`
`
`
`
`Case CBM2014-00090
`Patent 5,805,702
`Attorney Docket No. 140401-001USCBM
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GROUPON, INC.
`Petitioner
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
`____________
`
`Case CBM2014-00090
`Patent 5,805,702
`____________  
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`PRELIMINARY RESPONSE TO PETITION FOR COVERED BUSINESS
`METHOD PATENT REVIEW OF UNITED STATES PATENT NO.
`5,805,702 PURSUANT TO 35 U.S.C. § 321, 37 C.F.R. § 42.304
`
`
`
`

`

`  
`  
`
`
`TABLE OF CONTENTS
`
`      INTRODUCTION. .......................................................................................... 1  
`I.  
`  THE ’702 PATENT. ........................................................................................ 6  
`II.  
`III.   CLAIM CONSTRUCTION. ......................................................................... 8  
`IV.   REVIEW IS BARRED BECAUSE PETITIONER FAILED TO SHOW
`THAT THE PATENT IS A “COVERED BUSINESS METHOD”
`PATENT. ....................................................................................................... 9  
`V.   THE PETITION AND ITS PURPORTED EXPERT TESTIMONY
`DISREGARD ESTABLISHED AND PROPER LEVELS OF
`ORDINARY SKILL IN THE ART. .......................................................... 13  
`VI.   PETITIONER FAILS TO MEET ITS STATUTORY BURDEN TO
`SHOW THAT IT IS MORE LIKELY THAN NOT THAT JONES
`ANTICIPATES THE CHALLENGED CLAIMS. .................................. 17  
`A.   Petitioner Provides No Explanation Of How Its Collection Of Quotations From
`Jones Anticipates The Challenged Claims. ........................................................... 17  
`B.   The Petition Fails To Show That Jones Anticipates The Challenged Claims. .......... 20  
`1.   The Petition Fails To Show That Jones Discloses “Communicating A
`Random Number From Said Module To Said Electronic Device.” .......... 20  
`2.   Petitioner Fails To Show That Jones Discloses “Combining Said Random
`Number And Said Amount Requested Thereby Creating A Said Data
`Packet In Said Electronic Device.” ........................................................... 22  
`3.   Petitioner Fails To Show That Jones Discloses “Decrypting Said Signed
`Certificate In Said Module With A Second Key Thereby Creating A
`Decrypted Random Number And A Decrypted Amount Requested.” ........ 23  
`VII.   THE PETITION FAILS TO MEET ITS STATUTORY BURDEN TO
`SHOW THAT IT IS MORE LIKELY THAN NOT THAT JONES IN
`VIEW OF ISHIGURO RENDERS THE CHALLENGED CLAIMS
`OBVIOUS. ................................................................................................... 27  
`A.   The Petition Offers No Explanation How Jones And Ishiguro Should Be Combined
`To Render The Challenged Claims Obvious. ........................................................ 27  
`B.   The Deficiencies And Contradictory Approaches Of The Petition Render The
`Second Requested Ground Of Review Redundant. ............................................... 30  
`
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`C.   The Petition Fails To Explain How Its Collected Quotations From Jones And
`Ishiguro Render The Challenged Claims Obvious. ............................................... 32  
`D.   The Petition Identifies No Reason Why A Person Of Ordinary Skill In The Art
`Would Be Motivated And Able To Combine Jones And Ishiguro. ...................... 35  
`E.   The Petition Fails To Make Any Showing That Jones In Combination With Ishiguro
`Renders The Challenged Claims Obvious. ............................................................ 42  
`1.   The Petition Fails To Show That Ishiguro Discloses “Indicating An Amount
`Requested To Said Electronic Device.” .................................................... 43  
`2.   The Petition Fails To Show That Ishiguro Discloses “Communicating A
`Random Number From Said Module To Said Electronic Device.” .......... 48  
`3.   The Petition Fails To Show That Ishiguro Discloses “Combining Said
`Random Number And Said Amount Requested Thereby Creating A First
`Data Packet In Said Electronic Device.” .................................................. 49  
`4.   The Petition Fails To Show That Ishiguro Discloses “Encrypting Said First
`Data Packet With A First Key Thereby Creating A Said Signed Certificate
`In Said Electronic Device.” ....................................................................... 50  
`5.   The Petition Fails To Show That Ishiguro Discloses “Communicating Said
`Signed Certificate From Said Electronic Device To Said Module.” ......... 51  
`6.   The Petition Fails To Show That Ishiguro Discloses “Decrypting Said Signed
`Certificate In Said Module With A Second Key Thereby Creating A
`Decrypted Random Number And A Decrypted Amount Requested.” ........ 51  
`7.   The Petition Fails To Show That Ishiguro Discloses “Comparing Said
`Random Number With Said Decrypted Random Number And Determining
`If They Match In Said Module.” ................................................................ 52  
`8.   The Petition Fails To Show That Ishiguro Discloses “Adding Said Decrypted
`Amount Requested To A Money Register In Said Module.” ..................... 53  
`VIII.   THE PETITION FAILS TO MEET ITS STATUTORY BURDEN TO
`SHOW THAT IT IS MORE LIKELY THAN NOT THAT HERRING
`IN VIEW OF RIVEST RENDERS THE CHALLENGED CLAIMS
`OBVIOUS. ................................................................................................... 54  
`A.   The Board Should Exercise Its Discretion To Deny This Requested Ground Because
`Herring Was Previously Considered By The Office And The Petition Fails To
`Rebut The Examiner’s Findings. ........................................................................... 54  
`B.   The Petition Fails To Meet The Statutory Burden For Initiation Because It Fails To
`Explain How Herring And Rivest Should Be Combined To Allegedly Render The
`
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`  
`  
`
`Challenged Claims Obvious, And Takes Only The Position That Herring Alone
`Discloses Each And Every Limitation. ................................................................. 60  
`C.   The Petition Fails To Meet Its Statutory Burden Because It Fails To Explain How Its
`Collection Of Quotations From Herring And Rivest Allegedly Renders The
`Challenged Claims Obvious. ................................................................................. 62  
`D.   The Petition Fails To Meet Its Statutory Burden Because It Fails To Identify Any
`Reasons Why A Person Of Ordinary Skill In The Art Would Be Motivated And
`Able To Combine Herring And Rivest. ................................................................. 63  
`E.   The Petition Fails To Show That Herring In Combination With Rivest Renders The
`Challenged Claims Obvious. ................................................................................. 66  
`1.   The Petition Fails To Show That Either Herring or Rivest Discloses
`“Indicating An Amount Requested To Said Electronic Device.” .............. 66  
`2.   The Petition Fails To Show That Either Herring Or Rivest Discloses
`“Communicating A Random Number From Said Module To Said
`Electronic Device.” ................................................................................... 68  
`3.   The Petition Fails To Show That Either Herring Or Rivest Discloses
`“Combining Said Random Number And Said Amount Requested Thereby
`Creating A First Data Packet In Said Electronic Device.” ...................... 71  
`4.   The Petition Fails To Show That Either Herring Or Rivest Discloses
`“Encrypting Said First Data Packet With A First Key Thereby Creating A
`Signed Certificate In Said Electronic Device.” ......................................... 72  
`5.   The Petition Fails To Show That Either Herring Or Rivest Discloses
`“Decrypting Said Signed Certificate In Said Module With A Second Key
`Thereby Creating A Decrypted Amount Requested.” ................................ 73  
`6.   The Petition Fails To Show That Either Herring Or Rivest Discloses
`“Comparing Said Random Number With Said Decrypted Random Number
`And Determining If They Match In Said Module.” ................................... 74  
`7.   The Petition Fails To Show That Either Herring Or Rivest Discloses “Adding
`Said Decrypted Amount Requested To A Money Register In Said Module.”
` ................................................................................................................... 75  
`IX.   REVIEW ALSO SHOULD NOT BE GRANTED ON CHALLENGED
`DEPENDENT CLAIMS 2, 6 AND 8. ........................................................ 76  
`X.   CONCLUSION .............................................................................................. 76  
`
`
` iii
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`  
`
`
`
`COURT DECISIONS
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`ActiveVideo Networks, Inc. v. Verizon Comm’ns, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012) .......................................................................... 40
`
`Graham v. John Deere Co. of Kansas City,
`383 U.S. 1 (1966) ............................................................................................... 59
`
`Innogenetics, N.V. v. Abbott Labs.,
`512 F.3d 1363 (Fed. Cir. 2008) .......................................................................... 39
`
`Innovention Toys, LLC v. MGA Ent., Inc.,
`637 F.3d 1314 (Fed. Cir. 2011) .......................................................................... 14
`
`Kinetic Concepts, Inc. v. Smith & Nephew, Inc.,
`688 F.3d 1342 (Fed. Cir. 2012) .......................................................................... 41
`
`
`
`AGENCY DECISIONS
`
`Bloomberg Inc., et al. v. Markets-Alert PTY Ltd,
`CBM2013-00005, Paper 18 (PTAB Mar. 29, 2013)
`(per Medley, S.) ............................................................................................ 28, 57
`
`Heart Failure Technologies, LLC v. Cardiokinetix, Inc.,
`IPR2013-000183, Paper 12 (PTAB Jul. 31, 2013)
`(per Kamholz, S.) ................................................................. 18, 32, 35, 38, 61-63
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co.,
`CBM2012-00003, Paper 7 (PTAB Oct. 25, 2012)
`(9-judge panel) (per Lee, J.) .................................................. 27, 29, 30-31, 59-60
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co.,
`CBM 2012-00004, Paper 10 (PTAB Jan. 25, 2013)
`(per Chang, J.) .............................................................................................. 16, 58
`
` iv
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`

`

`  
`  
`OpenTV, Inc. v. Cisco Sys., Inc.,
`IPR2013-00330, Paper 9 (PTAB Nov. 29, 2013)
`(per Arbes, J.) ................................................................................................. 4, 34
`
`Oracle Corp. v. Clouding IP, LLC,
`IPR2013-00075, Paper 8 (PTAB May 3, 2013)
`(per Kim, W.) ................................................................................................. 4, 31
`
`
`
`STATUTES AND RULES
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, 125 Stat. 284 (2011), § 18 ......................................... 1, 9, 10
`
`35 U.S.C. § 314 ................................................................................................... 2, 17
`
`35 U.S.C. § 323 ......................................................................................................... 8
`
`35 U.S.C. § 324 ................................................................................................... 1, 61
`
`35 U.S.C. § 325 ................................................................................................... 5, 53
`
`
`
`REGULATIONS
`
`Changes to Implement Inter Partes Review Proceedings, Post-Grant Review
`Proceedings, and Transitional Program for Covered Business Method Patents;
`Final Rule, 77 Fed. Reg. 48,680 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch.
`1) ...................................................................................................................... 2, 8, 10
`
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`Reg. 48,734 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch. 1) ............................... 12
`
`Office Patent Trial Practice Guide; Rule, 77 Fed. Reg. 48,756 (Aug. 14, 2012) (to
`be codified at C.F.R. pt. 42) .................................................................................... 10
`
`37 C.F.R. § 42.20 .................................................................................................... 16
`
`37 C.F.R. § 42.207 .................................................................................................... 8
`
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`37 C.F.R. § 42.301 .............................................................................................. 9, 10
`
`37 C.F.R. § 42.304 .................................................................................................... 9
`
`
`
`LEGISLATIVE HISTORY
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. S5428 (daily ed. Sept. 8, 2011) .................................................. 2
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. 1360, 1364 (daily ed. Mar. 8, 2011) ......................................... 12
`
`
`
`
`
` vi
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`
`
`EXHIBIT LIST
`
`Exhibit 2001
`
`Exhibit 2002
`
`Exhibit 2003
`
`Exhibit 2004
`
`Exhibit 2005
`
`Exhibit 2006
`
`Exhibit 2007
`
`“POSTAGE METERS Risks of Significant Financial
`Loss But Controls Are Being Strengthened”, Report to
`the Chairman, Subcommittee on Federal Services, Post
`Office and Civil Service, Committee on Governmental
`Affairs, U.S. Senate, United States General Accounting
`Office (May 1994)
`
`“PCs to print postage stamps”,
`http://www.machinedesign.com (2000)
`
` U.S. Patent No. 5,577,121 to Davis (issued Nov. 19,
`1996)
`
`“Growing Hand-In-Hand With The Internet
`Generation”, D Magazine, (Jul. 2000)
`
`Stephen M. Curry, “An introduction to the Java Ring”,
`Java World, (Apr. 1, 1998)
`
`Declaration of Dr. Vijay K. Madisetti, Branch Banking
`& Trust Co. v. Maxim Integrated Prods., Inc.,
`CBM2013-00059, Exhibit 18 (filed Sep. 16, 2013)
`
`Declaration of Stephen D. Bristow, PNC Bank, N.A.,
`JPMorgan Chase & Co. & JPMorgan Chase Bank, N.A.  
`v. Maxim Integrated Prods., Inc., CBM2014-00038,
`Exhibit 1002 (filed Nov. 22, 2013)
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`  
`
`Exhibit 2008
`
`Exhibit 2009
`
`Exhibit 2010
`
`Exhibit 2011
`
`Declaration of Stephen D. Bristow, PNC Bank, N.A.,
`JPMorgan Chase & Co. & JPMorgan Chase Bank, N.A.  
`v. Maxim Integrated Prods., Inc., CBM2014-00039,
`Exhibit 1005 (filed Nov. 22, 2013)
`
`Declaration of Henry N. Dreifus, PNC Bank, N.A.,
`JPMorgan Chase & Co. & JPMorgan Chase Bank, N.A.  
`v. Maxim Integrated Prods., Inc., CBM2014-00040,
`Exhibit 1008 (filed Nov. 22, 2013)
`
`Declaration of Henry N. Dreifus, PNC Bank, N.A.,
`JPMorgan Chase & Co. & JPMorgan Chase Bank, N.A.  
`v. Maxim Integrated Prods., Inc., CBM2014-00041,
`Exhibit 1007 (filed Nov. 22, 2013)
`
`Declaration of Dr. Stuart G. Stubblebine In Support of
`Opposing Parties’ Responsive Claim Construction Brief
`In Re Maxim Integrated Prod., Inc. MDL No 2354
`(Case 2:12-mc-00244-JFC Document 642-24) (filed
`Aug. 14, 2013)
`
`Exhibit 2012
`
`Paul Kocher, Joshua Jaffe & Benjamin Jun,
`“Differential Power Analysis”, Cryptography Research,
`Inc. (1998)
`
`
`
`
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
`
`
`Pursuant to 35 U.S.C. § 323, America Invents Act of 2011 (“AIA”)
`
`§ 18(a)(1), and 37 C.F.R. §§ 42.207-208, the undersigned, on behalf of and acting
`
`in a representative capacity for patent owner, Maxim Integrated Products, Inc.
`
`(“Patent Owner” or “Maxim”), submits the following Preliminary Response to the
`
`Petition for covered business method (“CBM”) patent review filed in the above-
`
`captioned proceeding by Groupon, Inc. (“Petitioner”) against United States Patent
`
`No. 5,805,702 (“the ’702 Patent” or “the Patent”). Petitioner requests review of
`
`claims 1, 2 and 6-8 of the ’702 Patent (“the Challenged Claims”). Claims 2 and 6-
`
`8 depend from claim 1, which is the only independent Challenged Claim.
`
`I.
`
`INTRODUCTION.
`
`The Petition should be denied because it fails to meet the statutory threshold
`
`required to institute a CBM patent review. In the first instance, the Petition should
`
`be rejected under America Invents Act § 18(a)(1)(E) because the Patent is not a
`
`covered business method patent eligible for covered business method patent
`
`review.
`
`Even if the patent had been eligible for CBM patent review, the Petition
`
`should still be denied because it has failed to meet its statutory burden to institute a
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`1
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`review. Congress set the bar for initiation of CBM patent review higher than for
`
`any other form of post-grant review.1 The Director may not institute CBM patent
`
`review unless the information presented in the Petition, in the absence of rebuttal at
`
`trial, “would demonstrate that it is more likely than not that at least” one of the
`
`Challenged Claims is unpatentable. 35 U.S.C. § 324(a).
`
`The Petition comes nowhere close to meeting this heightened burden. The
`
`Petition’s claim charts present merely lists of quoted excerpts from the alleged
`
`prior art references. These enigmatic strings of quotations do not on their face
`
`present any showing of unpatentability, and are unaccompanied in the Petition by a
`
`meaningful explanation or articulated reasoning of how they relate to one another,
`
`let alone disclose the limitations of the Challenged Claims. Nor is explanation
`
`                                                                                                                          
`11  “[T]o initiate a post issuance review under the new post grant or transitional
`
`proceedings, it is not enough that the request shows a substantial new question of
`
`patentability . . . .” 157 Cong. Rec. S5428 (daily ed. Sept. 8, 2011) (statement of
`
`Sen. Leahy); see also Changes to Implement Inter Partes Review Proceedings,
`
`Post-Grant Review Proceedings, and Transitional Program for Covered Business
`
`Method Patents, 77 Fed. Reg. 48,680, 48,702 (Aug. 14, 2012) (to be codified at
`
`37C.F.R. pt. 42) (higher than IPRs); see also 35 U.S.C. § 314(a) (threshold
`
`standard for IPR only “a reasonable likelihood”).  
`
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`2
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`offered for why reliance on one proposed ground or reference may be stronger than
`
`another proposed ground or reference; no meaningful distinction is made between
`
`them. In short, the Petition offers no showing for the Board to adjudicate—no
`
`useful explanation or even paraphrasing of the references’ disclosures, how they
`
`relate to the claim limitations, or how the proposed references and grounds relate
`
`to each other. Finally, Petitioner’s purportedly expert “Clark Declaration” offers
`
`no additional support or explanation of its unpatentability arguments: it is merely a
`
`verbatim reproduction of the claim charts and their lack of explanation. It offers
`
`no further support or underpinnings for Petitioner’s unpatentability arguments, and
`
`is entitled to no weight.
`
`The Petition’s failure to explain and link together its unpatentability
`
`arguments is, itself, grounds to deny review. Even if it were not, to the limited
`
`extent Patent Owner has been able to divine implicit limitation-by-limitation
`
`unpatentability arguments from the limited contents of the Petition, such arguments
`
`could not demonstrate that there is any likelihood that any of the Challenged
`
`Claims are unpatentable. This is true even if one were to accept the Petition’s
`
`reliance on an incorrect level of ordinary skill in the art that is much higher than
`
`proper, as has been established in other proceedings involving the ‘702 and related
`
`patents.
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`3
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`The Petition additionally fails to articulate, with respect to the requested
`
`obviousness grounds for review, any reasons why a person of ordinary skill in the
`
`art would be motivated and able to combine the references as proposed. In fact,
`
`the Petition never explains how or why a person of ordinary skill in the art would
`
`have combined them at all, let alone to achieve the method recited in the claims.
`
`And even though the Petition disclaims any argument that the Ishiguro or Herring
`
`references anticipate a single Challenged Claim, it inconsistently argues that each
`
`of the Jones, Ishiguro and Herring references independently and equally discloses
`
`each and every limitation of the Challenged Claims, and points to no differences
`
`between them. This omission alone dooms the Petition’s obviousness grounds.
`
`See, e.g., OpenTV, Inc. v. Cisco Sys., Inc., IPR2013-00330, Paper 9 at 20 (PTAB
`
`Nov. 29, 2013) (per Arbes, J.) (denying review where “Petitioner has not explained
`
`sufficiently how or why a person of ordinary skill would have combined the
`
`different teachings of [the two obviousness references] to achieve the method
`
`recited in [the claim]. Thus, Petitioner also has not made a threshold showing as to
`
`the alleged obviousness of [the claim].”)
`
`Nor are these the only independently fatal flaws in the Petition’s proposed
`
`obviousness grounds. The Board should also deny the second requested ground as
`
`redundant because the Petition does not explain how this ground, which adds
`
`Ishiguro to Jones, might do more than the requested anticipation ground, which
`
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`4
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`relies on Jones alone. See, e.g., Oracle Corp. v. Clouding IP, LLC, IPR2013-
`
`00075, Paper 8 at 13-14 (PTAB May 3, 2013) (per Kim, W.) (rejecting
`
`obviousness grounds involving same reference as a granted anticipation ground as
`
`redundant). And the Board should deny the third requested ground pursuant to 35
`
`U.SC. § 325(d) because the Office has previously been presented with substantially
`
`similar arguments. Herring was considered in detail during the prosecution of the
`
`’702 Patent. The Petition does not acknowledge, let alone answer, the examiner’s
`
`previous findings of fatal shortcomings in Herring’s disclosure.
`
`In CBM cases, the Board’s task is not to conduct its own examination of
`
`references presented without the most basic explanation, nor to offer its own
`
`conjectures about how and why to combine disclosures. Rather, its statutory task
`
`is to adjudicate the contentions fairly presented to it and meeting the statutory
`
`standard of proof. To support its proposed grounds for review, the Petition offers
`
`only a collection of virtually unexplained excerpts from the disclosures of the
`
`references. The analysis and explanation of how those disclosures purportedly
`
`map to the elements of the claims has been left as an exercise for the Board, and
`
`even a cursory exploration of the disclosures in question reveals that the Petition
`
`repeatedly misapprehends what the references actually disclose. The conclusory
`
`and erroneous arguments in the Petition do not come close to satisfying the
`
`elevated statutory threshold for CBM patent review.
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`5
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`II. THE ’702 PATENT.
`
`The application from which the ’702 Patent issued is one of a group of
`
`interrelated applications analyzed by the Office between 1996, when the first non-
`
`provisional application was filed, and 1999, when US 5,949,880 issued. The ’702
`
`Patent issued on September 8, 1998.2 The specification of the ’702 Patent was
`
`analyzed by the Office over the course of years and in conjunction with at least
`
`five issued patents.
`
`The ’702 Patent and its related patents form the basis of a comprehensive
`
`and commercially successful system that has numerous diverse applications in, for
`
`example, data transfer, authentication and digital cash systems. Utilizing the
`
`inventions described in these patents, including the ’702 Patent, Dallas
`
`                                                                                                                          
`2 US Patent No. 6,237,095 is a divisional from application No. 08/595,014, from
`
`which the ’702 Patent issued. US Patent No. 6,105,013 is a continuation of
`
`application No. 08/594,983, which claims priority to provisional application No.
`
`60/004,510, to which the ’702 Patent also claims priority. US Patent No.
`
`5,940,510 contains related subject matter to and incorporates by reference
`
`application No. 08/595,014, from which the ’702 Patent issued. US Patent No.
`
`5,949,880 is a divisional from application no. 08/594,975, from which US
`
`5,940,510 issued.
`
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`6
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`Semiconductor (now part of Patent Owner) developed and successfully marketed
`
`the Crypto iButton series of products. As an example, the United States Postal
`
`Services, in order to address postage meter fraud estimated at “as high as $171
`
`million annually,” Exhibit 2001 (U.S. General Accounting Office, “Postage
`
`Meters: Risk Of Significant Financial Loss But Controls Are Being Strengthened”,
`
`May 1994) at 2001-001 n.1, approved and utilized the Crypto iButton in 2000.
`
`Exhibit 2002 (Machine Design, “PCs To Print Postage Stamps,” 2000) at 2002-001
`
`(noting that “cryptographic iButton” had received security certification and had
`
`“also passed muster against side channel attacks, sometimes referred to as
`
`differential power analysis, a weakness of some smart cards.”); see also Exhibit
`
`2005 (Java World, “An Introduction To The Java Ring”, April 1, 1998) (noting
`
`that by 1998 Crypto iButton was pending “security certification by the National
`
`Institute of Standards and Technology” for USPS use) at 2005-003. By 2000 this
`
`technology had been “deployed nationwide in E-Stamp’s[] Internet postage
`
`system.” Exhibit 2004 (D Magazine, “Growing Hand-in-Hand with the Internet
`
`Generation”, July 1, 2000) at 2004-001.
`
`The invention of the ’702 Patent was distinct from known systems and
`
`patents at the time of the invention, including those like the references raised by
`
`the Petition herein. The invention discloses systems and methods that uniquely
`
`and successfully address competing objectives and challenges of similar systems at
`
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`7
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`the time of the inventions, including, for example, resource management, security,
`
`anonymity, duplication, fraud, authenticity, portability and programmability. The
`
`asserted references and their relative shortcomings are addressed in more detail
`
`below.
`
`III. CLAIM CONSTRUCTION.
`
`The Petition purports to adopt the claim constructions applied by the U.S.
`
`District Court for the Western District of Pennsylvania in litigations involving the
`
`’702 and other related patents. Pet. at 17. However, the Petition has, as a matter of
`
`law, failed to meet its burden of proof, regardless what constructions are applied to
`
`the claim terms. Nevertheless, Patent Owner reserves its right to address positions
`
`on claim construction if review is initiated.3
`
`                                                                                                                          
`3 “[T]he patent owner shall have the right to file a preliminary response to the
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`petition . . . that sets forth reasons why no post-grant review should be instituted
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`based upon the failure of the petition to meet any requirement of this chapter.” 35
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`U.S.C. § 323; accord 37 C.F.R. § 42.207(a). The statute “does not require that a
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`patent owner preliminary response be considered,” though “the Board expects to
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`consider” most of them. Furthermore, a patent owner preliminary response may
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`not present new “testimony” or “expert” evidence on patentability. Changes To
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`Implement, 77 Fed. Reg. at 48,692 (citing 37 C.F.R. § 42.207(c)). Accordingly,
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`8
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`IV. REVIEW IS BARRED BECAUSE PETITIONER FAILED TO SHOW
`THAT THE PATENT IS A “COVERED BUSINESS METHOD”
`PATENT.
`
`At the threshold, review cannot be initiated because the Petition fails to meet
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`its burden to show that the ’702 Patent is a covered business method patent.
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`Under the America Invents Act, “[t]he Director may institute a transitional
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`proceeding only for a patent that is a covered business method patent.” AIA §
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`18(a)(1)(E). “For purposes of this section, the term ‘covered business method
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`patent’ means a patent that claims a method or corresponding apparatus for
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`performing data processing or other operations used in the practice, administration,
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`or management of a financial product or service, except that the term does not
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`include patents for technological inventions.” Id. § 18(d)(1) (emphasis added);
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`accord 37 C.F.R. § 42.301(a) (same).
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`The Office does not make an initial, sua sponte determination whether a
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`patent is eligible for review; rather, the Office expressly mandates that in this
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`literally inter partes, litigation-like proceeding, the Petitioner “must demonstrate
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`that the patent for which the review is sought is a covered business method patent,”
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`                                                                                                                                                                                                                                                                                                                                                                                                        
`“[n]o adverse inferences will be drawn where a patent owner elects not to file a
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`[preliminary] response or elects to waive the [preliminary] response,” including
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`with respect to issues of “claim construction.” Id. at 48,692, 48,700.
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`9
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`  
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`37 C.F.R. §42.304(a). Under this Rule the “showing can only be made through
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`sufficient proof” advanced by Petitioner. Changes To Implement, 77 Fed. Reg. at
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`48,709. The Petition lacks the proof necessary to initiate review, because, among
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`other reasons, it fails to show that the ’702 patent is not a patent for “technological
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`inventions” under § 18(d)(1).
`
`“Covered business method patents by definition do not include patents for
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`technological inventions.” Office Patent Trial Practice Guide (“Trial Practice
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`Guide”), 77 Fed. Reg. 48,756, 48,763-64 (Aug. 14, 2012) (codified at C.F.R. tit. 37
`
`pt. 42). A patent is a “technological invention” for purposes of the AIA if “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(b) (emphasis added). The Petition argues that the
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`patent recites only known technologies, but takes an element-by-element approach
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`to the analysis rather than looking at the invention as a whole as § 42.301(b)
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`requires. Indeed, the Petition focuses on only two out of the many technological
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`components of the claim at issue. Pet. at 12-14. Petitioner may not wish away the
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`numerous other limitations present in the claims that disclose technological
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`components, as discussed below.
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`Petitioner argues that the “Challenged Claims simply relate to ways to move
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`currency electronically.” Pet. at 15. Petitioner’s argument is misplaced. While
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`10
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`moving currency electronically may not be a technological problem, doing so
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`securely surely is.
`
`The patent solves a technical problem with a technical solution. The patent
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`discloses particular technological features that allow secure transfers of monetary
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`value. The solution needed for this problem is not some abstract mental process or
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`calculation, or simply financial data handling. For example, the claims explain
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`how to combine a random number with an amount to create a data packet, encrypt
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`the data packet to create a signed certificate, and decrypt that signed certificate
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`with a second k