IN THE UNITED STATES PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`In re Post-Grant Review of:
`
` U.S. Patent No. 5,940,510
`
`Issued: August 17, 1999
`
`
`Inventors: Stephen M. Curry et al.
`
`
`Application No. 08/594,975
`
`
`Filed: January 31, 1996
`
`
`For: TRANSFER OF VALUABLE
`
`INFORMATION BETWEEN
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`A SECURE MODULE AND
`
`ANOTHER MODULE
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S.P.T.O.
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`
`)
`)
`) U.S. Class: 380/25
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`)
`)
`)
`)
`)
`)
`)
`) FILED ELECTRONICALLY
`) PER 37 C.F.R. § 42.6(b)(1)
`)
`)
`)
`
`
`
`PETITION FOR POST-GRANT REVIEW UNDER 35 U.S.C. § 321 AND
`§ 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`Pursuant to 35 U.S.C. § 321 and § 18 of the Leahy-Smith America Invents Act
`
`
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`(“AIA”) and pursuant to 37 C.F.R. § 42.300 et seq., PNC Bank, N.A. (“PNC”), JP
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`Morgan Chase & Co., and JP Morgan Chase Bank, N.A. (“JP Morgan”) (collectively,
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`“Petitioner”) hereby requests post-grant review of claims 1, 3, 5, and 6 of U.S. Patent
`
`No. 5,940,510 (“the ’510 patent,” attached as Petition Exhibit 1001), now purportedly
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`assigned to Maxim Integrated Products, Inc. (“Maxim”).
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`

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`
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`An electronic payment in the amount of $30,000.00 for the post-grant review
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`fee specified by 37 C.F.R. § 42.15(b)(1)—comprising the $12,000.00 request fee and
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`$18,000.00 post-institution fee—is being paid at the time of filing this petition. If
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`there are any additional fees due in connection with the filing of this paper, please
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`charge the required fees to our deposit account no. 06-0916.
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`ii
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`TABLE OF CONTENTS
`PRELIMINARY STATEMENT .................................................................. 1
`I.
`II. MANDATORY NOTICES ........................................................................... 2
`
`A.
`
`B.
`
`C.
`
`Real Party-in-Interest .............................................................................. 2
`
`Related Matters ....................................................................................... 2
`
`Lead and Back-Up Counsel and Service Information ............................. 5
`
`III. OVERVIEW OF THE ’510 PATENT AND ITS PROSECUTION
`HISTORY ....................................................................................................... 5
`
`A.
`
`B.
`
`Specification ........................................................................................... 5
`
`Challenged Claims .................................................................................. 8
`
`Prosecution History .............................................................................. 10
`C.
`IV. GROUNDS FOR STANDING................................................................... 11
`
`A.
`
`B.
`
`C.
`
`D.
`
`At Least One Challenged Claim Is Unpatentable .................................. 11
`
`The ’510 Patent is a Covered Business Method Patent .......................... 12
`
`Claims 1, 3, 5, and 6 are Not Directed to a “Technological
`Invention” ............................................................................................ 13
`
`Petitioner has been Sued for Infringement of the ’510 Patent and
`is Not Estopped ................................................................................... 16
`
`V.
`
`STATEMENT OF PRECISE RELIEF REQUESTED FOR
`EACH CLAIM CHALLENGED ............................................................... 16
`
`A.
`
`B.
`
`C.
`
`Claims for which Review is Requested .................................................. 16
`
`Statutory Grounds of Challenge ........................................................... 16
`
`Claim Construction .............................................................................. 17
`
`1.
`
`Broadest Reasonable Interpretation ............................................ 17
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`iii
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`VI. CLAIMS 1, 3, 5, AND 6 OF THE ’510 PATENT ARE
`UNPATENTABLE ...................................................................................... 21
`
`A.
`
`1.
`
`Claims 1, 3, 5, and 6 are Invalid Under 35 U.S.C. § 103 ........................ 21
`The combination of Cremin and Tamada renders the
`challenged claims obvious .......................................................... 21
`The combination of Cremin, Tamada, and Schneier renders
`claims 5 and 6 obvious ............................................................... 37
`The combination of Rosen and Tamada renders the
`challenged claims obvious .......................................................... 38
`
`2.
`
`3.
`
`B.
`
`Claims 1, 3, 5, and 6 Are Invalid Under 35 U.S.C. § 101 ....................... 50
`
`1.
`
`The ’510 Patent Claims are Directed to an Abstract Idea ........... 50
`
`2.
`
`The ’510 Patent Claims do not Recite “Significantly More”
`than the Abstract Idea ................................................................ 51
`VII. CONCLUSION ............................................................................................ 52
`
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`iv
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`FEDERAL CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Bilski v. Kappos,
`130 S. Ct. 3218 (2010) .......................................................................................... 50
`CyberSource Corp. v. Retail Decisions, Inc.,
`654 F.3d 1366 (Fed. Cir. 2011) ........................................................................................ 51
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ................................................................................................ 52
`In re Bilski,
`545 F.3d 943 (Fed. Cir. 2008) (Rader, J., dissenting) ............................................. 50
`In re Maxim Integrated Prods., Inc.,
`Case No. 2:12-mc-00244, MDL No. 2354 (“Maxim MDL”) ................................... 2
`Maxim Integrated Prods., Inc. v. JP Morgan Chase & Co.,
`Case No. 2:12-cv-01641-JFC (W.D. Pa.) .................................................................. 2
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) .............................................................................. 50, 51, 52
`Parker v. Flook,
`437 U.S. 584 (1978) .............................................................................................. 51
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ............................................................. 17
`PNC Fin. Servs. Grp., Inc. v. Maxim Integrated Prods., Inc.,
`Case No. 2:12-cv-00089-JFC (W.D. Pa.) .................................................................. 2
`FEDERAL STATUTES
`
`A.I.A. § 18 ........................................................................................................... 16, 53
`
`35 U.S.C. § 101 ...................................................................................................passim
`35 U.S.C. § 102 .................................................................................................................... 4, 53
`
`35 U.S.C. § 103 ...................................................................................................passim
`v
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`35 U.S.C. § 321 .......................................................................................................... 16
`
`35 U.S.C. § 324 .................................................................................................... 11, 53
`REGULATIONS
`
`37 C.F.R. § 42.300 ..................................................................................................... 17
`
`37 C.F.R. § 42.301 ................................................................................................ 12, 13
`
`37 C.F.R. § 42.302 ...................................................................................................... 16
`
`77 Fed. Reg. 48,734 (Aug. 14, 2012) ........................................................................... 12
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`77 Fed. Reg. 48,756 (Aug. 14, 2012) ..................................................................... 13, 15
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`
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`LIST OF EXHIBITS
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`Petition Exhibit 1001:
`
`U.S. Patent No. 5,940,510
`
`Petition Exhibit 1002:
`
`Declaration of Steven Bristow
`
`Petition Exhibit 1003:
`
`PNC Fin. Servs. Grp., Inc. v. Maxim Integrated Prods., Inc., Case
`No. 2:12-cv-00089-JFC (W.D. Pa.), Docket No. 12, Maxim
`Integrated Products, Inc.’s Answer to Complaint for
`Declaratory Judgment and Counterclaims (Jun. 6, 2012)
`
`Petition Exhibit 1004: Maxim Integrated Prods., Inc. v. JP Morgan Chase & Co., Case
`No. 2:12-cv-01641-JFC (W.D. Pa.), Docket No. 1,
`Complaint for Patent Infringement (Oct. 1, 2012)
`
`Petition Exhibit 1005:
`
`PNC Fin. Servs. Grp., Inc. v. Maxim Integrated Prods., Inc., Case
`No. 2:12-cv-00089-JFC (W.D. Pa.), Docket No. 70, Order
`(Feb. 11, 2013)
`
`Petition Exhibit 1006: Maxim Integrated Prods., Inc. v. JP Morgan Chase & Co., Case
`No. 2:12-cv-01641-JFC (W.D. Pa.), Docket No. 9, Civil
`Docket for Case #: 4:12-cv-00619-RC-ALM (Nov. 8, 2012)
`
`Petition Exhibit 1007:
`
`The Authoritative Dictionary of IEEE Standards Terms,
`IEEE Press, Seventh Ed.
`
`Petition Exhibit 1008:
`
`Patent File History for U.S. Patent No. 5,940,510
`
`Petition Exhibit 1009:
`
`In re Maxim Integrated Prods., Inc., Case No. 2:12-mc-00244,
`MDL No. 2354 (W.D. Pa.), Docket No. 691, Special
`Master’s Report and Recommendation Re: Claim
`Construction (Oct. 9, 2013)
`
`Petition Exhibit 1010: Dictionary.com definition of “Module”
`
`Petition Exhibit 1011:
`
`International Publication No. WO 83/03018 to Cremin et
`al. (“Cremin”) published on September 1, 1983.
`
`Petition Exhibit 1012:
`
`European Patent No. 0316689 to Tamada et al. (“Tamada”)
`published as a patent on July 6, 1994.
`
`Petition Exhibit 1013:
`
`European Patent No. 0684556.
`
`
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`vii
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`Petition Exhibit 1014: Applied Cryptography by Schneier (“Schneier”) published in
`1994.
`
`Petition Exhibit 1015:
`
`U.S. Patent No. 5,453,601 to Rosen (“Rosen”) published on
`September 26, 1995.
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`
`I.
`
`Covered Business Method Patent Review
`United States Patent No. 5,940,510
`
`PRELIMINARY STATEMENT
`
`By its own words, the ’510 patent relates to the general notion of “transferring
`
`units of value” between a secure module and another module used to carry a
`
`monetary equivalent. Ex. 1001, 1:20-25. The claims of the ’510 patent are even
`
`broader, reciting a system of “communicating data securely” during any type of
`
`transaction (not just financial) between modules. Infra at § III.B.
`
`The ’510 patent does not suggest that any novel hardware is used to implement
`
`the claimed “transaction” system. Rather, the patent emphasizes that the
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`configuration of the system’s claimed “modules” was unimportant. See Ex. 1001, 5:58-
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`60 (explaining that “[o]ne of ordinary skill will understand that there are many
`
`comparable variations of the module design” that could be used). Each module, the
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`patent discloses, simply consists of “general-purpose” components used for their
`
`known purpose. See id. at 5:36-62; Ex. 1002, ¶¶ 13-14.
`
`During prosecution, the claims were repeatedly amended to list more and more
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`routine computer hardware components to the claims ― often with little to no ties
`
`between the other listed components.1 Infra at § III.C. Eventually, the Examiner
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`allowed the claims in response to a new claim set that added even more conventional
`
`components. Id. As outlined in detail below, however, the prior art applied in this
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`petition renders these claims invalid under 35 U.S.C. § 103.
`
`
`1 For example, claim 1 recites “an energy circuit for storing energy” with no ties to
`any other claim elements.
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`1
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`Covered Business Method Patent Review
`United States Patent No. 5,940,510
`These broad claims also suffer from other defects. As discussed below, these
`
`claims simply relate to abstract data-transfer concepts dressed up with recitations to
`
`routine and conventional computer components. As a result, the challenged claims are
`
`also unpatentable under 35 U.S.C. § 101. Infra at § VI.B.
`
`II. MANDATORY NOTICES
`A. Real Party-in-Interest
`The real parties-in-interest are PNC Bank, N.A. (a subsidiary of The PNC
`
`Financial Services Group, Inc.) (“PNC”) and JP Morgan Chase & Co. and JP Morgan
`
`Chase Bank, N.A. (“JP Morgan”).
`
`B. Related Matters
`Following its purchase of the ’510 patent, Maxim has gone on to assert this
`
`patent against at least 17 different financial companies in various lawsuits. The lawsuit
`
`against PNC is captioned PNC Fin. Servs. Grp., Inc. v. Maxim Integrated Prods., Inc., No.
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`2:12-cv-00089-JFC (W.D. Pa.), see, e.g., Ex. 1003 at 12-13, and the lawsuit against JP
`
`Morgan is captioned Maxim Integrated Prods., Inc. v. JP Morgan Chase & Co., No. 2:12-cv-
`
`01641-JFC (W.D. Pa.), see, e.g., Ex. 1004 at 13-15.
`
`The courts have since consolidated many of the lawsuits into a multidistrict
`
`litigation pending in the W. D. of Pennsylvania, captioned In re Maxim Integrated Prods.,
`
`Inc., No. 2:12-mc-00244, MDL No. 2354 (“Maxim MDL”). See, e.g., Ex. 1005; Ex.
`
`1006.
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`2
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`Covered Business Method Patent Review
`United States Patent No. 5,940,510
`In addition to the lawsuits against PNC and JP Morgan, Maxim has also
`
`asserted the ’510 patent in Maxim Integrated Prods., Inc. v. Branch Banking & Trust Co.,
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`4:12‐cv‐00369‐RAS (E.D. Tex.), and in the following lawsuits (as transferred for MDL
`
`purposes):
`
` KeyCorp v. Maxim Integrated Prods., Inc., No. 2:12-cv-00860-JFC
`
` Vanguard Grp., Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00862-JFC
`
` Jack Henry & Assocs., Inc. v. Maxim Integrated Prods., No. 2:12-cv-00863-JFC
`
` Maxim Integrated Prods., Inc. v. Comerica Inc., No. 2:12-cv-00869-JFC
`
` Fidelity Brokerage Servs. LLC v. Maxim Integrated Prods., Inc., No. 2:12-cv-00871-
`
`JFC
`
` Maxim Integrated Prods., Inc. v. First United Bank & Trust Co., No. 2:12-cv-00876-
`
`JFC
`
` Maxim Integrated Prods., Inc. v. Starbucks Corp., No. 2:12-cv-00877-JFC
`
` Maxim Integrated Prods., Inc. v. Expedia, Inc., No. 2:12-cv-00878-JFC
`
` Maxim Integrated Prods., Inc. v. Capital One Fin. Corp., No. 2:12-cv-00879-JFC
`
` Maxim Integrated Prods., Inc. v. Bank of the West, No. 2:12-cv-00880-JFC
`
` Maxim Integrated Prods., Inc. v. Groupon, Inc., No. 2:12-cv-00881-JFC
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` Maxim Integrated Prods., Inc. v. Union Bank, N.A., No. 2:12-cv-00882-JFC
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` Maxim Integrated Prods., Inc. v. Southwest Airlines, Co., No. 2:12-cv-00883-JFC
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` Chipotle Mexican Grill, Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00887-JFC
`3
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`Covered Business Method Patent Review
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` Maxim Integrated Prods., Inc. v. QVC, Inc., No. 2:12-cv-00891-JFC
`
` Clairmail Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00923-NBF
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` Branch Banking & Trust Co. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00945-
`
`JFC
`
` BMO Harris Bank Nat’l Ass’n v. Maxim Integrated Prods., Inc., No. 2:12-cv-01538-
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`JFC
`
` Deutsche Bank AG v. Maxim Integrated Prods., Inc., No. 2:12-cv-01604-JFC
`
` Maxim Integrated Prods., Inc. v. Citigroup, Inc., No. 2:12-cv-01628-JFC
`
` Maxim Integrated Prods., Inc. v. Target Corp., No. 2:12-cv-01629-JFC
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` Maxim Integrated Prods., Inc. v. Wells Fargo & Co., No. 2:12-cv-01639-JFC
`
` Maxim Integrated Prods., Inc. v. Bank of Am. Corp., No. 2:12-cv-01640-JFC
`
` Maxim Integrated Prods., Inc. v. U.S. Bancorp, No. 2:12-cv-01642-JFC
`
` Maxim Integrated Prods., Inc. v. Walmart Stores, Inc., No. 2:12-cv-01643-JFC
`
`Petitioners concurrently filed a request for ex parte reexamination (Control No.
`
`90/013,063) of the ’510 patent asserting that the challenged claims are also invalid
`
`under 35 U.S.C. § 102(e).
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`Covered Business Method Patent Review
`United States Patent No. 5,940,510
`Lead and Back-Up Counsel and Service Information
`
`C.
`
`Lead Counsel
`Lionel M. Lavenue
`Reg. No. 46,859
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`Two Freedom Square
`11955 Freedom Drive
`Reston, VA 20190-5675
`Telephone: 571.203.2750
`Facsimile: 571.203.2777
`E-mail: PNC-JPMorgan-
`MaximCBMs@finnegan.com
`
`Backup Counsel
`Timothy J. May
`Reg. No. 41,538
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`Telephone: 202.408.4447
`Facsimile: 202.408.4400
`E-mail: PNC-JPMorgan-
`MaximCBMs@finnegan.com
`
`
`III. OVERVIEW OF THE ’510 PATENT AND ITS PROSECUTION
`HISTORY
`A.
`The ’510 patent relates to “transferring units of value” between a
`
`Specification
`
`microprocessor based secure module and another module for “carrying a monetary
`
`equivalent.” Ex. 1001, 1:24-26. According to the patent, exchanging monetary values
`
`between the modules allegedly filled the “need for an electronic system that allows a
`
`consumer to fill an electronic module with a cash equivalent in the same way a
`
`consumer fills his wallet with cash.” Id. at 1:49-51.
`
`As shown in the patent’s Fig. 1 (reproduced below), the disclosed system has
`
`three general components: a portable module (e.g., portable module 102), a device
`
`that communicates with the portable module and other components (e.g.,
`
`microprocessor based device 104), and a secure microprocessor based device (e.g.,
`
`secure microprocessor based device 108).
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`Covered Business Method Patent Review
`United States Patent No. 5,940,510
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`
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`The patent explains that the “portable module” 102 (an example of the claimed
`
`“portable module”) can be incorporated into almost any object, such as a ring,
`
`bracelet, wallet, name tag, etc. Id. at 3:43-50. A user carrying the portable module 102
`
`may then communicate with a device 104 (an example of the claimed “portable
`
`module reader”) to make a financial transaction. Id. at 2:46-58, 8:30-52. Like the
`
`portable module 102, the device 104 may also be almost anything―or, in the words of
`
`the patent, “any of an unlimited number of devices.” Id. at 2:36-37. For example, the
`
`device 104 could be “a personal computer, an add-a-fare machine at a train or bus
`
`station (similar to those in today's District of Columbia Metro stations), a turn style, a
`
`toll booth, . . . , etc.” Id. at 2:38-45.
`
`For the secure device 108 (an example of the claimed “secure microcontroller
`
`based module”), that patent explains that this too can “be incorporated into a variety
`
`of objects,” id. at 4:34-48, and could simply be a module, id. at 4:53-55. Examples
`
`include a token, a card, a ring, a computer, a wallet, and jewelry. Id. at 4:34-48. In one
`
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`United States Patent No. 5,940,510
`embodiment, the secure device 108 is simply a trusted computer that stores an
`
`account to which the portable module can transfer funds into or out of using device
`
`104. Id. at 4:40-41, 7:12-9:2.
`
`The ’510 patent gives a few block-diagram examples of the above “modules”
`
`and “devices.” See, e.g., id. at Figs. 2, 3 (illustrating basic components, such as
`
`nonvolatile memory, a real time clock, a counter, an I/O circuit, etc.). Nowhere,
`
`however, does the patent suggest that the component design of these modules or
`
`devices is novel. To the contrary, the patent indicates that each comprises “general-
`
`purpose” components. Id. at 5:39-40. If anything, the patent suggests that the
`
`purported invention does not lie in the component design of these modules and
`
`devices: “One of ordinary skill will understand that there are many comparable
`
`variations of the module design.” Id. at 5:58-60.
`
`This is not surprising because the purported invention is a process of
`
`“transferring units of value between a microprocessor based secure module and
`
`another module for carrying a monetary equivalent,” id. at 1:24-26, not a new
`
`combination of hardware. The patent lacks any discussion of why the claimed
`
`combination would have been novel or yielded any unexpected results or how each of
`
`these particular elements is used in the purportedly inventive process. Instead, the
`
`patent explicitly disclaims the requirement of any particular arrangement of hardware.
`
`See, e.g., id. at 5:58-60 (explaining that “[o]ne of ordinary skill will understand that there
`
`are many comparable variations of the module design” that could be used).
`7
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`Covered Business Method Patent Review
`United States Patent No. 5,940,510
`The operations performed by these components are straightforward. For
`
`example, the patent describes transferring “units of value” like a “monetary
`
`equivalent,” similar to the paper fair cards used by the DC metro system. See id. at
`
`1:21-25, 1:66-2:4, 2:40-41. The patent explains that this entails using the module’s or
`
`device’s components to merely keep accounting records of transactions (e.g., time
`
`stamping the transaction, maintaining a transaction count, storing an identifier of the
`
`transaction, etc.). Id. at 3:33-35, 8:1-7. Finally, the patent discloses securing the
`
`transaction by implementing widely-known standards, such as RSA, and known
`
`communication techniques (multiple wires, a wireless communication system, infrared
`
`light, any electromagnetic means, or any other similar technique). See, e.g., id. at 2:21-
`
`58, 4:61-65.
`
`Challenged Claims
`
`B.
`The ’510 patent includes six claims. At this time, Petitioner requests
`
`cancellation of claims 1, 3, 5, and 6.
`
`Claim 1, the sole independent claim, recites three structures: a “first portable
`
`module” (corresponding to the portable module 102 of Fig. 1), a “portable module
`
`reader” (corresponding to the device 104 of Fig. 1), and a “secure microcontroller”
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`(corresponding to the device/module 108 of Fig. 1). The claim also lists a variety of
`
`known components for the “first portable module” and the “secure microcontroller,”
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`Covered Business Method Patent Review
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`often with minimal to no interconnections between these known components.2 In
`
`full, claim 1 recites:
`
`1. A system for communicating data securely, comprising:
`
`a first portable module comprising:
`
`a nonvolatile memory for storing a first data;
`
`a first real time clock circuit for time stamping data
`transactions;
`
`a counter for counting a transaction count;
`
`an input/output circuit;
`
`a substantially unique electronically readable identification
`number readable by said input/output circuit; and
`
`a memory control circuit in electrical communication with
`said nonvolatile memory, said real time clock, said counter,
`and said input/output circuit;
`
`a portable module reader that can be placed in communication
`with said first portable module, said portable module reader can
`be connected to a plurality of other devices;
`
`a secure microcontroller based module in electronic
`communication with said portable module reader, said secure
`microcontroller comprising:
`
`a microcontroller core;
`
`
`2 For example, the “energy circuit” lacks any interconnection to any of the other listed
`components.
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`a math coprocessor, in communication with said
`microcontroller core, for processing encryption
`calculations;
`
`an energy circuit for storing energy;
`
`a memory circuit connected to said microcontroller core;
`
`a memory circuit in communication with said
`microcontroller core; and
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`a second real time clock circuit in communication with said
`microcontroller,
`
`said combination of said portable module reader and said secure
`microcontroller performing secure data transfers with said first
`portable module.
`
`Prosecution History
`
`C.
`The application that issued as the ’510 patent was filed on January 31, 1996,
`
`with twenty-one claims. Originally filed claim 1 recited the following limitations:
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`a first module for containing a first data;
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`an electronic system comprising a secure module, said
`electronic system adapted to be able to communicate with
`said first module.
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`Ex. 1008, As-Filed Application.
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`To overcome a prior art rejection, claim 1 was then amended to recite a “real-
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`time clock for time-stamping data transactions.” Id. at Amendment of Nov. 26, 1997.
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`In response to another rejection (which added a new reference to teach a real-time
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`clock), claim 1 was again amended to recite a “counter for counting a number of
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`transaction that said first module performs” to the claims. Id. at Amendment of Jun.
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`10, 1998. But the Examiner continued to reject the claims by citing a disclosure of the
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`claimed counter. Id. at Office Action of Aug. 10, 1998.
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`Finally, all of the pending claims were cancelled and replaced with new claims
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`that now correspond to claims 1-6 of the ’510 patent. Id. at Amendment of Nov. 8,
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`1998. These new claims differed from the previously pending claims by adding to the
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`claimed “first portable module” a number of components such as “a substantially
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`unique electronically readable identification number readable by said input/output
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`circuit;” and by adding to the claimed “secure microcontroller” the following two
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`components “a microcontroller core” and “a math coprocessor, in communication
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`with said microcontroller core, for processing encryption calculations.” Id. No prior
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`art was ever applied by the Examiner against the newly added components, and the
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`new claims were essentially allowed without further comment from the Examiner. Id.
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`at Notice of Allowance. The ’510 patent then issued on August 17, 1999. Ex. 1001,
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`[45].
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`IV. GROUNDS FOR STANDING
`A.
`As further detailed below, claims 1, 3, 5, and 6 of the ’510 patent are invalid
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`At Least One Challenged Claim Is Unpatentable
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`under at least one or more of 35 U.S.C. §§ 101 and 103. For the reasons set forth
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`below, it is more likely than not that at least one of the claims of the ’510 patent is
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`unpatentable. 35 U.S.C. § 324(a).
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`B. The ’510 Patent is a Covered Business Method Patent
`The AIA defines a CBM patent as “a patent that claims a method or
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`corresponding apparatus for performing data processing or other operations used in
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`the practice, administration, or management of a financial product or service . . . .”
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`AIA § 18(d)(1); see also 37 C.F.R. § 42.301. The USPTO noted that the AIA’s legislative
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`history demonstrates that “financial product or service” should be “interpreted
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`broadly,” encompassing patents “claiming activities that are financial in nature,
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`incidental to a financial activity or complementary to a financial activity.” Transitional
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`Program for Covered Business Method Patents--Definitions of Covered Business
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`Method Patent and Technological Invention; Final Rule, 77 Fed. Reg. 48,734, 48735
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`(Aug. 14, 2012). This Board has explained that based on the legislative history “[t]he
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`term financial is an adjective that simply means relating to monetary matters.” SAP
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`Am., Inc. v. Versata Dev. Grp., Inc., CBM2012-00001, Paper 36 at 23 (P.T.A.B. Jan. 9,
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`2013).
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`Claims 1, 3, 5, and 6 of the ’510 patent relate to monetary matters. The patent
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`states, e.g., that “the disclosed system, apparatus and method are useful for enabling a
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`user to fill a portable module with a cash equivalent and to spend the cash equivalent at
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`a variety of locations,” Ex. 1001 at Abstract, and explains that “[t]he portable module
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`can be used as a cash equivalent when buying products and services in the market place,” id. at
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`1:60-63. Each of the ’510 patent’s disclosed embodiments also describes transferring
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`digital money or value used as payment. See id. at 7:13-8:29, 8:30-9:16.
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`The litigation behavior of patent owner Maxim is even more telling. It has sued
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`over 17 financial services entities and represented in district court litigations that
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`defendants’ mobile banking applications infringe the ’510 patent. See, e.g., supra at
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`§ II.B. Maxim cannot now deny that the ’510 patent is subject to a CBM proceeding.
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`Moreover, the prosecution history states that the ’510 patent allows a user to use
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`digital money. Ex. 1008, Amendment of Nov. 8, 1998.
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`C.
`
`Claims 1, 3, 5, and 6 are Not Directed to a “Technological
`Invention”
`
`The AIA excludes “patents for technological inventions” from the definition
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`of CBM patents. AIA § 18(d)(1). To determine when a patent is for a technological
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`invention, “the following will be considered on a case-by-case basis: whether the
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`claimed subject matter as a whole recites a technological feature that is novel and
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`unobvious over the prior art; and solves a technical problem using a technical
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`solution.” 37 C.F.R. § 42.301. To institute a CBM post-grant review, a patent need only
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`have one claim directed to a CBM, and not a technological invention, even if the
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`patent includes additional claims. 77 Fed. Reg. 48,756; see also CBM2012-00001, Paper
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`36 at 26.
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`Recent decisions by the Board illustrate how these principles may be applied to
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`system claims comprising hardware elements. For example, in considering a system
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`claim directed to calculating insurance risk value, the PTAB stated that “on this
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`record, none of the claim elements, such as sensors, vehicle bus, wireless transmitter,
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`database, computer, memory, and server is novel and unobvious when considered
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`‘without’ the insurance nature of the data processed.” Liberty Mut. Ins. Co. v. Progressive
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`Cas. Ins. Co., CBM2012-00003, Paper 15 at 13-14 (P.T.A.B. Feb. 12, 2013). Moreover,
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`“simply using technology, even novel technology, is not sufficient to qualify for the
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`‘technological invention’ exception.” Id. at 10. The patent must recite a novel
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`technological feature that is obvious over the prior art. Because the claims of the ’510
`
`patent fail to recite a novel and unobvious technological feature and fail to recite a
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`technical solution to a technical problem, the patent is not for a technological
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`invention.
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`The ’510 patent does not recite a novel and unobvious technological feature
`
`because the ’510 patent only claims generic, conventional, and routine items when
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`considered without the financial nature of the data being processed. The ’510 patent
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`makes clear that “the present invention relates to transferring units of value between a
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`microprocessor based secure module and another module used for carrying a
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`monetary equivalent.” Ex. 1001, 1:22-25. Any alleged novelty of the hardware
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`components stems from the financial nature of carrying and transferring money and
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`not from the components themselves. Indeed, to the extent the claims require any
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`hardware, the claimed hardware was not only generic but also part of known
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`implementations included in the manual for the 8051 microcontroller referenced by
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`the patent (Ex. 1002, ¶ 13) and the technology recited in the patent is only being used
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`for its routine and conventional purpose (Ex. 1002, ¶¶ 14, 16).
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`For example, claim 1 recites a portable module comprising “a nonvolatile
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`memory,” a “real time clock,” a “counter,” “an input/output circuit,” an
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`“identification number,” and a “memory control circuit,” which were all well-known
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`components in 1995. See Ex. 1002, ¶¶ 13-14; see also infra at § VI.A. Claim 1 also
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`recites “a portable module reader,” which was also well known in 1995. Id. Last, claim
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`1 recites “a secure microcontroller” comprising “a microcontroller core,” “a math
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`coprocessor,” “an energy circuit,” “a memory circuit,” and a “real time clock,” which
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`again recite nothing more than well-known components in 1995. Id. The patent itself
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`concedes the technology was well known and commonplace; e.g., a microprocessor
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`based electronic device could be “any of an unlimited number of devices” that were known
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`in the art, listing a dozen examples. Ex. 1001 at 2:35-45. “Mere recitation of known
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`technologies, such as computer hardware, communication or computer networks,
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`software, memory, computer-readable storage medium, scanners, display devices or
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`databases, or specialized machines, such as an ATM or point of sale device,” or
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`“[r]eciting the use of known prior art technology to accomplish a process or method,
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`even if that process or method is novel and nonobvious” will “not typically render a
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`patent a technological invention.” See, e.g., 77 Fed. Reg. 48,756, 48,764; see also Liberty
`
`Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00002, Paper 10 at 7-8 (P.T.A.B. Jan.