg. at 48,766 (emphasis added). To determine whether substantive
changes have been made, we consider “whether the scope of the claims are
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identical, not merely whether different words are used.” Laitram Corp. v.
NEC Corp., 163 F.3d 1342, 1346 (Fed. Cir. 1998); Bloom Eng’g Co. v. N.
Am. Mfg. Co., 129 F.3d 1247, 1250 (Fed. Cir. 1997).
In its Motion to Amend, Patent Owner contends that proposed,
substitute independent claim 37 simply amends independent claim 1 to recite
explicitly the meaning of the claim term “meta-right” as it was construed by
the district courts. Mot. to Amend 24. To support its argument, Patent
Owner directs us to the “Memorandum Opinion and Order” from the U.S.
District Court for the Eastern District of Texas, in which the claim term
“meta-right” in the ’280 patent was construed as “a right that, when
exercised, creates or disposes of usage rights (or other meta-rights) but that
is not itself a usage right because exercising a meta-right does not result in
action to content.” Id. (quoting Ex. 2001, 106). Patent Owner represents
that no other district court has construed this claim term. Id. at 25.
In their Opposition, Petitioners contend that we should decline to find
that the scope of proposed, substitute independent claim 37 is “substantially
identical” to the scope of independent claim 1 because restricting “meta-
rights” to a subset of those encompassed by this original claim—namely,
those which do not result in action to content—changes the scope of this
original claim relative to the way it was construed under the broadest
reasonable interpretation standard. See Opp. to Mot. 22–24.
In its Reply, Patent Owner contends that it is irrelevant under § 252
that the scope of proposed, substitute independent claim 37 is narrower than
the scope of independent claim 1 under the broadest reasonable
interpretation standard. Reply to Mot. 11. Instead, Patent Owner argues that
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the focus here should be on the how the district courts would construe
independent claim 1, particularly the claim term “meta-right.” Id. at 10–11.
We agree with Patent Owner that, when determining whether the
scope of proposed, substituted independent claim 37 is “substantially
identical” to that of independent claim 1, the focus should be on how
independent claim 1 would be construed by the district courts—not on how
this same claim would be construed under the broadest reasonable
interpretation standard. Here, Patent Owner has provided a sufficient
explanation as to why the scope of proposed, substitute independent claim
37 is “substantially identical” to that of independent claim 1 for purposes of
§ 252. That is, proposed, substitute independent claim 37 simply amends
independent claim 1 to recite explicitly the meaning of the claim term
“meta-right” as it was construed by the U.S. District Court for the Eastern
District of Texas. Ex. 2001, 106. Petitioners do not argue that this
particular district court claim construction is erroneous or, alternatively, do
not dispute that it is correct. When we apply the district court’s construction
of the claim term “meta-right” to independent claim 1, the scope of this
original claim includes the newly added feature in proposed, substitute
independent claim 37—namely, “the meta-right is not itself a usage right
because exercising the meta-right does not result in action to the content.”
Although we recognize that proposed, substitute independent claim 37
includes additional substantive changes, e.g., it recites “item of content”
instead of “item” and “a usage right or another meta-right” instead of “a
right,” this difference in language does not result in a change in scope from
independent claim 1, but only seeks to provide proper antecedent basis for
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the newly added feature identified above. See Tr. 57:8–60:6. Based on the
particular circumstances of this case, we determine that Patent Owner has
demonstrated sufficiently that proposed, substituted independent claim 37
and independent claim 1 are “substantially identical” within the meaning of
§ 252.
8. Summary
For the foregoing reasons, Patent Owner has demonstrated by a
preponderance of the evidence that proposed, substitute independent claim
37 satisfies the requirements of 37 C.F.R. § 42.221 and is patentable over the
prior art. Accordingly, we grant Patent Owner’s request to cancel
independent claim 1 of the ’280 patent and replace it with proposed,
substitute independent claim 37.
E. Patent Owner’s Motion for Observation
Patent Owner filed a Motion for Observation on the cross-
examination testimony of Petitioners’ rebuttal witness, Dr. Goldberg. Obs.
Petitioners filed a Response to Patent Owner’s Motion for Observation.
Obs. Resp. To the extent Patent Owner’s Motion for Observation pertains to
testimony purportedly impacting Dr. Goldberg’s credibility, we have
considered Patent Owner’s observations and Petitioners’ responses in
rendering this Final Written Decision, and accorded Dr. Goldberg’s rebuttal
testimony appropriate weight where necessary. See Obs. 1–3; Obs. Resp. 1–
3.

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III. CONCLUSION
Petitioners have demonstrated by a preponderance of the evidence that
(1) claims 1, 5, and 11 of the ’280 patent are anticipated under § 102(b) by
Stefik; and (2) these same claims are unpatentable under § 103(a) over the
combination of Stefik and the knowledge of one of ordinary skill in the art.
Patent Owner has demonstrated by a preponderance of the evidence that
proposed, substitute independent claim 37 satisfies the requirements of 37
C.F.R. § 42.221 and is patentable over the prior art.

IV. ORDER
In consideration of the foregoing, it is
ORDERED that claims 1, 5, and 11 of the ’280 patent are held to be
unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Amend is
GRANTED; and
FURTHER ORDERED that, because this is a Final Written Decision,
parties to this proceeding seeking judicial review of our decision must
comply with the notice and service requirements of 37 C.F.R. § 90.2.

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For PETITIONERS:

Robert R. Laurenzi
Kaye Scholer LLP
robert.laurenzi@kayescholer.com

Jeffrey P. Kushan
Michael R. Franzinger
Thomas A. Broughan
Sidley Austin LLP
iprnotices@sidley.com
mfranzinger@sidley.com
tbroughan@sidley.com

For PATENT OWNER:

Timothy P. Maloney
Nicholas T. Peters
Fitch Even Tabin & Flannery LLP
tpmalo@fitcheven.com
ntpete@fitcheven.com

Robert A. Cote
McKool Smith, P.C.
rcote@mckoolsmith.com