On June 21, 2016, the PTAB issued a Final Written Decision in CBM2015-00040 (consolidated with CBM2015-00160) where both Google and Apple challenged the patentability of ContentGuard’s U.S. Patent No. 7,774,280, entitled “System and Method for Managing Transfer of Rights using Shared State Variables.” In that decision, the Board agreed with the petitioners that the existing claims of the ‘280 patent were unpatentable, but granted ContentGuard’s Motion to Amend. The Board also provided an advisory opinion that the amended claims were substantially identical to the to-be-cancelled existing claims, such that ContentGuard may not be hampered by intervening rights.
The ‘280 patent generally relates to a method and system for managing the transfer of rights associated with digital works using shared state variables. According to the ’280 patent, one issue impeding the widespread distribution of digital works is a lack of ability to enforce the rights of content owners because content owners lack control over downstream parties unless they are privy to transactions with the downstream parties. The ‘280 patent purports to address this alleged problem by attaching rights and meta-rights to content, where meta-rights can be asserted to generate additional downstream rights.
In their petitions, both Google and Apple argued that the claims of the ‘280 patent were anticipated and obvious based on the Stefik reference. One issue was the construction of the term “meta-rights.” In its institution decision, the Board adopted an express definition of meta-rights from the specification that left the door open for a meta-right to have an “action to content” such as playing or viewing the content. During trial, ContentGuard argued the Board should adopt the district court’s construction, which explicitly excluded rights with “action to content” from the definition of a meta-right. In the alternative, ContentGuard presented a Motion to Amend that made this limitation on the scope of “meta-rights” explicit in the claims.
In the Final Written Decision, the Board declined to adopt the district court’s narrowed construction of meta-rights under its Broadest Reasonable Interpretation standard, and found the existing claims of the ‘280 patent both anticipated and obvious based on the Stefik reference. The Board then turned to the Motion to Amend. The Board found that ContentGuard successfully made the showings necessary for a motion to amend, including making an amendment responsive to an issue in the trial, making a wholly-narrowing amendment, showing written description support for the amendment, and construing claim terms newly added by the amendment.
ContentGuard differentiated the amended claims over various references (including Stefik), as well as references at issue in corresponding district court matters. Petitioners did not present any additional prior art references, instead arguing the amended claims were still anticipated and obvious based on Stefik.
In the Final Written Decision, the Board agreed with ContentGuard that the amendments made the difference in showing patentability over Stefik and the knowledge of one of ordinary skill in the art. The Board found that petitioners had not made a sufficient showing as to why one of ordinary skill in the art would be inclined to make modifications to Stefik to arrive at the claimed subject matter. Thus, the Board granted the Motion to Amend.
Interestingly, the Board also granted ContentGuard’s request to find the amended claims substantially identical to the unamended claims for purposes of whether intervening rights would be generated. The Trial Practice Guide states: “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.” Thus, the Board applied the district court’s interpretation in evaluating ContentGuard’s request. The Board found that ContentGuard had incorporated the district court’s construction of meta-right explicitly into the claims, and as a result, the scope of the claims would not change when viewed by the district court. The Board thus found the claims substantially identical. It will be interesting to watch whether the district court agrees and what weight it gives the PTAB’s advisory opinion on this issue.