UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

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1 Filed on behalf of: HULU, LLC et al. By: Michael T. Rosato Jennifer J. Schmidt WILSON SONSINI GOODRICH & ROSATI 701 Fifth Avenue Suite 5100 Seattle, WA Tel.: Fax: Paper No. Filed: June 3, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD HULU, LLC, NETFLIX, INC., SPOTIFY USA INC., and VIMEO, LLC Petitioners v. IMTX STRATEGIC, LLC Patent Owner Patent No. 7,269,854 PETITION FOR COVERED BUSINESS METHOD REVIEW OF U.S. PATENT NO. 7,269,854

2 TABLE OF CONTENTS Page I. INTRODUCTION... 1 A. Overview of the 854 Patent... 1 B. Brief Overview of the Prosecution History... 3 C. Priority Date of the 854 Patent... 4 D. Level of Ordinary Skill at the Relevant Time... 5 E. Brief Overview of the Scope and Content of the Prior Art... 6 II. GROUNDS FOR CBM ELIGIBILITY AND STANDING A. The 854 Patent Is a Covered Business Method Patent Patent Claims Are Fundamentally Financial in Nature Patent Claims Are Not Directed to a Technological Invention B. Petitioners Have Been Sued for Infringement of the 854 Patent and Are Not Estopped III. MANDATORY NOTICES UNDER 37 C.F.R IV. STATEMENT OF THE PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED V. CLAIM CONSTRUCTION VI. EXPLANATION OF GROUNDS FOR UNPATENTABILITY A. Claims 1-23 Are Invalid under 35 U.S.C The 854 Patent Claims Are Directed to an Abstract Idea of Delivering Media Files to a User via a Communications Network i-

3 2. The 854 Patent Claims Fail to Transform the Abstract Idea into a Patentable Invention B. Claims 1-2, 6, 12, and 14 Are Invalid under 35 U.S.C. 103 over Hooper and Li C. Claims 3-5 and Are Invalid under 35 U.S.C. 103 over Hooper, Li, and Kohl D. Claims 7-11 and Are Invalid under 35 U.S.C. 103 over Hooper, Li, and Hickey E. Claims 13 and 23 Are Invalid under 35 U.S.C. 103 over Hooper, Li, and Garcia-Molina VII. CONCLUSION IX. PAYMENT OF FEES UNDER 37 C.F.R (a) AND XI. APPENDIX LIST OF EXHIBITS ii-

4 I. INTRODUCTION Pursuant to the provisions of 35 U.S.C. 321, 18 of the Leahy-Smith America Invents Act ( AIA ), and 37 C.F.R et seq., Hulu, LLC; Netflix, Inc.; Spotify USA Inc.; and Vimeo, LLC (collectively, Petitioners ) respectfully request review of each of claims 1-23 of U.S. Patent No. 7,269,854 to Simmons et al. ( the 854 patent, Ex. 1001), issued on Sep. 11, 2007, and currently assigned to imtx Strategic, LLC ( Patent Owner ). This Petition demonstrates, by a preponderance of the evidence, it is more likely than not that claims 1-23 of the 854 patent are unpatentable under 35 U.S.C. 101 ( Section 101 ) and over prior art. Claims 1-23 of the 854 patent should be found unpatentable and canceled. A. Overview of the 854 Patent The 854 patent claims systems and methods for delivering media files to a user via a communications network, and is entitled Transaction System for Transporting Media Files from Content Provider Sources to Home Entertainment Devices. Ex at Title; see also id. at 1:16-21 (The 854 patent relates to delivering digital media files (e.g., audio and/or video) from content provider sites to home user entertainment systems (e.g., television sets and/or audio equipment) via communications networks including public networks, e.g. Internet, and private networks, e.g., intranet and extranet. ), 2:6-12 ( The acquisition of the media files forms part of a transaction initiated by a user via a communications network for enabling content providers to download requested media files to the user. The transaction is characterized by a procedure which debits a user s payment account and credits a content provider s receipt account. ). -1-

5 The 854 patent has two independent claims claims 1 and 14. Broad method claim 14, for example, is generally directed to delivering media files to a user via a communications network, including the steps of: (1) enabling users to generate a transaction request for a media file including user identification information, (2) communicating the request to a transaction server, (3) causing the transaction server to verify the user identification information and to identify which media server stores the requested media file, (4) enabling the transaction server to instruct the media server to download the identified media file to the user, (5) causing the media server to uniquely encrypt the requested media file and download the file directly to the user site, and (6) enabling only the requesting user to decrypt the encrypted media file for playback at the user site. Claim 1 is a system claim that recites similar limitations as claim 14, except it refers to media servers as provider sites. In sum, the 854 patent claims are directed to delivering media files to a user via a communications network. The 854 patent also has 21 dependent claims (claims 2-13 and 15-23) that add limitations relating to encryption keys, local storage, a user interface, a program guide, user identification, and electronic banking. As discussed infra in Section VI.A, neither the independent nor the dependent claims limit the claimed subject matter beyond abstract notions and merely incorporate well-understood, conventional concepts. Briefly, claims 1-23 are invalid because they claim ineligible subject matter the abstract idea of delivering media files to users via a communications network and the claim limitations, such as generating and sending requests to servers, are merely conventional computer implementation -2-

6 features that do not meaningfully limit the claims beyond this abstract idea. Furthermore, as explained in the accompanying Declaration of Darrell D.E. Long, Ph.D., and addressed in further detail in infra Sections VI.B-0, the claims of the 854 patent would not have been considered new or nonobvious to a person of ordinary skill in the art ( POSITA ) at the time of filing. B. Brief Overview of the Prosecution History During prosecution of the involved case, the applicants repeatedly argued that the claimed invention was distinguishable over the prior art because of the feature of transferring a media file directly from a provider site to a requesting user site (emphasis in original) without the media file having to be stored or processed by the transaction server. See Ex at 0022 (Reply to Office Action of 11/21/2006); see also id. at (Reply to Final Office Action of 08/08/2006); id. at (Reply to Office Action of 03/02/2006); id. at (Reply to Office Action of 08/05/2005). The examiner eventually concurred in the Notice of Allowance, noting that the prior art fails to teach the receiving a request for a file at a transaction server and authorizing a provider to send the requested file directly to the client and that the prior art instead generally teaches all traffic between the client and provider being transmitted through the transaction server. Id. at Thus, the purported point of novelty for the 854 patent claims appears to be not in the media purchase/transfer process itself, but in embodying the process in a distributed computer/server context. In particular, the asserted point of novelty was the direct transfer of a media file from a provider site to a user site without transmission through a transaction server. As set forth below, such -3-

7 distributed computer systems were, in fact, well known at the time as was the transfer of media files in the manner recited in the 854 patent claims. C. Priority Date of the 854 Patent The 854 patent claims priority to a provisional application (Application No. 60/097,678, filed on August 23, 1998), but is not entitled the benefit of that filing date under 35 U.S.C In their replies to office actions rejecting all claims as unpatentable over prior art, Ex at , , the applicants argued that the application was entitled to priority based on the provisional application and that the examiner s prior art rejections were inapplicable due to the earlier priority date. Id. at , Further, on December 2, 2005, the applicants filed a Petition pursuant to 37 CFR [1.]78 in which the applicants requested that the application be accorded a priority date based on the provisional application. Id. at The Office of Petitions granted the petition on January 5, Id. at The 678 provisional application fails to adequately describe the subject matter claimed in the involved 854 patent. The provisional application contains no disclosure of encryption or decryption. See generally Ex All 854 patent issued claims, however, recite limitations requiring encryption and decryption. Independent claim 1 includes limitations requiring a media file encryptor, authorization for uniquely encrypting the identified media file and for downloading the encrypted media file, a media file decryptor, and said requesting player/receiver decryptor is capable of decrypting said encrypted media file. Independent claim 14 similarly includes limitations requiring causing said -4-

8 identified media server to uniquely encrypt the identified media file and enabling only the requesting user to decrypt said encrypted media file. Because claims 2-13 and depend from claims 1 and 14 respectively, they include the same encryption and decryption limitations. As such, the provisional application does not adequately describe the subject matter recited in the issued 854 patent claims and does not support the claimed priority date. See New Railhead Mfg. LLC v. Vermeer Mfg. Co., 298 F.3d 1290, (Fed. Cir. 2002). In contrast, the PCT application does contain disclosure of encryption and decryption. Thus, the earliest priority date to which the 854 patent is entitled is August 19, 1999 (filing date of PCT application) not August 23, 1998 (filing date of provisional application). As a result, prior art cited herein that is dated after August 23, 1998 and before August 19, 1999 e.g., Secure Container Technology as a Basis for Cryptographically Secured Multimedia Communication by Ulrich Kohl ( Kohl ) (Ex. 1008), published in September 1998 qualifies as prior art. D. Level of Ordinary Skill at the Relevant Time A POSITA in the relevant field at the time of the August 1999 priority date would have had experience working with digital media file delivery systems and methods. Ex This familiarity would include knowledge of home entertainment systems, server systems, encryption/decryption, storage, user interfaces, program guides, and user identification, including how to interface with special purpose components, such as video encoder/decoder chips and TV tuners. Id. This familiarity would also include knowledge of protocols, such as those used for data transmission and for interfacing with electronic banking systems. Id. A -5-

9 POSITA would know that delivering media files directly to a user could be conducted via a variety of systems and methods. Id. A POSITA would include someone who has a B.S. degree in computer science, electrical engineering, or computer engineering in addition to two or more years of work experience, or its equivalent, relating to the field of digital media file delivery. Id. E. Brief Overview of the Scope and Content of the Prior Art The concept of delivering media files to a user was known prior to the priority date of the 854 patent. As Dr. Long explains, long before August 1999 (or even August 1998), numerous systems, including distributed computing systems, existed that could deliver media files via a network, including delivering media files directly to a user from a provider site without delivering through an intermediate transaction server. Id. 52. As one example of a distributed computer system that could deliver media files directly to a client, attention is directed to U.S. Patent No. 5,671,225 to Hooper et al. ( Hooper ) (Ex. 1006) issued on September 23, Ex at 1; Ex Hooper discloses a distributed interactive multimedia service system. Ex at Abstract; Ex In the Hooper system, a client set-top box generates a request. Ex at 5:25-32; Ex After validating the client identity, a session manager sends an allocate request to a resource manager, a create request to a media stream manager, and a launch request to launch the client s selected service on any of a plurality of media servers. Ex at 5:26-67; Ex [T]he services can send video streams directly to the client. Ex at 5:61-67; Ex Another example of a distributed system for direct file distribution is Swift. -6-

10 Id. 57. The Swift system is a distributed storage architecture used in video distribution systems, as disclosed in Swift: A Storage Architecture for Large Objects by Luis-Felipe Cabrera and Darrell D.E. Long, published in 1991 ( Cabrera I ) (Ex. 1011) and Exploiting Multiple I/O Streams to Provide High Data-Rates by Luis-Felipe Cabrera and Darrell D.E. Long, published in 1991 ( Cabrera II ) (Ex. 1012). Id. 57. In Swift, a distribution agent was responsible for assembling data streams, distributing data, and encryption and decryption. Ex at 124; Ex Swift also had a storage mediator that was responsible for directory services, authentication, access control, transfer plans, and storage allocation. Ex at 124; Ex Further, Swift had multiple storage agents that were responsible for storing and retrieving data. Ex at 124; Ex A client could request a video, for example, that was then sent directly from the storage agent to the client. Ex at 124, Fig. 1; Ex An example of a distributed file system for media distribution with interactive menus is the Tiger Shark file system developed by IBM in the mid- 1990s, as disclosed in The Tiger Shark File System by Roger L. Haskin and Frank B. Schmuck, published in 1996 ( Haskin I ) (Ex. 1013) and in A System for the Delivery of Interactive Television Programming by Roger L. Haskin and Frank L. Stein, published in 1995 ( Haskin II ) (Ex. 1014). Id. 60. Tiger Shark was a distributed file system used in large-scale interactive television systems. Ex at 226; Ex In the Tiger Shark system, a control server responded to requests from client set-top boxes, and videos were sent from distributed data servers to the set-top boxes. Ex at 212; Ex IBM implemented -7-

11 successful commercial trials of Tiger Shark between 1994 and 1996 on systems that included interactive menus. Ex at 230; Ex Distributed Multimedia Systems by Victor O.K. Li, et al. ( Victor Li ) (Ex. 1015), published in July 1997, is another example of a prior art distributed system for direct media delivery to a client. Id. 63. Victor Li discloses a number of distributed multimedia systems and describes a video-on-demand infrastructure including set-top boxes, a service gateway, and video servers, operating via a broadband network. Ex at ; Ex Using set-top boxes, subscribers are connected to the video servers and can browse the video selections and interact with the services via VCR-like functions. Ex at 1074; Ex The interaction occurs via a service gateway that provides functions, such as directory services ; mapping from service identity (ID) to corresponding location and program provider ; controlling, coordinating, and signaling for multimedia session establishment ; subscriber profile maintenance and billing ; and secure communication... including... encryption. Ex at ; Ex Each video server stores a large number of digitized videos and serves those videos to set-top boxes upon request. Ex at 1072; Ex As demonstrated in figure 9, a video server can communicate directly with a set-top box via the broadband network without communicating with the service gateway. Ex at 1072, Fig. 9; Ex In summary, while the patent owner argued direct file delivery to the client as distinguishing the claimed subject matter from the prior art in order to gain allowance of the claims curing ex parte prosecution, such a feature is insufficient -8-

12 to differentiate from the prior art. This is illustrated above with regard to references Hooper, Swift, Haskin I, Haskin II, and Victor Li and is discussed in further detail below with specific prior art invalidity grounds advanced herein. Moreover, while other claimed features, such as data encryption, were not specifically argued during ex parte prosecution as distinguishing features, a review of the prior art demonstrates additional recited claim features similarly fail to distinguish the claims from the prior art at the time. With specific regard to encryption techniques, prior art systems for delivering media files and making use of encryption as claimed were well known. Id. 66. In fact, the unique encryption and decryption of media files was known for decades prior to the priority date of the 854 patent. Id. 72. For example, Using Encryption for Authentication in Large Networks of Computer by Roger M. Needham, et al. ( Needham ) (Ex. 1016), published in December 1978, discloses numerous different encryption protocols, including conventional algorithms that are implemented using a dynamically generated secret key that is used for encryption and decryption. Ex at ; Ex More recently, Security Enhanced MPEG Player by Yongcheng Li et al. ( Li ) (Ex. 1007) described the use of both secret key and public key encryption for use with the encryption and decryption of digital video in continuous, real-time media streams. Ex at 1; Ex , 67. Kohl describes the use of a Cryptolope container that stores information, such as digital video, using an encryption key that can be used in a purchasing transaction. Ex at 33; Ex , 71. The remaining features of the 854 patent claims also existed in the prior art, -9-

13 as is described by U.S. Patent No. 5,475,835 to Hickey ( Hickey ) (Ex. 1009), issued on December 12, 1995, which discloses the use of program guides in computer-based home entertainment systems (Id. 74, 76; see also generally Ex. 1009), and Safeguarding and Charging for Information on the Internet by Hector Garcia-Molina et al. ( Garcia-Molina ) (Ex. 1010), published in February 1998, which discloses electronic banking transactions relating to delivery of media files (Id. 77, 79; see also generally Ex. 1010). Every limitation of the 854 patent claims was disclosed in the prior art. Specifically, Hooper describes the aspects of a distributed computing system for delivering media files directly to a user from a provider site without delivering through an intermediate transaction server, but does not specifically describe encryption techniques for the delivered content. Li, however, describes encryption techniques for real-time encryption and decryption of digital video and would reasonably have been combined with Hooper at the time. While the combination of Hooper and Li does not specifically describe techniques for including the encryption key in the transaction request, the use of program guides, or electronic banking transactions relating to digital media files, those aspects are described in Kohl, Hickey, and Garcia-Molina respectively, each of which would have reasonably been combined with Hooper and Li at the time. Further discussion of the prior art vis-a-vis the 854 patent claims is set forth in Sections VI.B-0. II. GROUNDS FOR CBM ELIGIBILITY AND STANDING Under 37 C.F.R (a), the 854 patent is a covered business method patent. Petitioners may file this petition under 37 C.F.R (a) and (b). -10-

14 A. The 854 Patent Is a Covered Business Method Patent The AIA defines a covered business method patent as 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. AIA 18(d)(1); see also 37 C.F.R (a). The PTAB interprets covered business method patent broadly to encompass patents claiming activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity. See 77 Fed. Reg , (discussing the legislative history of the AIA); see also SAP Am., Inc. v. Versata Dev. Grp., Inc., No. CBM , Paper No. 36 at 23 (P.T.A.B. Jan. 9, 2013). While covered business methods do not include patents for technological inventions, a single claim directed to a covered business method is sufficient to qualify a patent for covered business method review. See 77 Fed. Reg. at 48, Patent Claims Are Fundamentally Financial in Nature Each of the 854 patent claims recite executing user transaction requests and, therefore, are directed to activities that are financial in nature or, at a minimum, incidental or complimentary to a financial activity. The specification underscores this point in defining the claimed transactions as characterized by a procedure which debits a user s payment account and credits a content provider s receipt account. Ex at 2:9-12; see also, id. at 6: Apple Inc. v. Sightsound Tech., LLC, CBM , slip op. at *13 (PTAB Oct. 8, 2013) (Paper 17) (finding that the sale of digital content on the internet the electronic transfer of funds are financial activities). -11-

15 Claims 14 and 23 are illustrative of the financial nature of the 854 patent claims. Claim 14 encompasses financial transactions relating to the purchase or rental of digital media (e.g., method for executing user transaction requests ). Dependent claim 23 furthermore explicitly recites initiat[ing] an electronic banking transaction... to debit a user account and/or credit a media server account. Because claim 23 depends from claim 14, the scope of claim 14 necessarily encompasses the limitations of claim 23. Claim 14 thus encompasses an electronic banking transaction that is fundamentally financial. The financial nature of claim 14 is confirmed by the specification, which explains how the systems and methods of the 854 patent are used in the sale and rental of media files. For example, the specification explains that the purported invention involves a transaction that is characterized by a procedure which debits a user s payment account and credits a content provider s receipt account, Ex at 2:1-12, and that the system provides a secure electronic commerce system that enables media owners to securely sell or rent media to users, id. at 6: Accordingly, the 854 patent claims, including claims 14 and 23, encompasses a fundamentally financial activity that falls within the scope of a covered business method Patent Claims Are Not Directed to a Technological Invention To qualify as a technological invention, a claim must (1) recite a technological feature that is novel and unobvious over the prior art and (2) solve a technical problem using a technical solution. 37 C.F.R (b). The director has explained that the following claim-drafting techniques are typically -12-

16 insufficient to establish a technological invention: (1) reciting known technologies such as computer hardware, communication or computer networks, software, memory,... display devices or databases, (2) reciting prior art technology to accomplish a process or method, even if that process or method is novel and nonobvious, and (3) [c]ombining prior art structures to achieve the normal, expected, or predictable result of that combination. 77 Fed. Reg. 48,763, 48,764. The 854 patent claims, however, do nothing more than recite routine steps for delivering digital media using conventional technology and are therefore not technological inventions. Ex A review of the claims as a whole reveals any feature that might ostensibly be considered technical would have been considered conventional or otherwise lacking novelty or nonobviousness over the prior art. This is particularly apparent with regard to claim 14, addressed below. As an initial matter, the recited conventional components that perform the method of claim 14 are insufficient to establish a technological invention, either by representing a requisite technological feature or a technical solution to a problem. While claim 14 recites a user site with a television set and/or audio equipment, a transaction server, media servers, the Internet, and encryption/decryption, these were well-known technologies that had been widely implemented for digital media delivery. Id. 22. The 854 patent itself acknowledges that such components and techniques were conventional. For example, the specification refers to existing systems for transferring media files that include a video server and set top box and existing home entertainment systems. Ex at 1:22, 1:38-39, 1:65-66; Ex The user site includes nothing more than -13-

17 conventional computer components, the playback devices are simply television sets and audio systems typically found in the home, and both the transaction server and the media sites are conventional servers that contain conventional components. Ex at 2:3-7, 5:7-26, 5:27-30, 7:25-27; Ex The unique encryption/decryption was also conventional, and the specification acknowledges that the purported invention can use any existing encryption algorithms such as PGP and the Unix crypt command. Ex at 8:29-32 (emphasis added); Ex Thus, claim 14 lacks a technological feature that was novel and nonobvious because both the methodology and the implementing hardware components of claim 14 were conventional and routine. Further, claim 14 as a whole fails to recite a technological feature that is novel and nonobvious over the prior art. As explained in Section VI.A below, claim 14 recites (1) generating a transaction request with information identifying the user and a requested media file (2) communicating the request to a server, (3) verifying the user and identifying which media server stores the requested file, (4) instructing the media server to download the file to the user, (5) uniquely encrypting the file and downloading it directly to the user, and (6) decrypting the file for playback. Reviewing the claim as a whole, each of the recited steps has long been a routine part of digital media delivery systems. Id. 26. First, the purported point of novelty argued during ex parte examination and forming the basis of claim allowance fails to provide a technological feature that differentiates from technologies existing in the prior art at the time. As explained in Section I.E, the asserted point of novelty was the direct transfer of a media file -14-

18 from a provider site to a user site without transmission through a transaction server. This aspect of the claims, however, cannot reasonably constitute a technological feature for the purposes of CBM eligibility because existing media delivery systems already utilized distributed architectures to provide media files from remote data servers. This is explained in detail above in Section I.E (describing distributed systems such as Swift, Tiger Shark, and Victor Li). A review of claim 14 as a whole in view of prior art available at the time underscores the fact that each and every aspect of the claimed subject matter was known in the context of digital media delivery systems. Id. 26. This is explained in this section and in further detail supra Section I.E (describing various prior art technology as having taught all features of the current claims) and infra Section VI.B (explaining how prior art disclosed each aspect of claim 14). (Identification of Sections I.E and VI.B should not be taken as mere reference to the detailed description of prior art aspects vis-a-vis the 854 patent located therein, but as logical indication that additional relevant discussion is provided in multiple other locations in the petition, none of which should be read in isolation.) For example, Hooper describes sending requests including user and media file information to a server, as in steps one and two. See Ex at 5:24-33, 6:47-49; Ex Hooper s system then verifies the user and initiates a direct connection between the media server storing the requested content and the user, as in steps three and four. See Ex at 5:26-67, Figs. 2-4; Ex Direct downloads and unique encryption, as recited in step five, were also conventional. For example, Hooper discusses the direct delivery of media files to users, and Li -15-

19 discloses unique encryption of digital media. See Ex at 5:26-67; Ex at 5-6; Ex Li also discloses subsequent decryption of the media file for playback, as in step six. See Ex at Abstract, 6; Ex The steps of claim 14 are thus well-known, routine techniques for delivering digital media. In further regard to the second prong of Rule 301(b), claim 14 also fails to solve a technical problem using a technical solution. As noted above, every aspect of claim 14 was conventional and well-known, so it did not solve any problem, let alone a technical one. The 854 patent claims to address the inefficiencies of video on demand systems that utilize a broadcast model to provide unique, dedicated streams for users, but claim 14 recites no novel or unobvious means of doing so. Ex at 1: Numerous systems already provided digital media delivery without utilizing a broadcast model, so the purported problem simply did not exist at the time of filing. See supra Section I.E (describing various packet-enabled digital media delivery systems). The 854 patent mentions a concern that existing video on demand systems cannot access files outside their network. Ex at 1: This aspect is not recited in claim 14. To the extent claim 14 even addresses this concern, existing media delivery systems already utilized distributed architectures to provide media files from remote servers. See supra Section I.E (describing distributed systems such as Swift, Tiger Shark, and Victor Li). The 854 patent also claims that unspecified [s]pecial purpose home terminals provided Internet access but required new purchases and training, did not allow storage or playback via existing home entertainment systems, and required a dedicated computer. See Ex at 1: Again, however, other -16-

20 prior art already addressed such concerns, and regardless, claim 14 offers no solution, let alone a technical solution. As described, e.g., above in Section I.E, set-top boxes in Hooper and Victor Li as well as storage and playback provided by Swift and Tiger Shark all described the aspect of a distributed computer system that could deliver media files directly to a client without transmission through a transaction server. See, e.g., Ex at 5:25-67; Ex at 124; Ex at ; Ex at 226; Ex at 212. Thus, claim 14 and the 854 patent as a whole do not provide a technical solution to a technical problem. While claim 14 alone is sufficient to establish covered business method review standing, all claims of the 845 patent are similarly covered business methods. As discussed here and below in Sections VI.B-0, every claim of the 854 patent would have been obvious to a person of ordinary skill in the art in view of prior art references such as Hooper, Li, Kohl, Garcia-Molina, and Hickey. Ex In fact, the 854 patent fails to describe a single new technology or an improvement to existing technology for delivering digital media to users. Id. 41. The claims represent nothing more than the use of known technologies to perform routine steps for delivery of digital media to users over the Internet, and the combination of prior art components and techniques does not achieve any result that is an abnormal, unexpected, or unpredictable. Id. The 854 patent, and claim 14 in particular, thus fails to recite a new and nonobvious technical feature and fails to provide a technical solution to a technical problem. Covered business method review of the 854 patent is therefore appropriate. B. Petitioners Have Been Sued for Infringement of the 854 Patent -17-

21 and Are Not Estopped Petitioners have been sued for infringement of one or more claims of the 854 patent. Petitioner Hulu, LLC was sued by Patent Owner on April 25, imtx Strategic, LLC v. Hulu, LLC, No. 1:14-cv GMS (D. Del. Apr. 25, 2014) (attached as Ex. 1017). Petitioner Netflix, Inc. was sued by Patent Owner on April 25, imtx Strategic, LLC v. Netflix, Inc., No. 1:14-cv GMS (D. Del. Apr. 25, 2014) (attached as Ex. 1018). Petitioner Spotify USA Inc. was sued by Patent Owner on March 11, imtx Strategic, LLC v. Spotify USA Inc., No. 1:14-cv GMS (D. Del. Mar. 11, 2014) (attached as Ex. 1019). Petitioner Vimeo, LLC was sued by Patent Owner on November 19, imtx Strategic, LLC v. Vimeo, LLC, No. 1:13-cv GMS (D. Del. Nov. 19, 2013) (attached as Ex. 1020). Thus, Petitioners meet the requirement of AIA 18(a)(1)(B) and 37 C.F.R Petitioners are not estopped from challenging the claims on the grounds identified herein, per 37 C.F.R (b). III. MANDATORY NOTICES UNDER 37 C.F.R Real Party: Under 37 C.F.R. 42.8(b)(1), Petitioners identify Hulu, LLC; Netflix, Inc.; Spotify USA Inc.; and Vimeo, LLC as the real parties-in-interest. Related Matters: Under 37 C.F.R. 42.8(b)(2), Petitioners identify: imtx Strategic, LLC v. Vimeo, LLC, No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. Spotify USA Inc., No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. Rhapsody International Inc., No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. Home Box Office Inc., No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. Hulu, LLC, No. 4:15-cv JSW (N.D. -18-

22 Cal.); imtx Strategic, LLC v. Netflix, Inc., No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. Verizon Commc ns Inc., No. 4:15-cv JSW (N.D. Cal.); imtx Strategic, LLC v. VUDU, Inc., No. 4:15-cv JSW (N.D. Cal.); Unified Patents Inc. v. imtx Strategic, LLC, No. IPR (P.T.A.B.). Lead and Back-Up Counsel: 37 C.F.R. 42.8(b)(3): Lead Counsel: Michael T. Rosato (Reg. No. 52,182) Back-up Counsel: Jennifer J. Schmidt (Reg. No. 58,844) Service Information 37 C.F.R. 42.8(b)(4): Petitioners hereby consent to electronic service. Post: WILSON SONSINI GOODRICH & ROSATI, 701 Fifth Avenue, Suite 5100, Seattle, WA Tel.: Fax: IV. STATEMENT OF THE PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED Petitioners challenge claims 1-23 of the 854 patent and request review of those claims under 35 U.S.C. 311 and AIA 6. The grounds of challenge Petitioners advance are that each of claims 1-23 of the 854 patent should be canceled as invalid and unpatentable as follows: Ground Claims Description Invalid as patent-ineligible under 35 U.S.C , 6, 12, 14 Obvious under 103 over Hooper and Li 3 3-5, Obvious under 103 over Hooper, Li, and Kohl -19-

23 4 7-11, Obvious under 103 over Hooper, Li, and Hickey 5 13, 23 Obvious under 103 over Hooper, Li, and Garcia-Molina V. CLAIM CONSTRUCTION A claim subject to covered business method review receives the broadest reasonable construction in light of the specification of the patent in which it appears. See 37 C.F.R (b). Claim terms are given their ordinary and customary meaning as would be understood by one of ordinary skill in the art. Phillips v. AWH Corp., 415 F.3d 1303, (Fed. Cir. 2005) (en banc). The broadest reasonable interpretation standard applicable here is broader than the claim construction standard applied by a district court. See In re Cuozzo Speed Techs., LLC, 778 F.3d 1271, 1274(Fed. Cir. 2015). As such, the constructions set forth herein, many of which are informed by Patent Owner s representations about the scope of the claims, should not be viewed as constituting Petitioners own construction of such terms for the purposes of the related district court litigation. A few terms that warrant discussion are identified and discussed below. connectivity device : Claim 1 recites the term connectivity device. The 854 patent discloses that systems in accordance with the invention preferably include... network connectivity devices for connecting the home user sites, the content provider sites, and the transaction server to the network. Ex at 2: [S]uitable broadband network connectivity devices [include], e.g., cable modems, digital subscriber line (DSL) modems, or very small aperture satellite (VSAT) Internet access systems. Id. at 4: Home user sites, for example, are connected to the network 11 (via a connectivity device 12). Id. at 4:

24 For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the connectivity device term is satisfied by a system capable of connecting to a network. user interface : Claims 1, 7, and 8 recite the term user interface. Figure 9 of the 854 patent discloses a functional diagram that describes a preferred embodiment of a user interface that includes an alphanumeric code entry function 214, a media selection function 26..., a display function , playback control functions and a hand held remote control 222 that replicates the player/receiver user interface functionality. Id. at 9:61-10:2. The diagram of Figure 10 shows a preferred embodiment of a panel forming the user interface for the player/receiver that includes a keypad array 234 and a display means 236. Id. at 10: The user can enter commands via the panel or the player/receiver remote. Id. Information is viewable on the display. Id. For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the user interface term is satisfied by a component by which a user can enter commands and view information. directly : Claims 1 and 14 recite the claim term directly. As discussed above in Section I.B, the applicants repeatedly emphasized that the claimed invention was distinguishable over the prior art because of the feature of transferring a media file directly from a provider site to a requesting user site without the media file having to be stored or processed by the transaction server. See Ex at 0022, , , The examiner noted that the prior art fails to teach the receiving a request for a file at a transaction server and -21-

25 authorizing a provider to send the requested file directly to the client and that the prior art instead generally teaches all traffic between the client and provider being transmitted through the transaction server. Id. at The 854 patent further discloses that direct transmission to the requesting player/receiver is implemented by using its IP address, assuming a typical TCP/IP format. Ex at 6: That is, the download instructions received from the transaction server contain the IP address of the requesting player/receiver which is then used by the provider site to download directly to the player/receiver. Id. at 6: For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the term directly is satisfied by disclosure of transmitting a file from a provider site to a player/receiver without the file being transmitted through a transaction server. unique[ly] : Claims 1, 2, 4, 14, 16, and 17 recite the term unique[ly] to modify encrypting. The 854 patent discloses that the encryption format uniquely targets the requesting player/receiver to prevent playback on any other device. Id. at 3: The process by which unique encryption occurs is the encryptor 74 utiliz[es]... the requesting player/receiver s local encryption key [to] encrypt[] the requested file. Id. at 5: This results in the requested file being uniquely dynamically encrypted such that it can only be played back on the requesting player/receiver 30. Id. at 5: For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the term unique[ly] in the context of encryption is satisfied by encryption using a key associated with only the requesting player/receiver. -22-

26 dynamically : Claims 4 and 5 recite the term dynamically. The 854 patent discloses that the files are dynamically encrypted at the content provider site by the encryptor 74 using a locally generated encryption key. Id. at 6:2-4. The 854 patent describes that the encryptor 40 dynamically generates an encryption key that is local to the media server 70 and the requested files are uniquely encrypted for download using the dynamically generated encryptor key. Id. at 8:46-48, 8:49-50; see also id. at 9:38-42 ( [T]he encryptor 74 at the content provider site containing the requested media files uses... a dynamic encryption key generated by the encryptor.... ). For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the term dynamically in the context of encrypting is satisfied by generating an encryption key for each session of requests for media file to be encrypted, and dynamically in the context of decrypting the media file is satisfied by decryption using the key generated for each session of media requests. concurrently : Claims 4 and 5 recite the term concurrently. The 854 patent does not use the term concurrently in the specification (outside the claims) except for once in the Abstract where it states that the requesting player/receiver is uniquely capable of decrypting a downloaded file concurrent with playing back the file. Id. at Abstract. However, the 854 patent does appear to address the meaning of concurrently when it discloses that during playback, the player/receiver decrypts and decodes the files from the local storage device and outputs them for viewing and listening via the home user television set and/or audio system. Id. at 3:58-62; see also id. at 9:52-55 ( If the user decides to start -23-

27 the playback, the player/receiver uses its local encryption key to dynamically decrypt the file during playback as shown in operation 206. ). For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the term concurrently is satisfied by disclosure of decryption of a file occurring during playback of the file. digital storage device / store[d] : Claims 7 and 9 recite the term digital storage device, and claims 19 and 20 recite the related term store[d]. The 854 patent discloses that files downloaded to the player/receiver are preferably stored either on the player/receiver s local or storage means, e.g., a hard disk drive, or on the player/receiver s archive storage means, e.g., removable storage media such as magnetic tape or recordable CD-ROMs. Id. at 3: The 854 patent further discloses that the subsystem 30 includes a local storage device 32, e.g., a hard disk drive, for storing and retrieving media files via a bidirectional path 34 and that the player/receiver subsystem 30 can also be optionally coupled to an archive storage device 36, e.g., a removable storage medium device, via a bi-directional path 38. Id. at 5:9-14. For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, digital storage device and store[d] in claims 7 and 9 are satisfied by disclosure of internal or external storage, including archive storage, such as removable media (and storage therein). program guide : Claims 9-11 and recite the term program guide. The 854 patent discloses that a list of available media files is... transmitted to the player/receiver which in turn displays the list as an interactive program guide -24-

28 or menu. Id. at 3: Specifically, the title names of the downloaded files are added to the online program guide, the user is prompted to browse the program guide or to browse titles, and the user browses the on screen or printed program guide and selects media title codes. Id. at 8:19-21, 9:4-6, 9: For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the term program guide is satisfied by a listing of media file titles. means for displaying a program guide: Claim 9 recites means for displaying a program guide listing media files stored by the digital storage device therein, and claim 10 recites means at each of said user sites for displaying said program guide. These limitations are means-plus-function limitations and are therefore interpreted under 112, 6. Although the specific functions differ, the crux of both terms is that the means are for displaying a/said program guide. The corresponding structure in the patent is The display means 236 (e.g., a vacuum fluorescent display). Id. at 10: The 854 patent indicates that the browseable online program guide [is] viewable via the display 236. Id. at 10: The display can be a conventional television set/video display 42. Id. at 5: For at least these reasons, a POSITA would understand that, under the broadest reasonable interpretation in light of the specification, the terms means for displaying a program guide listing media files stored by the digital storage device therein and means at each of said user sites for displaying said program guide are satisfied by either a conventional television set or video display performing the function of displaying a program guide. -25-

29 VI. EXPLANATION OF GROUNDS FOR UNPATENTABILITY Claims 1-23 of the 854 patent are invalid on multiple grounds. The references and the grounds are not cumulative to each other given the different disclosures of the references. Accordingly, this Petition, supported by the declaration testimony of Dr. Long, demonstrates that it is more likely than not that each of claims 1-23 of the 854 patent is unpatentable. A. Claims 1-23 Are Invalid under 35 U.S.C. 101 Claims 1-23 are invalid for claiming ineligible subject matter: the abstract idea of delivering media files to users via a communications network. Section 101 defines patent-eligible subject matter. See, e.g., Alice Corp. Pty. Ltd. v. CLS Bank Int l., 134 S. Ct. 2347, 2354 (2014). A patent may generally be granted for any new and useful process, machine, manufacture, or composition of matter or any improvement thereof, but the Supreme Court has repeatedly recognized that laws of nature, natural phenomena, and abstract ideas are not patentable. Id. The Supreme Court recently confirmed abstract ideas are not eligible for patent protection under Section 101. Alice, 134 S. Ct. at 2347; see also Bilski v. Kappos, 130 S. Ct (2010); Ultramercial, Inc. v. Hulu, 772 F.3d 709 (Fed. Cir. 2014). The Supreme Court also established a two-part test for determining whether a claim is directed to ineligible subject matter. Alice, 134 S. Ct. at 2355; Mayo v. Prometheus, 132 S. Ct. 1289, (2012). First, it must be determined whether the claims are directed to one of the patent-ineligible concepts, such as an abstract idea. Alice, 134 S. Ct. at Second, if the claims are directed to patent-ineligible subject matter, it must be determined whether the -26-

30 claim elements, alone or in combination, contain an inventive concept sufficient to transform the claimed idea into a patent-eligible application. Id. at Claim elements that rely on conventional steps to implement an abstract idea on a generic computer fail to transform abstract ideas into patent-eligible inventions. Id.; Ultramercial, 772 F.3d at 713; see also Bancorp Servs. L.L.C. v. Sun Life Assurance Co. of Canada, 687 F.3d 1266, (Fed. Cir. 2012); SAP, CBM , Decision to Institute at 29. The 854 patent covers a method and apparatus for delivering digital media files... from content provider sites to home user entertainment systems... via communications networks.... Ex at 1: Indeed, as discussed further below, the 854 patent is directed to a method for delivering media files to a user via a communications network and not to any improvement to technology for accomplishing that delivery. The limitations of the 854 patent claims do not meaningfully limit the claims beyond this abstract idea of delivering media files to the user. As a result, claims of the 854 patent are directed to patent-ineligible subject matter and are invalid under Section The 854 Patent Claims Are Directed to an Abstract Idea of Delivering Media Files to a User via a Communications Network As to the first prong of the test, the determination of patent eligibility begins with identifying whether the claims are drawn to an abstract idea. Alice, 134 S. Ct. at In Alice, the Supreme Court declined to delimit the contours of an abstract idea. Alice, 134 S. Ct. at 2357 ( In any event, we need not labor to delimit the precise contours of the abstract ideas category in this case. ). Under the Alice -27-

31 analysis, many different types of claims have been found to be directed towards patent-ineligible abstract ideas, including other claims relating to delivering media over the Internet. See Ultramercial, 772 F.3d at 714 (finding invalid claim directed towards delivering copyrighted media over Internet). Here, the 854 patent claims, like those in Ultramercial, recite an ordered combination of steps for delivering media with no particular concrete or tangible form. Id. at 715. They are drawn to nothing more than the abstract idea of delivering media files to a user via a communications network. Ex Both independent claims 1 and 14 expressly state that the claims are for a system or method for delivering digital media files via a communications network.... Ex. 1001, cls. 1 and 14; Ex That the claims are directed to the abstract idea of delivering media files to a user via a communications network is also reinforced by the specification. See, e.g., Ex at 1:16-20 ( This invention relates to systems for delivering digital media files... from content provider sites to home user entertainment systems... via communications networks.... ); id. at 2:3-6 ( This invention relates generally to a method and apparatus for enabling a user to acquire media files for playback... on television sets and audio systems typically found in the home. ); Ex The abstract idea of delivering media files to a user via a communications network is a well-known concept that has been long prevalent in our system of commerce. Alice, 134 S. Ct. at 2356; Ex Indeed, the specification of the 854 patent admits that there were [e]xisting systems for transferring media files to the home user, Ex at 1:22-23, and prior art associated with -28-

32 streaming media from the Internet to computers, id. at 1: See also id. at 1:33, 1: As seen in representative claim 14, the claims recite nothing more than the abstract idea of delivering media files to a user via a communications network. Ex at cl. 14. While certain limitations, such as those directed to communicating media file requests to the transaction server and encrypting the file, address the nature of the requests and the format of the downloaded media file, they do not alter that the claims are directed to the abstract idea of delivering media files to a user via a communications network. As in Ultramercial, while certain limitations may add a degree of particularity, the concept embodied by the limitations describes only the abstract idea of delivering media files to a user via a communications network. See Ultramercial, 772 F.3d at 715. The only other independent claim, claim 1, contains comparable elements to those recited in claim 14, except that it is a system rather than a method claim, refers to media servers as provider sites, and lacks the user verification elements. Ex at cl. 1. As a result, claim 1 likewise is directed to the abstract idea of delivering media files to a user via a communications network. Accordingly, the 854 patent claims are directed to the patent-ineligible abstract idea of delivering media files to a user via a communications network. 2. The 854 Patent Claims Fail to Transform the Abstract Idea into a Patentable Invention The second prong of the Alice test requires determining whether the claim elements, alone or in combination, contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. Alice, 134 S. -29-

33 Ct. at The introduction of a computer into the claims does not alter the analysis of Mayo step two. Alice, 134 S. Ct. at As here, where the limitations simply recite generic computer implementation features, an abstract idea is not transformed into a patent-eligible invention. See id. at 2359 (finding patent invalid for claiming an abstract idea where each step does no more than require a generic computer to perform generic computer functions ); see also Salesforce.com, Inc. v. Virtual Agility, Inc., No. CBM , Final Written Decision (Paper No. 47) at p. 24 (PTAB Sept. 16, 2014) ( [S]imply adding a computer and an associated storage device to the abstract idea... does not impose meaningful limits on the claims. ); Ex The 854 patent claims merely require generic implementation using wellknown, routine, conventional computers and video production tools (e.g., servers, local storage, and the Internet), failing to transform the abstract idea of delivering media files to a user via a communications network into a patent-eligible invention. See id As in Alice, such computer functions [that] are well-understood, routine, conventional activit[ies] previously known to the industry are generic and cannot confer patentability. Alice, 134 S. Ct. at As in Ultramercial, the claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity. 772 F.3d at 715. In Ultramercial, adding routine additional steps such as... requiring a request from the consumer to view the ad... and use of the Internet d[id] not transform an otherwise abstract idea into patenteligible subject matter. Id. at 716. Here, independent claim 14 is representative and merely requires delivering -30-

34 media files to a user via a communications network using the routine steps of (1) generating a request for a media file, (2) communicating the request to a transaction server, (3) verifying the user and identifying the media server storing the requested media file, (4) instructing the media server to download the identified media file to the user, (5) uniquely encrypting the requested media file and download the file to the user site, and (6) enabling only the requesting user to decrypt the encrypted media file for playback at the user site. Ex at cl. 14. These steps are rudimentary, conventional activities relating to the abstract idea of delivering media files to a user via a communications network. Generating and sending requests to servers as recited in steps one and two is standard practice for media-delivery systems, and doing so over a network such as the Internet does not confer patent eligibility. See Ex Indeed, in 1999, the Internet was also well-known and conventional. Id. Including user identification information and media file identification information in such a request is routine, and any media delivery system that maintains a user list and stores media files separately from where the authentication is performed would verify said user identification information and identify the media server storing the requested file as recited in step three. Id. Using intermediary servers to control the delivery of media files to users is also commonplace, as is direct delivery from the media server to the user. Id.; see also infra Section VI.B (showing prior art use of intermediary servers and direct delivery of media files to users). As discussed in the prosecution history, the primary purported novel aspect is direct delivery of media files without a transaction server. See Section I.B supra. But purely conventional or obvious -31-

35 pre- or post-solution activity is not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law. See Mayo, 132 S. Ct. at 1298; see also Bilski, 130 S. Ct., at 3230 ( [T]he prohibition against patenting abstract ideas cannot be circumvented by... adding insignificant post-solution activity.... ). Here, systems using intermediary servers and direct delivery both conventional techniques would inevitably have the intermediary server instructing the media server to download the file to the user as in step four. Id. 30. Such direct delivery is mere insignificant post-solution activity that imposes no meaningful limit on delivery of a media file. See Mayo, 132 S. Ct. at Similarly, the claimed user site is described in the specification as a generic computer, containing only conventional components, such as local storage devices, a system processor, and RAM. The user site is connected to a conventional television set/video display, a conventional home audio stereo system, and a network such as the Internet using a conventional Cable or DSL compliant modem or a VSAT network connectivity device. Ex at 5:7-26; Ex Likewise, both the transaction server and the media sites are wellknown, conventional servers that contain conventional components, such as local storage, system processors, RAM, and connectivity devices. Ex at 5:27-30, 7:25-27; Ex Encrypting and downloading media files as recited in step five was also well known, and unique encryption that allows only the targeted user to decrypt the file was commonplace. Id. 31; see also infra Section VI.B (showing unique encryption in prior art). The specification even acknowledges that any existing encryption algorithms such as PGP and the Unix crypt -32-

36 command can be used. Ex at 8:29-32; Ex Finally, such systems would inevitably require the user to decrypt said encrypted file for playback as in step 6. Id. 32. Moreover, encryption and decryption are merely insignificant post-solution activity that imposes no meaningful limit on delivery of a media file. See Mayo, 132 S. Ct. at Thus, from start to finish, the steps of claim 14 describe the routine use of conventional technology to implement the abstract idea of delivering media files to a user via a communications network. Id. In fact, the specification emphasizes that the required computer components and steps are conventional and that no particular technological improvement is claimed. Ex at 1:22, 1:38-39, 1:65-66 (describing existing systems for transferring media files that include a video server and set top box and existing home entertainment systems ) ; Ex The conventional nature of the well-known components is also apparent from the prosecution history since the applicants primarily emphasized only the novelty of directly delivering media files to a user rather than delivering through an intermediate transaction server, and not the novelty of any of the claimed components themselves either individually or as a whole. See supra Section I.B. But the concept of directly downloading a file to the user was well-known and therefore does not confer patent eligibility under Section 101. See Ex , 29. Even when the claim limitations are considered as an ordered combination, the computer components... ad[d] nothing... that is not already present when the steps are considered separately. Alice, 134 S. Ct. at Viewed as a whole, the claim merely requires that the abstract idea be performed -33-

37 on a distributed computer system composed of generic computers, amount[ing] to nothing significantly more than an instruction to apply the abstract idea... using some unspecified generic computer. See id. at 2360 (quoting Mayo, 132 S. Ct. at 1298). As discussed above, distributed computer systems were well-known in the art and were purely conventional. Ex ; see also supra Section I.E. The use of a generic computer system to relay requests, verify information, encrypt files, and download media does not render the abstract idea of delivering media files to a user via a communications network eligible for patent protection. Alice, 134 S. Ct. at 2358 ( Stating an abstract idea while adding the words apply it with a computer is not enough for patent eligibility. ). Accordingly, claim 14 fails to practically limit the abstract idea being claimed. The result is the same for the other claims of the 854 patent. The only other independent claim, claim 1, contains comparable elements as claim 14. As recognized in Alice, where the system claims are no different from the method claims in substance, an analysis under Section 101 should reach the same conclusion for both styles of claim, so that patent eligibility does not depend simply on the draftsman s art. Alice, 134 S. Ct. at Claim 1 fails to practically limit the abstract idea being claimed for the same reasons as claim 14. Furthermore, none of the dependent claims contribute meaningful limitations to the abstract idea, nor do any of the dependent claims require a specialized computer to perform the abstract idea of delivering media files to a user via a communications network. Ex The dependent claims merely require that an encryption key be generated, sent, and used (claims 2-6, 8, and 15-19), that -34-

38 the media files be stored on a digital storage device (claim 7 and 19), that a program guide be displayed (claims 9-11 and 20-22), and that an electronic banking transaction to debit a user account and/or credit a [media server/provider] account be initiated (claims 13 and 23). Each of these limitations incorporates well-understood, routine, conventional concepts that do nothing to ameliorate the abstractness of the claimed concept. Alice, 134 S. Ct. at 2359; Ex ; see also supra Section I.E. Specifically, it is well-known that encryption and decryption methods use encryption keys that must be generated, sent, and used. See Ex Similarly, storage is nothing more than a generic component or function of a computer that is well-understood, routine, and conventional. See Alice, 134 S. Ct. at 2360 (holding that a data storage unit... is purely functional and generic ). Program guides were well-known, and banking transactions are a fundamental practice long prevalent in our system of commerce that add nothing more to transform the claimed abstract idea of delivering media files to a user into patent-eligible subject matter. Alice, 134 S. Ct. at 2356; Ex Therefore, each of these dependent limitations impose no further meaningful limitations on the claimed abstract idea such that the claim amounts to significantly more than the abstract idea itself. Alice, 134 S. Ct. at 2359; Ex Accordingly, the 854 patent claims fail to recite any inventive concept that that meaningfully limits the claimed abstract idea of delivering media files to a user via a communications network to transform it into a patentable invention. B. Claims 1-2, 6, 12, and 14 Are Invalid under 35 U.S.C. 103 over Hooper and Li -35-

39 Hooper (Ex. 1006), issued on September 23, 1997, and Li (Ex. 1007), published on March 25-26, 1996, both qualify as prior art under 35 U.S.C. 102(b). Neither Hooper nor Li was cited or considered during prosecution of the 854 patent. A POSITA would view claims 1-2, 6, 12, and 14 of the 854 patent as being obvious in view of the combination of Hooper and Li. See id. 82. Hooper generally provides the claimed structural aspects of a system for delivering digital media files via the Internet with a plurality of user sites each with a player/receiver, a plurality of provider sites, a connectivity device, and a transaction server. Hooper also provides for sending a media file request... to the transaction server from a player/receiver and for downloading the encrypted media file directly via the Internet from the provider site to the requesting player/receiver. While Hooper does not disclose the aspects of a media file encryptor for uniquely encrypting the media file or a media file decryptor, Li does and would reasonably have been combined with Hooper at the time. The charts in the argument below provide exemplary citations showing how Hooper and Li disclose claim elements and are intended to be illustrative, not exhaustive. Claim 1 Preamble: Assuming, without conceding, that the claim 1 preamble is limiting, the combination of Hooper and Li discloses all aspects of the preamble. Hooper discloses a distributed interactive multimedia service system that is used for executing user transaction requests (e.g., allocation request ) for delivering digital media files. Ex at Abstract; Ex The system operates via a network and uses a client application of a set-top box connected to a television to generate requests. Ex at 2:11-13, Fig. 1; Ex A -36-

40 person of ordinary skill in the art would view Hooper as teaching the Internet as the primary, most common type of network. Id. 86. Likewise, Li describes a system in which a video stream is delivered securely over the Internet from a server to a user/client upon request. Ex at 6; Ex As such, both Hooper and Li provide the aspects recited in the claim 1 preamble. Claim 1. A system for executing user transaction requests for delivering digital media files via the Internet for driving a user site television set and/or audio equipment, said system comprising: Hooper and Li Hooper and Li disclose a system for executing user transaction requests for delivering digital media files via the Internet for driving a user site television set and/or audio equipment : In a distributed interactive multimedia service system, a client application of a settop box located at a customer premises generates an attach request. A session manager [executing in a gateway router], in response to receiving the attach request via a network, generates an allocation request and a create request. A resource manager, in response to the allocation request, allocates resources of a plurality of multimedia servers. The resources can include processor, memory, disk, and network resources. A media stream manager, in response to the create request, creates a multimedia stream. The session manager, in response to the resources being allocated, and the multimedia stream being created, launches a selected one of a plurality of multimedia services in the plurality of multimedia servers. The selected service provides multimedia information to the set-top box via the multimedia stream. The system includes a memory storing the plurality of multimedia services in a hierarchical tree structure having nodes representing composite and elemental services. Hooper at Abstract. Id. at 2: More specifically in a distributed computer environment, subscribers of interactive multimedia services, launch, open, use, and close complex multimedia services via a communications network. the services are provided by processes executing on server processors having access to multimedia assests [sic]. Id. at 7: Id. at Fig. 1; see also id. at 2:63-3:1. Id. at Fig

41 We integrated our video encryption and decryption mechanism in Vosaic[13], a World Wide Web real time video and audio browser. Vosaic, short for Video Mosaic, incorporates real time video and audio into standard hypertext pages which are displayed in place. Video and audio transfers occur in real time; there is no file retrieval latency. A real time protocol, called VDP, is used in Vosaic. VDP is specialized for handling real time video over the WWW. VDP attempts to reduce inter-frame jitter and dynamically adapts to the client CPU load and network congestion. Li at 6. To transmit securely a video stream over the internet, the server must have the client s public key. A random session key is generated for each transmission. The random session key is encrypted with the client s public key and delivered to the client first. The client uses its corresponding private key to decrypt the random session key. The video stream is encrypted with the session key and the client decrypts the video with the session key. Id. at 6. Claim 1[a]: Hooper discloses a plurality of user sites, each including a player/receiver, a television set and/or audio equipment, and a connectivity device, as recited in claim 1[a]. Specifically, Hooper discloses a plurality of clients that are the user sites of 1a. Ex at 3:1-6; Ex The clients can be in the form of set-top boxes, which satisfies the limitation of a player/receiver. Ex at 3:1-6; Ex Each set-top box is further connected to a television as in claim 1a, and a POSITA would understand that each client is connected by a communications network, such as the Internet, in a distributed computer environment ( DCE ), satisfying the required connectivity device. Ex at 2:11-19, 3:1-6; Ex ; supra Section Error! Reference source not found.. Claim [1a] a plurality of user sites, each user site including a player/receiver, a television set and/or audio Hooper and Li Hooper discloses a plurality of user sites, each user site including a player/receiver, a television set and/or audio equipment, and a connectivity device for connecting said player/receiver to the Internet : Customer premises equipment (CPE) manufacturers supply TVs and set-top boxes. Hooper at 1: Id. at 2:

42 equipment, and a connectivity device for connecting said player/receiver to the Internet; The DCE 100 includes servers 200 connected to clients 10 by a communications network 110 having circuits 103. Each client 10 can be in the form of set-top boxes having processors for decoding and controlling service sessions using client applications (CA) 11. Id. at 3:1-6. Claim 1[b]: Hooper and Li disclose a plurality of provider sites, each including a media server comprising a media file storage device and media file encryptor, as recited in claim 1[b]. Specifically, Hooper s disclosure of interactive media servers among servers 200 satisfies the limitation of provider sites in claim 1[b]. Ex at 3:56-65; Ex The interactive media servers contain disk storage from which they can deliver streams of multimedia data, e.g., MPEG streams, files, and database information, satisfying the limitation of a media file storage device. Ex at 3:56-65; Ex As discussed in more detail below, the interactive media servers of Hooper can be combined with the video encryption mechanism of Li, which satisfies the media file encryptor of claim 1[b], that is part of the secure video encoder. Ex at 2, 6; Ex Claim [1b] a plurality of provider sites, each provider site including a media server comprising a media file storage device and a media file encryptor, and Hooper and Li Hooper and Li disclose a plurality of provider sites, each provider site including a media server comprising a media file storage device and a media file encryptor : Video information providers (VIPs) supply multimedia assets, service providers (SP) own and operate the service systems, and network operators provide transport. Hooper at 1: Id. at 3:1-6. The servers 200 include generalized and specialized processor-based sub-systems. For example, content library servers can be configured as a tape or optical juke boxes having robotic mechanisms to access a large number of off-line and on-line high-capacity tapes and optical disks which store multimedia content. Interactive media servers can concurrently deliver multiple streams of multimedia data, e.g., MPEG streams, files, and database information. Each server can include one or more processors, memory, and disk storage. Id. at 3: The services 300 include processes for providing multimedia content, e.g. assets, to the client 10. The processes execute on the -39-

43 servers 200 to manipulate the content as directed by the user of the client 10. Id. at 4: In this paper, we present a secure video encoder and player based on Berkeley s Mpeg Player[7, 8] and Zimmerman s PGP. Li at 2. The following functions were added to the original PGP distribution: generate session key(key): a 24 byte random session (IDEA) key is generated and returned. IDEA buffer(key, CRYPTO FLAG, inbuffer, outbuffer, bufferlen): This function does the IDEA encryption or d ecryption depending on the CRYPTO FLAG using key, the input message is Hooper at Fig. 3. stored in inbuffer and encrypted or decrypted message is put in outbuffer. Bufferlen specifies the input buffer length. encrypt buffer(public keys, inbuffer, outbuffer, bufferlen): Encrypt the message in inbuffer with length bufferlen using public key public_keys and output the result in outbuffer. decrypt buffer(inbuffer, outbuffer) Decrypt an encrypted message in inbuffer using one s private key and store the output in outbuffer. Id. at 3. There are two ways to encrypt a video stream. The first is to encrypt the video stream in advance and then read the encrypted video file from disk and transmit it over the network to the client. The second way is to encrypt video frames on-the-fly, with no encryption done beforehand. Id. at 5. Id. at 6. Claim 1[c]: Hooper discloses a connectivity device for connecting the provider site to a network, such as the Internet, since the servers 200 [are] connected to clients 10 by a communications network 110. Ex at 3:1-3; Ex ; supra Section Error! Reference source not found.. Claim [1c] a connectivity device for connecting said provider site media Hooper and Li Hooper discloses a connectivity device for connecting said provider site media server to the Internet : Outputs of the servers 200 are connected to a video pump including one or more media stream ports 240. The media stream port 240 can include multiplexers to select the servers and a flow controller to supply constant bit rate (CBR) streams to the bulk forward data path 104. The flow controller of the media stream port -40-

44 server to the Internet; 240 can encode video data into MPEG format, and package the encoded data into transport packets suitable for communicating over the network 110. Hooper at 3:66-4:7; see also id. at 1:41-44, 3:1-6. Claim 1[d]: Hooper discloses a transaction server, as recited in claim 1[d]. More specifically, Hooper discloses a session manager ( SEM ) at an interactive gateway unit ( IGU ) that routes service requests to servers 200, including interactive media servers. Ex at 3:33-42; Ex As shown in figure 2, the IGU is connected via paths 105 and 107 via gateway 201 to clients 10 and via path 290 to servers 200 via a network, which a person of ordinary skill would understand includes the Internet. Ex at 3:33-42, Fig. 2; Ex Claim [1d] a transactio n server and a connectiv ity device for connectin g said transactio n server to the Internet; Hooper and Li Hooper discloses a transaction server and a connectivity device for connecting said transaction server to the Internet : A L2 interactive gateway unit or router (IGU) 202, connected to the L1 gateway 201 by control lines 107, allows access to unregulated level 2 services. The level 2 services include provider supplied multimedia content, including all video-on-demand services. A session manger [sic] (SEM) 205 of the IGU router 202 can perform user authentication using a subscriber database, and upon validation route service requests to the servers 200. For a system supporting a large number of users, there may be several IGUs 202. A server management unit (SMU) 203 coordinates requests for server resources.... There may be several SMUs 203 to handle a distributed content database, the SMUs 203 can be paired for redundancy and fault tolerance. Hooper at 3: Id. at 1:41-44, 2:20-23, Fig. 2. Claim 1[e]: Hooper discloses that each set-top box, i.e. player/receiver, includes a user interface for sending media file requests via a network, such as the Internet, to the transaction server requesting delivery of an identified media file, as recited in claim 1[e]. More specifically, a client application running on the set-top box and performing requests to the SEM satisfies this limitation. Ex at 2:11-19, 5:24-33; Ex ; supra Section Error! Reference source not found

45 The user interface of the client application includes selection menus and a handheld remote controller device from which user commands can originate. Ex at 1:46-55, 2:11-19, 3:7-8, 6:38-46; Ex ; supra Section Error! Reference source not found.. Clients can generate requests for services, such as attach, info, open, close, suspend, resume, play, pause, forward. rewind, stop, read, write, etc, and client supplied identification data, including video stream services that would provide an identified media file as in claim 1[e]. Ex at 1:46-55, 4:13-16, 4:60-67, 6:47-49; Ex Claim [1e] each said player/receiv er including a user interface for sending a media file request via the Internet to said transaction server requesting delivery of an identified media file; Hooper and Li Hooper discloses each said player/receiver including a user interface for sending a media file request via the Internet to said transaction server requesting delivery of an identified media file : [T]he client applications tend to be relatively simplistic.... [A]n unsophisticated user, e.g., a child, can manipulate state-of-the-art high-speed 64-bit video servers, and many gigabytes of data. The services can be complex and varied, e.g., video-on-demand, games, catalogue services, home-shopping, tele-medicine, distance learning, restaurant food take-out, financial services, etc. The multimedia assets can be in various forms, including files, relational databases, and encoded video programs. Hooper at 1:46-55; see also id. at 2: And the elemental service, in response to commands received from the set-top box, provide functions to access and transport the multimedia content to the settop box via the media stream. Id. at 2: Users of the client 10 can initiate service requests with hand-held remote controllers, and the servers 200 reply. Id. at 3:7-8. The control data generated by the client 10 can include client requests for services, such as attach, info, open, close, suspend, resume, play, pause, forward. rewind, stop, read, write, etc, and client supplied identification data. Id. at 4:13-16; id. at 4: As shown in FIG. 4, the client application 11 initiates a service session by sending an attach request 410 to the SEM 205 of the IGU 202. The attach request 410 can include the identity (address) of the set-top box 11, an initial service pathway, a client profile, and an optional resume context, see reference numeral 411. The client address identifies a particular set-top box, and can also include user identification information, such as a unique password. -42-

46 Thus, multiple different users of the same set-top box can be selectively exposed to different services. Id. at 5:24-33; see also id. at 5: Thus, after the client 10 has been attached to the selected service or services, the client application 11, or the proxy 40 client 400 on behalf of the client 11, can submit an info request 510 to the SEM 205. The SEM 205 forwards the information 530 of the registered services to the client 11. The information 530 can be formatted, in part, as selection menus transferred to the client 10 via the media stream port 240. The user can use the information to select specific elemental services 330. Id. at 6: A particular service can be selected for execution by the client application 11 by sending an open request 610, as shown in FIG. 6. Id. at 6: Id. at Fig. 4, 6. Claim 1[f]: Hooper discloses that the transaction server responds to the media file request and sends authorization to the provider site storing the requested media file so that the media files is transmitted directly to the requesting player/receiver, as recited in claim 1[f]. Specifically, this limitation is satisfied by the session manager executing in a gateway router, in response to receiving the attach request via the network, generates an allocation request and a create request. Ex at 2:11-19; Ex In response to the allocation request, the resource manager of a server management unit allocates resources of a multimedia server, which causes the session manager to launch the selected service in the multimedia server. Ex at 2:29-32; Ex In response to the create request, the MSM allocates the media stream port of the interactive media server, which connects directly to the requesting client so that the services can be -43-

47 connected to deliver constant bit rate video stream directly to the client from the interactive media server. Ex at 5:49-55; Ex ; supra Section Error! Reference source not found.. Claim [1f] said transaction server being responsive to a received media file request for sending an authorizati on to the provider site storing the requested media file authorizing delivery of the requested media file from said provider site to the requesting player/recei ver directly via the Internet; Hooper and Li Hooper discloses said transaction server being responsive to a received media file request for sending an authorization to the provider site storing the requested media file authorizing delivery of the requested media file from said provider site to the requesting player/receiver directly via the Internet : The session manager, in response to the resources being allocated and the multimedia stream being created, launches a selected one of a plurality of multimedia services in the plurality of multimedia servers. Hooper at 2:29-32, 3:33-55, 2: In response to receiving the attach request 410, the SEM 205 validates the client/user identity against a subscriber database 420 using an authenticate request 430. The authentication reply can include additional information to refine the initial services to be launched for the client 10. Upon a valid authentication, the SEM 205 sends an allocate request 440 to the RM 210. The RM 210 allocates the appropriate resources for the initial services. The SEM 205 also sends a create request 450 to a media stream manager MSM 207. The MSM creates or allocates the media stream port 240. The media stream port 240 is the channel/port that will connect the client 10 to the selected services. The SEM 205 receives the address or handle of the media stream port 240 so that the services can be connected to deliver constant bit rate video stream directly to the client. As a final step, the SEM 205 generates a launch request 460 to launch the selected services in one or more servers 200. Launching means the execution of the processes of the services, and access to the associated content assets are enabled. If the service being launched is a composite service, any required sub-services are also launched. The services can send video streams directly to the client 10 via the media stream port 240. The reply to a successful attach request 460 can include the addresses or handles of the launched services. The client application 11 uses these handles to directly communicate with the selected services during subsequent requests. Id. at 5: As shown in FIG. 7, after the selected services have been opened, the service can respond directly to functional commands 340, such as play, pause, and read , which control the delivery of the multimedia content. This means that the client 11, or the proxy client 400 is communicating directly with the services, by-passing the SEM 205. Id. at 6:

48 The proxy client 400 can format and package repl y information for consumption by the client 11 using the media stream port 240 to transport the asset information directly to the client 11. The content can be presented to the media stream port 240 in MPEG encoded form, or otherwise. If the content is not in MPEG encoded form, the encoding can be done by the port 240, while delivering the content. Id. at 7:10-17; id. at Fig. 7. Claim 1[g]: As discussed above, Hooper and Li disclose that the authorized provider site, i.e. the interactive media server, is responsive to the transaction server authorization, as recited in claim 1[g]. Ex at 2:11-19, 2:29-32; Ex Further, as disclosed in the combination of Hooper and Li, the interactive media server can uniquely encrypt the identified media file. Specifically, Li discloses that the system can encrypt video frames on-the-fly using the client s public key. Ex at 5-6; Ex A random session key is generated for each transmission, and the video stream is encrypted with the session key, such that the video is uniquely encrypt[ed] as in claim 1g. Ex at 6; Ex ; supra Section Error! Reference source not found.. Additionally, the encrypted file is then downloaded directly from the interactive media server to the requesting client, i.e. player/receiver. Ex at 2:25-28 ( A media stream manager, in response to the create request, creates a multimedia stream. The multimedia stream is a virtual circuit to connect directly to the set-top box. ), 5:61-63 ( The services can send video streams directly to the client 10 via the media stream port 240. ); Ex ; supra Section Error! Reference source not found

49 Claim [1g] said authorized provider site being responsive to said transaction server authorization for uniquely encrypting the identified media file and for downloading the encrypted media file directly via the Internet to said requesting player/receiver; Hooper and Li Hooper and Li disclose said authorized provider site being responsive to said transaction server authorization for uniquely encrypting the identified media file and for downloading the encrypted media file directly via the Internet to said requesting player/receiver : A media stream manager, in response to the create request, creates a multimedia stream. The multimedia stream is a virtual circuit to connect directly to the set-top box. Hooper at 2: The selected service, while executing in the servers, provides multimedia information to the set-top box via the multimedia stream. Id. at 2: The control data generated by the servers 200 can include status information, e.g., success/failure, and further control data for the application, to be stored in the client 10. The control data can include addresses or handles which allow the client 10 to directly communicate with the services of the servers 200 once a session has been established. Bulk multimedia data transfers from the servers 200 to the client 10, e.g., video streams and files, by-pass the L1 and L2 gateways, and are directly communicated on the high bandwidth forward data channel104. These multimedia data are the service multimedia content. Id. at 4: Id. at 5:56-67; id. at 7: Li at 3, 5, 6. Claim 1[h]: The combination of Hooper and Li disclosure of the IDEA_buffer() function satisfies claim 1[h] s limitation that the client set-top box, i.e. player/receiver, has a media file decryptor. Ex at 3; Ex While Hooper discloses the multiple players/receivers, Li discloses a player/receiver with a media file decryptor. Ex at 3:1-6; Ex at 3. Claim [1h] each said player/receiver including a media file decryptor; and Hooper and Li Hooper and Li disclose each said player/receiver including a media file decryptor : We implement a software-only security enhanced MPEG player. The security enhanced player implements a protection hierarchy by specializing the encryption scheme based on MPEG s coding sequences. Li at Abstract. Id. at 3, 6. Hooper at 3:1-6. Claim 1[i]: Since the media file is uniquely encrypted using the randomly generated session key as described above, Hooper and Li also disclose that only the requesting set-top box, i.e. player/receiver, is capable of decrypting the -46-

50 encrypted media file using the IDEA_buffer() function for playback on the television connected to the set-top box, satisfying the limitations of claim 1[i]. Ex at 3; Ex Claim [1i] wherein only said requesting player/receiver decryptor is capable of decrypting said encrypted media file downloaded thereto for playback on the television set and/or audio equipment at the same user site. Hooper and Li Hooper and Li disclose wherein only said requesting player/receiver decryptor is capable of decrypting said encrypted media file downloaded thereto for playback on the television set and/or audio equipment at the same user site : Li at 3; id. at 6. Claim 2: Combined, Hooper and Li disclose the interactive media server, i.e. provider site, encrypting the requested media file using a unique encryption key and the requesting set-top box, i.e. player/receiver, using a matching encryption key as recited in claim 2. Such a matching key could be a different key such as used in an asymmetric (i.e., public key) cipher or the same key as used in a symmetric (i.e., secret key) cipher, but it would be trivial to derive a matching key in an asymmetric cipher given the encryption key. Ex Regardless, Li discloses a system that uses a combination of secret key and public key encryption. Ex at 1; Ex In this system, a unique random session key, i.e. a unique encryption key, is generated using the generate_session_key() function. Ex at 3; Ex ; supra Section Error! Reference source not found.. In the combination of Hooper and Li, the requested media file is encrypted using the session key using the IDEA_buffer() function with the CRYPTO_FLAG set for encryption at the interactive media server, and the media file is then decrypted using the matching session key using the IDEA_buffer() function with the CRYPTO_FLAG set for decryption at the set-top box. Ex

51 at 3, 6; Ex Claim 2. The system of claim 1 wherein said provider site encrypts said media file using a unique encryption key and wherein said requesting player/receiver decrypts said media file using a matching encryption key. Hooper and Li Hooper and Li disclose wherein said provider site encrypts said media file using a unique encryption key and wherein said requesting player/receiver decrypts said media file using a matching encryption key : See supra claim 1. Encryption and decryption provide the basic technology for building secure systems. There are two basic encryption methods: Secret Key Encryption: A single key is used for both encryption and decryption. Only authorized users possess the key. Public Key Encryption: Both a public key and a private key are used. In the widely known RSA method, the keys are complementary: each key may unlock ciphertext created with the other key. The public key is published and widely disseminated, while the private key is kept secret. Public key encryption alleviates the problem of key distribution. However, decryption in currently known public key schemes is slower than in secret key schemes. Assuming the plain text is much larger than an encryption key, a compromise method is to encrypt the plain text to be delivered with a secret key, and to encrypt the secret key using the receiver s public key. The receiver can then quickly decrypt the ciphertext after it decrypts the secret key with its private key. Li at 1. Each time a message is encrypted, a session key is randomly generated and used to encrypt the message. The session key is encrypted using the recipient s public key. Id. at 3, 6. Claim 6: Hooper and Li disclose that the set-top box, i.e. player/receiver, can play back the requested media file on the connected television in real time, i.e. concurrently, while decrypting the file, as recited in claim 6. Ex at Abstract ( Our work shows that video streams can also be encrypted and decrypted while satisfying the real time requirements in the present day Internet. ) (emphasis added); Ex ; supra Section Error! Reference source not found.. As further disclosed in Li, the display rates reached by [Li s] security enhanced MPEG player is comparable with the original MPEG player. Ex at 2. In other words, Li s MPEG player can decrypt at the same pace as an MPEG player -48-

52 without decryption, i.e. in real-time. Ex ; supra Section Error! Reference source not found.. As described above, the file is decrypted with a session key using the IDEA_buffer() function with the CRYPTO_FLAG set for decryption at the set-top box. Ex at 3, 6; Ex Claim 6. The system of claim 1 wherein said requesting player/receiver plays back said media file on said television set and/or audio equipment concurrently with said decryptor decrypting said media file. Hooper and Li Hooper and Li disclose wherein said requesting player/receiver plays back said media file on said television set and/or audio equipment concurrently with said decryptor decrypting said media file : See supra claim 1. Our work shows that video streams can also be encrypted and decrypted while satisfying the real time requirements in the present day Internet. Li at Abstract. Experiments show that the display rates reached by our security enhanced MPEG player is comparable with the original MPEG player. Id. at 2. Real time playback of networked videos require that videos be sent on-demand, and in real-time. In such a situation, the video file cannot be encrypted as a whole. Instead, it is incrementally encrypted. Id. at 3, 6. Claim 12: Hooper and Li disclose the client request including user identification, as recited in claim 12. Specifically, this limitation is satisfied by disclosure that the attach request sent from the set-top box can include the identity (address) of the set-top box 11, which identifies a particular set-top box, and can also include user identification information, such as a unique password. Ex at 5:24-33; Ex Further, the transaction server, i.e. the session manager, responds to receipt of the user identification information for verifying account status for the identified user because in response to receiving the attach request 410, the SEM 205 validates the client/user identity against a subscriber database 420 using an authenticate request 430. Only upon a valid authentication does the session manager send an allocate request to the resource manager for the initial -49-

53 services. Ex at 5:41-48; Ex Claim Hooper and Li 12. The system of claim 1 Hooper and Li disclose wherein each media file wherein each media file request includes user identification data; and wherein request includes user said transaction server responds to receipt of said user identification data; and identification data for verifying account status for the wherein said transaction identified user : During operation of the DCE 100, server responds to receipt depending on the identity of the set-top box 10 and of said user identification the client user, one or more provider services are data for verifying account exposed to the client for selection. See supra claim status for the identified 1. Hooper at 4:38-41, 5:24-33, 5:33-40, 5: user. Claim 14: Claim 14 is directed to a method and includes limitations analogous to the limitations of claims 1 and 12. Ex For example, while claim 1 recites limitations of a system including user sites, a transaction server, and provider sites, claim 14 similarly recites steps of the method performed by the system described in claim 1 using the same user sites, transaction server, and provider sites (which are equivalent to the media servers of claim 14). Ex Additionally, just as claim 14a recites the request including user identification information and claim 14c recites the transaction server verifying said user identification information, claim 12 also recites a request including user identification information and transaction server responding to the user identification information to verify account status. Id Accordingly, much of the element-by-element explanation provided above in regard to claims 1 and 12 is relevant to claim 14. Thus, as explained above, including explanation of claims 1 and 12, Hooper and Li disclose claim 14. Id Claim 14. A method for executing user transaction requests for delivering digital media files via the Internet Hooper and Li Hooper and Li disclose a method for executing user transaction requests for delivering digital media files via the Internet -50-

54 for driving a user site television set and/or audio equipment comprising the steps of: [14a] enabling each of a plurality of users to generate a transaction request including user identification information and media file identification information; [14b] communicating each transaction request via the Internet to a transaction server; [14c] causing said transaction server to verify said user identification information and identify which of a plurality of media servers stores the identified media file; [14d] enabling said transaction server to instruct the identified media server via the Internet to download the identified media file to the requesting user directly via the Internet; [14e] causing said identified media server to uniquely encrypt the identified media file and download it directly via the Internet to the requesting user; and [14f] enabling only the requesting user to decrypt said encrypted media file for playback on a television set and/or audio equipment at the requesting user s site. for driving a user site television set and/or audio equipment : See supra claim 1. Hooper and Li disclose enabling each of a plurality of users to generate a transaction request including user identification information and media file identification information : See supra claims 1e and 12. Hooper and Li disclose communicating each transaction request via the Internet to a transaction server : See supra claim 1e. Hooper and Li disclose causing said transaction server to verify said user identification information and identify which of a plurality of media servers stores the identified media file : See supra claims 1f and 12. Hooper and Li disclose enabling said transaction server to instruct the identified media server via the Internet to download the identified media file to the requesting user directly via the Internet : See supra claim 1f. Hooper and Li disclose causing said identified media server to uniquely encrypt the identified media file and download it directly via the Internet to the requesting user : See supra claim 1g. Hooper and Li disclose enabling only the requesting user to decrypt said encrypted media file for playback on a television set and/or audio equipment at the requesting user s site : See supra claim 1i. Rationale to Combine: As explained by Dr. Long, a POSITA making use of the video transmission methods and systems of the type described in Hooper would know to incorporate various aspects of video transmission that were commonly employed at the time. See Ex Among those aspects of video transmission known at the time, encryption and decryption techniques were known and commonly employed in various video transmissions systems predating -51-

55 the filing date by decades. Id. For example, Needham, published in December 1978, discusses that numerous different encryption protocols for encrypting and decrypting media files were known in the context of media transmission systems. Ex at ; Ex Such commonly employed encryption features include various features described by Li. See id. Thus, the combination of Hooper with Li represents making use of known technologies as in Li so as to improve Hooper in a similar manner. The encryption/decryption techniques as described in Li could reasonably and predictably be incorporated in the methods of Hooper in a known manner with an expected outcome. See id. 84. Specifically, both Hooper and Li describe video transmission systems that operate on a network. See generally Ex ; Ex. 1007; see also Ex In fact, both Hooper and Li disclose distributed computer environments for which security would be important. Ex at 1:11-6; Ex at 1; Ex As in Li, the system disclosed in Hooper also utilizes MPEG encoding. Ex at 4:3-7; Ex at 1; Ex Moreover, Li applies its disclosure concerning encryption and decryption of video transmitted over a network to an existing platform comparable to the one disclosed in Hooper and finds that there was no perceivable difference in observed video quality between the encrypted and unencrypted versions, nor was there a measurable difference in displayed frame rates. Ex at 6; Ex Thus, a POSITA would have recognized that the methods and systems of Hooper and Li were similarly directed to video transmission and would have viewed combining the known aspects of video transmission as an application of known -52-

56 systems to achieve a predictable result, i.e. a distributed interactive multimedia service system that uses encryption and decryption. See id. A POSITA would also have been motivated to include encryption / decryption techniques, such as those described in Li, in the distributed media transmission system of Hooper, so as to provide sensible and readily available security measures in transmitting content over the Internet. At the time, with the increasing pervasiveness of such networked multimedia systems and Internet commerce, it was becoming increasingly imperative to secure the transmission or media from potential interception or monitoring. See id. 85. Li itself recognizes the same, explicitly teaching that distributed systems security has been the object of considerable research, that secure information exchange is a necessity in distributed systems, especially with the budding of Internet commerce, and that it is thus important to secure networked continuous media from potential eavesdroppers. Ex at 1; Ex Accordingly, it would be obvious to a POSITA to combine the architecture disclosed in Hooper with that in Li. Ex at 1; Ex Indeed, incorporating the encryption aspects of Li into a system of Hooper would have been viewed by a POSITA as a common sense application of known network technologies. C. Claims 3-5 and Are Invalid under 35 U.S.C. 103 over Hooper, Li, and Kohl Kohl, published in September 1998, qualifies as prior art for this proceeding under 35 U.S.C. 102(a) given the priority date to which the 854 patent is entitled. See supra Section I.C. Kohl was neither cited nor considered during -53-

57 prosecution of the 854 patent. A POSITA would view claims 3-5 and of the 854 patent as being obvious in view of the combination of Hooper, Li, and Kohl. See id As discussed above in Section VI.B, the combination of Hooper and Li disclose the aspects of the claimed media file delivery system and the aspects of media file encryption and decryption. While Li discloses the aspect of encryption and decryption of video media files for real-time playback, it does not provide that the encryption key is included with the request for the media file, as recited in claims 3-5 and Kohl, however, does, and would have been reasonably combined with Hooper and Li at the time. The charts in the argument below provide exemplary citations showing how Hooper, Li, and Kohl disclose claim element, and are intended to be illustrative, not exhaustive. Claim 3: Hooper, Li, and Kohl disclose all aspects of claim 3. As discussed above in connection with claims 1 and 2, Li specifically discloses the use of both secret key and public key encryption in which a random session key, i.e. an encryption key, as recited in claim3, is generated. Ex at 1, 3; Ex The encryption key is itself encrypted with the encrypt_buffer() function using the client s public key, and is shared with both the client and the provider site (i.e., the interactive media server), such that both the provider site and the player/receiver (i.e. the client set-top box) use the same key to encrypt and decrypt the requested media file. Ex at 3, 6; Ex As further disclosed in Kohl, the buy request message contains the encrypted [part encryption key ( PEK ) and public key certificate, which satisfies the limitation of claim 3that the media file request itself include an encryption key. Ex at 33; Ex After -54-

58 receiving the request, the combination of Hooper, Li, and Kohl discloses that the SEM routes service requests, which would include the encryption key, satisfying the limitation of claim 3 that the authorization sent by the transaction server include the encryption key. Ex at 3:33-42; Ex at 33; Ex Claim 3. The system of claim 1 wherein each media file request sent by said player/receiver includes an encryption key; and wherein said authorization sent by said transaction server includes said encryption key; and wherein said authorized provider site encrypts said media file using said encryption key. Hooper, Li, and Kohl Hooper, Li, and Kohl disclose wherein each media file request sent by said player/receiver includes an encryption key; and wherein said authorization sent by said transaction server includes said encryption key; and wherein said authorized provider site encrypts said media file using said encryption key : See supra claim 1. Hooper at 1:41-44, 2:20-23, 3:33-42, 3:43-55, Fig. 2. Li at 1 3, 6. IBM has coined the name Cryptolope (cryptographic envelope) for its document encapsulation technology [see 4]... As shown in figure 2, a cryptolope consists of multiple parts. In addition to the encrypted document, a cryptolope contains a clear text description of the encrypted content which serves to support a user s purchase decision. The metadata gives information about the contents as a whole, such as author, size or format and instructions on how the content may be purchased. The real information is stored in the encrypted content parts. For each part, a different part encryption key (PEK) is chosen. The PEKs are themselves encrypted using a master key and stored in the key Kohl at Fig. 2. Id. at Fig. 3. records of the cryptolope. Kohl at 33. The purchasing transaction requires a clearing center which acts on behalf of the content provider. A client who decides to buy some content is directed by the cryptolope instructions to an appropriate clearing center. The buy request message contains the encrypted PEK and public key certificate. The clearing house knows the master key (which could be its own private key or a -55-