Smartflash LLC v. Apple Inc., 680 F. App'x 977

Smartflash asserted claims from three related patents (’720, ’221, ’772) directed to terminals/handheld devices that retrieve digital/multimedia content, validate payment, and write access/use rules to permit content access.
Claims recited processors, interfaces, program stores, and code to read payment data, forward it for validation, receive validation, retrieve content, and write content and access rules to a data carrier or memory.
Apple moved for JMOL and earlier summary judgment seeking § 101 invalidity; the district court applied Alice, found the claims directed to conditioning access on payment (an abstract idea) but held the claims recited meaningful limitations (distinct memories, data types, use rules) that rendered them eligible.
On appeal, the Federal Circuit reviewed § 101 de novo and considered whether the asserted claims were directed to an abstract idea and, if so, whether they recited an inventive concept sufficient to transform the claims into patent-eligible applications.
The Federal Circuit concluded the claims were directed to the abstract idea of conditioning/controlling access to content based on payment and that the claimed hardware and routine data operations (storing, transmitting, retrieving, writing) were conventional and did not add an inventive concept.

Issue	Smartflash's Argument	Apple’s Argument	Held
Whether the asserted claims are directed to an abstract idea under § 101	Claims improve content access systems by specific techniques (storing payment on carrier; writing access rules tied to payment) and specific hardware components	Claims merely recite the abstract idea of conditioning access to data based on payment; computers are used as tools	Held: Directed to the abstract idea of conditioning/controlling access to data based on payment
Whether the claims recite an "inventive concept" that transforms the abstract idea into patent-eligible subject matter	Claim elements and ordered combination (interfaces, program store, processor, distinct memory types, code steps) provide technical improvements and distinct advantages	Claimed activities (storing/transmitting/retrieving/writing data; generic computer components) are well-understood, routine, conventional and do not supply an inventive concept	Held: No inventive concept — generic hardware and routine data operations insufficient; claims invalid under § 101
Whether district court’s denial of JMOL should be sustained	District court found meaningful limitations that rendered claims eligible	JMOL should be granted because claims are ineligible as a matter of law	Held: Reversed district court; JMOL should have been granted because asserted claims are § 101 ineligible

Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) (two-step framework for abstract ideas and requirement of an inventive concept)
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) (establishes standard that routine, conventional activity cannot provide inventive concept)
Bilski v. Kappos, 561 U.S. 593 (2010) (fundamental economic practices are abstract ideas)
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (distinguishes claims directed to specific improvements in computer functionality)
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) (claims that solve an Internet-specific problem in a non-conventional way may be eligible)
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (claims reciting an abstract advertising-for-content scheme were ineligible)
Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343 (Fed. Cir. 2014) (data collection/recognition/storage is well-known and insufficient for eligibility)
Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013) (applying information to rules and allowing routine user actions held ineligible)
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) (verifying credit-card transactions over the Internet is an abstract idea when implemented with routine computer functions)