Trials@uspto.gov
`571-272-7822
`
`
`
`
`
` Paper 10
`Entered: March 7, 2014
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`
`
`MASTERCARD INTERNATIONAL INCORPORATED
`Petitioner
`
`v.
`
`JOHN D’AGOSTINO
`Patent Owner
`____________
`
`Case CBM2013-00058
`Patent 7,840,486
`____________
`
`
`
`
`
`Before SALLY C. MEDLEY, KARL D. EASTHOM, and
`KALYAN K. DESHPANDE, Administrative Patent Judges.
`
`
`DESHPANDE, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
` Paper 10
`Entered: March 7, 2014
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`
`
`MASTERCARD INTERNATIONAL INCORPORATED
`Petitioner
`
`v.
`
`JOHN D’AGOSTINO
`Patent Owner
`____________
`
`Case CBM2013-00058
`Patent 7,840,486
`____________
`
`
`
`
`
`Before SALLY C. MEDLEY, KARL D. EASTHOM, and
`KALYAN K. DESHPANDE, Administrative Patent Judges.
`
`
`DESHPANDE, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`I.
`
`INTRODUCTION
`
`MasterCard International Incorporated (“Petitioner”) filed a petition
`
`(“Pet.”) requesting a review under the transitional program for covered
`
`business method patents of U.S. Patent No. 7,840,486 B2 (Ex. 1001, “the
`
`’486 patent”). Paper 5. John D’Agostino (“Patent Owner”) filed a
`
`preliminary response (“Prelim. Resp.”). Paper 9. The Board has jurisdiction
`
`under 35 U.S.C. § 324.1
`
`The standard for instituting a covered business method patent review
`
`is set forth in 35 U.S.C. § 324(a), which provides as follows:
`
`THRESHOLD—The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is
`more likely than not that at least 1 of the claims challenged in
`the petition is unpatentable.
`
`Petitioner challenges the patentability of claims 1-30 of the ’486
`
`patent under 35 U.S.C. §§ 102 and 103. Taking into account Patent Owner’s
`
`preliminary response, we determine that the information presented in the
`
`petition does not demonstrate that it is more likely than not that the
`
`challenged claims are unpatentable. Pursuant to 35 U.S.C. § 324(a), we
`
`deny the institution of a covered business method patent review as to claims
`
`1-30 of the ’486 patent.
`
`
`
`1 See Section 18(a) of the Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284, 329 (2011) (“AIA”).
`
`2
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`A.
`
`The ’486 Patent
`
`The ’486 patent discloses a method and system of performing secure
`
`credit card purchases. Ex. 1001, Abstract. The method and system increase
`
`overall security by minimizing access to credit card numbers, without having
`
`to substantially deviate from existing credit card transaction practices. Id. at
`
`col. 1, ll. 13-23.
`
`Figure 3 of the ’486 patent follows:
`
`
`
`Figure 3 schematically represents a secure credit card transaction
`
`system, where the customer-to-merchant contact is by phone or in person.
`
`As shown above in Figure 3, customer 54 receives promotional information
`
`from merchant 56, either by telephone 60 or in person 62. Id. at col. 7, ll.
`
`25-30. Customer 54 then contacts custodial authorizing entity 64, by either
`
`telephone 66' or computer 45', for authorization. Id. at col. 7, ll. 30-38.
`
`3
`
`
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`Case CBM2013-00058
`Patent 7,840,486
`
`After confirming authorization, authorizing entity 64 establishes details of
`
`the anticipated transaction to determine a payment category, and then issues
`
`a transaction code to the customer. Id. at col. 7, ll. 38-41. The customer can
`
`utilize the transaction code to consummate a transaction within the defined
`
`parameters of the payment category, and the merchant can obtain
`
`verification and subsequent payment utilizing the transaction code only. Id.
`
`at col. 7, ll. 41-50.
`
`B.
`
`Related Matters
`
`Petitioner and Patent Owner identify the following related district
`
`court proceeding involving the ’486 Patent and in which Petitioner is a
`
`party: John D’Agostino v. MasterCard, Inc. et al., Case No. 1:13-cv-00738
`
`(D. Del, filed April 26, 2013). Pet. 5; Prelim. Resp. 3; Ex. 1007
`
`(“Complaint for Patent Infringement”).
`
`In a related PTAB proceeding, CBM2013-00057, Petitioner seeks
`
`review of U.S. Patent No. 8,036,988 B2, which claims priority to the ’486
`
`patent. Pet. 5. Petitioner and Patent Owner also identify the ’988 patent as
`
`the subject of Ex Parte Reexamination proceeding No. 90/012,517. Pet 5-6;
`
`Prelim. Resp. 14-22; Ex. 1003 (“Ex Parte Reexamination Office Action”).
`
`C.
`
`Illustrative Claim
`
`Petitioner challenges claims 1-30 of the ’486 patent. Claims 1, 24, 25,
`
`and 29 are independent claims. Claim 1 is illustrative of the claims at issue
`
`and follows:
`
`1. A method of performing secure credit card purchases, said
`method comprising:
`
`4
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`a) contacting a custodial authorizing entity having custodial
`responsibility of account parameters of a customer’s account that is
`used to make credit card purchases;
`b) supplying said custodial authorizing entity with at least
`account identification data of said customer’s account;
`c) defining a payment category including at least limiting
`purchases to a single merchant for at least one transaction, said single
`merchant limitation being included in said payment category prior to
`any particular merchant being identified as said single merchant;
`d) designating said payment category thereby designating
`at least that a transaction code generated in accordance with
`said payment category can be used by only one merchant;
`e) generating a transaction code by a processing
`computer of said custodial authorizing entity, said transaction
`code reflecting at least the limits of said designated payment
`category to make a purchase within said designated payment
`category;
`f) communicating said transaction code to a merchant to
`consummate a purchase with defined purchase parameters;
`g) verifying that said defined purchase parameters are
`within said designated payment category; and
`h) providing authorization for said purchase so as to
`confirm at least that said defined purchase parameters are
`within said designated payment category and to authorize
`payment required to complete the purchase.
`
`5
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`D.
`
`The Alleged Grounds of Unpatentability
`
`The information presented in the Petition sets forth Petitioner’s
`
`contentions of unpatentability of claims 1-30 of the ’486 patent under
`
`35 U.S.C. §§ 102 and 103, as follows (see Pet. 6-7, 15-79):
`
`Reference(s)
`
`Basis
`
`Challenged Claims
`
`Cohen2
`
`Cohen and
`Musmanno3
`Flitcroft4
`
`Flitcroft and
`Musmanno
`
`§ 102(e)
`
`1-15 and 22-30
`
`§ 103
`
`16-21
`
`§ 102(e)
`
`1-15 and 22-30
`
`§ 103
`
`16-21
`
`II.
`
`ANALYSIS
`
`A. Covered Business Method Patent
`
`As indicated above, claim 1 recites “a method of performing secure
`
`credit card purchases.” We determine that the ’486 Patent is a ‘covered
`
`business method patent’ under § 18(d)(1) of the “AIA.” See note 1; Pet. 3-5
`
`(quoting and discussing § 18(d)(1)). As Petitioner contends, we determine
`
`that “the subject matter as a whole solves no ‘technical problem,’ and
`
`instead is directed to a method of carrying out a financial transaction.” See
`
`Pet. 4. Patent Owner does not challenge Petitioner’s contention.
`
`
`
`2 U.S. Patent No. 6,422,462 B1 (Ex. 1004) (“Cohen”).
`3 U.S. Patent No. 5,826,243 (Ex. 1006) (“Musmanno”).
`4 U.S. Patent No. 6,636,833 B1(Ex. 1005) (“Flitcroft”).
`
`6
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`Specifically, claim 1 is directed to securely transacting credit card
`
`purchases. The method includes a custodial authorizing entity that provides
`
`a transaction code in order to facilitate a transaction between a customer and
`
`a merchant. We determine that a claim for “transacting credit card
`
`purchases” that includes a custodial authorizing entity to facilitate a
`
`transaction between a customer and merchant is expressly financial in
`
`nature. Accordingly, we determine that the ’486 patent is a ‘covered
`
`business method patent’ under § 18(d)(1) of the AIA.
`
`B. Unpatentability under 35 U.S.C. §§ 102 and 103
`
`Petitioner contends that claims 1-15 and 22-30 of the ’486 patent are
`
`unpatentable under 35 U.S.C. § 102(e) as anticipated by Cohen or Flitcroft,
`
`and claims 16-21 are unpatentable under 35 U.S.C. § 103 as obvious over
`
`Cohen or Flitcroft, and Musmanno. Pet. 14-79.
`
`1.
`
`Section 18(a)(1)(C)
`
`Under section 18(a)(1)(C) of the AIA, a petitioner in a transitional
`
`proceeding who challenges the validity of one or more claims in a covered
`
`business method patent on grounds of unpatentability raised under §§ 102
`
`and 103 may only support such grounds on the following basis:
`
`(i) prior art that is described by section 102(a) of such
`title (as in effect on the day before such effective date); or
`(ii) prior art that—
`(I) discloses the invention more than 1 year before the
`date of the application for patent in the United States; and
`
`7
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`(II) would be described by section 102(a) of such title (as
`in effect on the day before the effective date set forth in section
`3(n)(1)) if the disclosure has been made by another before the
`invention thereof by the applicant for patent.
`
`AIA Section 18(a)(1)(C).
`
`2.
`
`Priority
`
`The ’486 patent was filed on October 17, 2005 and issued on
`
`November 23, 2010. Ex. 1001. The ’486 patent is a continuation of
`
`application 10/037,007, filed on November 9, 2001, which is a continuation-
`
`in-part of application 09/231,745, filed on January 15, 1999, which is now
`
`U.S. Patent No. 6,324,526. Id.
`
`Cohen was filed on March 30, 1999 and issued on July 23, 2002. Ex.
`
`1004. Cohen claims priority to Provisional Application No. 60/079,884,
`
`filed on March 30, 1998. Id.
`
`Flitcroft was filed on January 22, 1999 and issued on October 21,
`
`2003. Ex. 1005. Flitcroft claims priority to Provisional Application No.
`
`60/099,014, filed on September 9, 1998; Provisional Application No.
`
`60/098,175, filed on August 26, 1998; and Provisional Application No.
`
`60/092,500, filed on July 13, 1998. Id.
`
`3.
`
`Analysis
`
`Petitioner submits that Cohen and Flitcroft qualify as § 102(e) prior
`
`art references, assuming that the ’486 patent receives the benefit of the
`
`earliest filing date, January 15, 1999. Pet. 15, 46. Although Cohen and
`
`Flitcroft were filed prior to the effective filing date of the ’486 patent,
`
`8
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`neither Cohen nor Flitcroft was published prior to the effective filing date of
`
`the ’486 patent. As such, we agree with Petitioner that both Cohen and
`
`Flitcroft only qualify as § 102(e) references. Accordingly, neither Cohen
`
`nor Flitcroft qualifies as prior art, for a covered business methods review,
`
`under Section 18(a)(1)(C) of the AIA.
`
`Petitioner does not direct us to any further evidence to demonstrate
`
`that Cohen and Flitcroft qualify as prior art under Section 18(a)(1)(C) of the
`
`AIA. Instead, Petitioner argues that the Board previously has instituted a
`
`covered business method patent review on the basis of a reference that
`
`qualifies under § 102 (e). Pet. 15, n. 6 (citing CBM2013-00008, paper 20,
`
`20-21, 35). Nonetheless, Section 18 (a)(1)(C) of the AIA governs what
`
`qualifies as prior art in this proceeding, and in that earlier Board proceeding
`
`the Board issued a clarifying order, effectively amending the decision to
`
`institute and withdrawing the previously instituted ground based on the
`
`§ 102(e) reference, reasoning that the reference does not qualify as prior art
`
`in CBM proceedings under Section 18(a)(1)(C) of the AIA. See CBM2013-
`
`00008, paper 24, 2-3.
`
`Because Petitioner has not demonstrated that Cohen or Flitcroft
`
`qualifies as prior art under Section 18(a)(1)(C) of the AIA, we are not
`
`persuaded that Petitioner demonstrates that it is more likely than not that
`
`claims 1-15 and 22-30 are unpatentable as being anticipated by Cohen or
`
`Flitcroft. We similarly are not persuaded that Petitioner demonstrates that it
`
`is more likely than not that claims 16-21 are unpatentable as being obvious
`
`over Cohen or Flitcroft, and Musmanno.
`
`9
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`III.
`
`CONCLUSION
`
`For the foregoing reasons, we determine that the information
`
`presented in the petition does not establish that it is more likely than not that
`
`claims 1-30 of the ’486 patent are unpatentable and, accordingly, decline to
`
`institute a covered business method patent review of the ’486 patent.
`
`IV.
`
`ORDER
`
`For the foregoing reasons, it is
`
`ORDERED that the petition is denied as to all challenged claims of
`
`the ’486 patent.
`
`
`
`
`
`
`10
`
`
`
`Case CBM2013-00058
`Patent 7,840,486
`
`
`
`
`PETITIONER:
`
`Robert Scheinfeld
`Eliot Williams
`BAKER BOTTS LLP
`robert.scheinfeld@bakerbotts.com
`eliot.williams@bakerbotts.com
`
`PATENT OWNER:
`
`Stephen Lewellyn
`Britney Maxey
`MAXEY LAW OFFICES, PLLC
`s.lewellyn@maxeyiplaw.com
`b.maxey@maxeyiplaw.com
`
`
`11
`
`
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