`
`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`APPLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2014-001061
`
`Patent 8,033,458
`
`____________
`
`PATENT OWNER’S RESPONSE TO PETITION
`
`
`1 Case CBM2014-00107 has been consolidated with the instant proceeding.
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`
`
`
`
`
`I.
`
`TABLE OF CONTENTS
`
`
`
`INTRODUCTION ........................................................................................... 1
`
`II.
`
` STATEMENT OF MATERIAL FACTS ........................................................ 3
`
`III. THE 00106 AND 00107 WECHSELBERGER DECLARATIONS
`SHOULD BE GIVEN LITTLE OR NO WEIGHT ......................................... 5
`
`IV. CLAIM CONSTRUCTION ............................................................................ 8
`
`V.
`
` OBVIOUSNESS GROUNDS AGAINST CLAIM 1 OF THE ‘458
`PATENT ........................................................................................................ 10
`
`A. Obviousness in Light of Stefik ‘235 and Stefik ‘980 .......................... 10
`
`1.
`
`2.
`
`Payment Data ............................................................................ 10
`
`SIM Portion ............................................................................... 13
`
`B.
`
`Obviousness in Light of Ginter ........................................................... 16
`
`1.
`
`2.
`
`The “SIM Portion” of Claim 1 .................................................. 16
`
` “Payment Data” of Claim 1 ..................................................... 21
`
`VI. CONCLUSION .............................................................................................. 22
`
`
`
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`I.
`
`
`
`INTRODUCTION
`
`The present proceeding is a consolidated proceeding for Cases CBM2014-
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`00106 and CBM2014-00107. The only granted ground for unpatentability raised
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`in the Petition in CBM2014-00106 (hereinafter “the 00106 Petition”) was for claim
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`1 under 35 U.S.C. § 103 over U.S. Patent No. 5,530,235 (“Stefik ‘235”) and U.S.
`
`Patent No. 5,629,980 (“Stefik ‘980”). The PTAB denied the remaining grounds.
`
`Decision at 26.
`
`The only granted ground for unpatentability raised in the Petition in
`
`CBM2014-00107 (hereinafter “the 00107 Petition”) was for claim 1 under 35
`
`U.S.C. § 103 over U.S. Patent No. 5,915,019 (“Ginter”). The PTAB denied the
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`remaining grounds. Decision at 22.
`
`In support of this Patent Owner’s Response, reference will be made to
`
`concurrently filed Exhibit 2029, Declaration of Jonathan Katz, Ph.D. (hereinafter
`
`“the Katz Declaration”). Reference will also be made herein to (1) Exhibit 1021,
`
`DECLARATION OF ANTHONY J. WECHSELBERGER IN SUPPORT OF
`
`APPLE INC.’S PETITION FOR COVERED BUSINESS METHOD PATENT
`
`REVIEW OF UNITED STATES PATENT NO. 8,033,458 PURSUANT TO 35
`
`U.S.C. § 321, 37 C.F.R. § 42.304, filed in CBM2014-00106 (hereinafter “the
`
`00106 Wechselberger Declaration”), and (2) Exhibit 1121, DECLARATION OF
`
`ANTHONY J. WECHSELBERGER IN SUPPORT OF APPLE INC.’S PETITION
`
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`- 1 -
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`FOR COVERED BUSINESS METHOD PATENT REVIEW OF UNITED
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`STATES PATENT NO. 8,033,458 PURSUANT TO 35 U.S.C. § 321, 37 C.F.R. §
`
`42.304, filed in CBM2014-00107 (hereinafter “the 00107 Wechselberger
`
`Declaration”).
`
`Reference will also be made herein to Exhibit 2025 which is a concatenation
`
`of Mr. Wechselberger’s Deposition transcript beginning on December 10, 2014
`
`and continuing to December 11, 2014. Pages 1-236 of Exhibit 2025 are for
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`December 10, 2014, the first day of his two-day deposition for the combined
`
`proceedings of CBM2014-00102, -00106, -00108 and -00112. Pages 239-403 of
`
`Exhibit 2025 are for December 11, 2014. On December 11, 2014, a conference
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`call was held with the PTAB to resolve an issue relating to testimony sought by
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`Patent Owner’s counsel, and pages 339-356 are a transcription of the conference
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`call. Because of the possibility of needing to redact a portion of the transcript in
`
`light of the conference call, transcript pages 358-378 are found on pages 364-384
`
`of Exhibit 2025, starting with their own caption pages. However, ultimately,
`
`Petitioner did not request that any part of the transcript be redacted. See Paper 20,
`
`page 2, footnote 2. The remaining portion of Mr. Wechselberger’s transcript is
`
`pages 379-396 found on pages 386-403 of Exhibit 2025. For consistency, all
`
`references to Exhibit 2025 are made with respect to the page numbers at the
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`bottom of the exhibit which are Preceded by the word “Page,” not the transcript
`
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`- 2 -
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`page numbers in the upper-right corner of the page. References herein may be
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`made in the form of (1) “nnn:xx-yy” which is intended to mean page “nnn”, lines
`
`“xx” to “yy” or (2) “mmm:xx - nnn:yy” which is intended to mean page “mmm”,
`
`line “xx” to page “nnn”, line “yy”.
`
`
`
`II.
`
`STATEMENT OF MATERIAL FACTS
`
`1.
`
`The 00106 Wechselberger Declaration does not state that Mr.
`
`Wechselberger’s opinions presented therein were based on a “preponderance of the
`
`evidence” standard.
`
`2.
`
`The 00107 Wechselberger Declaration does not state that Mr.
`
`Wechselberger’s opinions presented therein were based on a “preponderance of the
`
`evidence” standard.
`
`3.
`
`Exhibit 2007 is a document from Apple Inc. dated September 19,
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`2012 entitled In-App Purchase Programming Guide (to which its Exhibit label has
`
`been added).
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`4.
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`Exhibit 2008 is a document from Apple Inc. dated September 18,
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`2013 entitled In-App Purchase Programming Guide (to which its Exhibit label has
`
`been added).
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`5.
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`Exhibit 2013 is a document from Apple Inc. dated September 18,
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`2013 entitled Receipt Validation Programming Guide (to which its Exhibit label
`
`has been added).
`
`6.
`
`Exhibit 2014 is a press release from Apple Inc. dated February 6,
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`2013 entitled iTunes Store Sets New Record with 25 Billion Songs Sold (to which
`
`its Exhibit label has been added).
`
`7.
`
`Exhibit 2015 is a press release from Apple Inc. dated January 7, 2014
`
`entitled App Store Sales Top $10 Billion in 2013 (to which its Exhibit label has
`
`been added).
`
`8.
`
`Exhibit 2016 is a press release from Apple Inc. dated January 7, 2013
`
`entitled App Store Tops 40 Billion Downloads with Almost Half in 2012 (to which
`
`its Exhibit label has been added).
`
`9.
`
`Exhibit 2017 is a press release from Apple Inc. dated May 16, 2013
`
`entitled Apple’s App Store Marks Historic 50 Billionth Download (to which its
`
`Exhibit label has been added).
`
`10. Exhibit 2018 is a press release from Apple Inc. dated September 22,
`
`2014 entitled First Weekend iPhone Sales Top 10 Million, Set New Record (to
`
`which its Exhibit label has been added).
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`III. THE 00106 AND 00107 WECHSELBERGER DECLARATIONS
`
`SHOULD BE GIVEN LITTLE OR NO WEIGHT
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`The 00106 and 00107 Wechselberger Declarations do not disclose the
`
`underlying facts on which the opinions are based and are, therefore, entitled to
`
`little or no weight. 37 CFR 42.65 (“Expert testimony that does not disclose the
`
`underlying facts or data on which the opinion is based is entitled to little or no
`
`weight.”).
`
`More specifically, the 00106 and 00107 Wechselberger Declarations do not
`
`state the evidentiary weight standard (e.g., substantial evidence versus
`
`preponderance of the evidence) that Mr. Wechselberger used in arriving at his
`
`conclusions. Footnote 11 on page 4 of the Decision states “On this record, we are
`
`not persuaded by Patent Owner’s argument that we should disregard the
`
`Wechselberger Declaration. ... Patent Owner identifies purported omissions from
`
`the Declaration, but offers no evidence that Mr. Wechselberger used incorrect
`
`criteria, failed to consider evidence, or is not an expert in the appropriate field.”
`
`However, establishing that Mr. Wechselberger failed to state the evidentiary
`
`standard that he used, Patent Owner has shown that Mr. Wechselberger “used
`
`incorrect criteria” (i.e., the incorrect evidentiary standard) because he used none.
`
`When questioned about what evidentiary standards are and which he used,
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`Mr. Wechselberger could neither articulate what the difference was between
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`“substantial evidence” and “prepondereance of the evidence”, nor could he
`
`articulate which standard he was supposed to use when alleging invalidity of
`
`claims in a patent. Exhibit 2025, 388:13-389:6. More specifically, Mr.
`
`Wechselberger testified:
`
`388: 13
`
`Q. If I could ask you, do you have an understanding of
`
`what substantial evidence is as it relates to relative burdens of proof?
`
`MS. ROBINSON: Objection to form.
`
`A. I don't think that I have used that term in any of my reports
`
`or declarations in conjunction with this case.
`
`Q. Do you have an understanding of what the standard
`
`"preponderance of the evidence" is?
`
`MS. ROBINSON: Objection to form.
`
`A. I don't think I've used that in any of my reports or
`
`declarations.
`
`BY MR. CASEY:
`
`389:2
`
`Q. Do you have an understanding as to what the standard
`
`called "clear and convincing evidence" is?
`
`MS. ROBINSON: Objection to form.
`
`A. Well, I understand these are all legal terms, and to the extent
`
`that I need to have a firm grip on their legal meaning, that is -- always
`
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`ends up in one of my expert reports or a declaration. And, again, I
`
`don't know if that term has been so written out in any of my written
`
`materials.
`
`Q. Do you have an understanding that one has to show
`
`invalidity of a patent based on the legal standard of substantial
`
`evidence?
`
`MS. ROBINSON: Objection to form.
`
`A. Well, since I have just testified that I don't recall if the term
`
`"substantial evidence" appears in any of my reports, then I wouldn't
`
`have an understanding here today without having my report where
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`that is explained.
`
`Q. So then it's also fair to say you don't have an understanding
`
`as to whether or not one has to show invalidity of a patent based on
`
`preponderance of the evidence?
`
`MS. ROBINSON: Objection to form.
`
`390:2
`
`A. Again, without the guidance of my report where that's
`
`been written out, I can look at it and read it, I'm not going to pretend
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`that from a legal standpoint I have a firm grasp on all the four corners
`
`of the implications of those statements.
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`No standard of evidence is disclosed in the 00106 and 00107 Wechselberger
`
`Declarations for the amount of evidence that he used in arriving at his allegations
`
`of unpatentability. Thus, based on the fact that Mr. Wechselberger testified that he
`
`did not know the difference between the standards or what standard to use, the
`
`PTAB can only afford little or no weight to the testimony therein. To do otherwise
`
`would be to accept his opinions without knowing “the underlying facts ... on which
`
`the opinion is based” (i.e., how much evidence he thinks shows any of his opinions
`
`discussed therein).
`
`For example, when Mr. Wechselberger opines that he believes a statement to
`
`be true (e.g., there is a motivation to modify a reference), is that belief based on
`
`less than a preponderance of the evidence, or more? Without his having disclosed
`
`what level of evidence he used, and given that he didn’t even know what level he
`
`was supposed to be using, the PTAB cannot rely on his statements. Thus, the
`
`PTAB should find that his declaration is entitled to little or no weight.
`
`
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`IV. CLAIM CONSTRUCTION
`
`Petitioner has alleged that “payment data” should be construed to mean
`
`“data representing payment made for requested content data” and is distinct from
`
`“access control data.” See, for example, 00107 Petition at 24. However, as Dr.
`
`Katz agrees, “payment data” in the context of the ‘458 patent should be interpreted
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`to mean “data that can be used to make payment for content” when using a
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`broadest reasonable interpretation.2 Exhibit 2029, ¶ 11.
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`The ‘458 patent, col. 20, lines 59-62, states “payment data for making a
`
`payment … is received from the smart Flash card by the content access terminal
`
`and forwarded to an e-payment system.” That is, the payment data is used for
`
`making a payment. Furthermore, as can be seen in Figure 12c of the ‘458 patent,
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`step S54 reads “PAYMENT FOR SCHEME OWNER RECEIVED FROM CARD
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`BY CONTENT ACCESS TERMINAL AND FORWARDED TO e-PAYMENT
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`SYSTEM.” Step S55 then reads “PAYMENT RECORD DATA RECEIVED
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`FROM e-PAYMENT SYSTEM BY CONTENT ACCESS TERMINAL AND
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`FORWARDED TO CARD.” Both of those steps precede step S56 which recites
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`“PAYMENT RECORD DATA, PURCHASE REQUEST AND CARD
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`REGISTRATION DATA TRANSMITTED TO SCHEME OWNER.” Thus,
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`2 Patent Owner’s use of the “broadest reasonable interpretation” (BRI)
`
`standard herein is not an admission that the BRI standard is the proper standard for
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`CBM proceedings such as this one. However, for the purposes of this proceeding
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`based on the issues in the instituted proceeding, Patent Owner has presented its
`
`arguments utilizing the BRI standard with respect to “payment data.” Patent
`
`Owner reserves its right to argue for a different standard at a later date or in a
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`different proceeding.
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`“payment data” is not “data representing payment made for requested content
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`data,” as payment has not yet been made when the payment data of step S54 is
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`sent. Therefore, Petitioner’s requested claim construction for “payment data”
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`should not be adopted, and “payment data” should be interpreted to mean “data
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`that can be used to make payment for content.” Exhibit 2029, ¶ 12.
`
`
`
`V. OBVIOUSNESS GROUNDS AGAINST CLAIM 1 OF THE ‘458 PATENT
`
`
`
`A. Obviousness in Light of Stefik ‘235 and Stefik ‘980
`
`The Decision held “Petitioner contends that claims 1, 6–8, 10, and 11 would
`
`have been obvious over Stefik ’235 and Stefik ’980. ... We find Petitioner’s
`
`contentions regarding claim 1 persuasive, but are not persuaded by Petitioner’s
`
`contentions regarding claims 6–8, 10, and 11.” Decision at 15. For the reasons set
`
`forth below, the 00106 Petition has not shown that it is more likely than not that
`
`the combination of Stefik ‘235 and Stefik ‘980 renders obvious claim 1.
`
`
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`
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`1.
`
`Payment Data
`
`Claim 1 recites “A portable data carrier, comprising: ... a program store
`
`storing code implementable by a processor; ... wherein the code comprises code to
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`output payment data from the payment data memory to the interface and code to
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`provide external access to the data memory.” The 00106 Petition has not shown
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`- 10 -
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`that such a limitation is taught by Stefik ‘235 or Stefik ‘980. As described above,
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`Petitioner has requested an incorrect construction of the claim term “payment
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`data,” so the 00106 Petition is deficient on that basis alone.
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`Further, as cited throughout the 00106 Petition, Stefik ‘235 and Stefik ‘980
`
`both refer to “credit servers” such that they are not dealing with payments prior to
`
`usage. For example, page 44 of the Petition cites Stefik ‘980 as disclosing “The
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`credit server 301 is a device which accumulates billing information for the
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`repository 201. The credit server 301 communicates with the repository 201 via
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`billing transactions 302 to record billing transactions. Billing transactions are
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`reported to a billing clearinghouse 303 by the credit server 301 on a periodic
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`basis.” Exhibit 1014, 8:11-20. That is, the billing transactions are post-usage.
`
`Page 44 also cites Stefik ‘235 as disclosing “A Login transaction is the
`
`process by which a user logs onto a repository, typically by entering a Personal
`
`Identification Number (PIN). In this case, the user of the DocuCard is logging onto
`
`the DocuCard. This logging in process may also activate credit accounts.” Exhibit
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`1013, 6:60-65. The 00106 Petition does not disclose what those accounts are, but
`
`if they are for “credits,” that again shows post-usage processing. The disclosure of
`
`“the acceptance of fees by the repository may be a prerequisite to the continuation
`
`of the process” is no different. Not only are the specifics of such an “acceptance”
`
`undisclosed, but the “acceptance” occurs before a single document has even been
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`- 11 -
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`selected. As shown in Fig. 3, step 303, which relates to the assignment of fees, is
`
`done before a user even decides what function to select or what document to select.
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`Thus, “the acceptance of fees” does not relate to the claimed “payment data.”
`
`Page 45 of the 00106 Petition further cites Stefik ‘980 as disclosing “In
`
`another embodiment, the credit server acts as a ‘debit card’ where transactions
`
`occur in ‘real-time’ against a user account.” Exhibit 1014, 17:20-44. However,
`
`the cited portion is not discussing “real-time” transactions between the repository
`
`and the credit server, it is discussing transactions between the credit server and the
`
`clearinghouse. In fact, to distort the Stefik ‘980 teaching, the Petition omits the
`
`connecting sentences between the two cited sentences to create the misimpression
`
`that they are directly linked. Page 45 states “The billing clearinghouse manages
`
`the financial transactions as they occur… In another embodiment, the credit server
`
`acts as a ‘debit card’ where transactions occur in ‘real-time’ against a user
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`account.” However, the original states:
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`The billing clearinghouse manages the financial transactions as they
`
`occur. As a result, bills may be generated and accounts reconciled.
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`Preferably, the credit server would store the fee transactions and
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`periodically communicate via a network with billing clearinghouse
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`for reconciliation. In such an embodiment, communications with the
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`billing clearinghouse would be encrypted for integrity and security
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`reasons. In another embodiment, the credit server acts as a "debit
`
`card" where transactions occur in "real-time" against a user account.
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`Thus, the “debit card” embodiment is for transactions between the credit
`
`server and the clearinghouse, and Stefik ‘980 is still discussing post-usage
`
`processing.
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`
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`2.
`
`SIM Portion
`
`Claim 1 further recites “A portable data carrier, comprising: ... a subscriber
`
`identity module (SIM) portion to identify a subscriber to a network operator.” At
`
`page 16, the Decision held:
`
`With respect to the claimed SIM portion, Petitioner contends
`
`that one skilled in the art “would have been motivated and found it
`
`obvious to employ a memory card for a mobile or cellular device that
`
`included a SIM portion that identifies a subscriber to a network
`
`operator, such as a mobile phone, as a repository in Stefik’s content
`
`distribution and access network.” … Mr. Wechselberger’s testimony
`
`supports this contention. … As Petitioner points out, Stefik ‘235
`
`explains that each repository has an identifier such as “a unique
`
`number assigned to the DocuCard upon manufacture.” … We are
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`persuaded, for purposes of this decision, that one skilled in the art
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`- 13 -
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`would have found it obvious to use a SIM portion as the identifier in
`
`Stefik ‘235.
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`However, the 00106 Petition has not shown that it is more likely than not that one
`
`of ordinary skill in the art would “have been motivated and found it obvious to
`
`employ a memory card for a mobile or cellular device that included a SIM portion
`
`that identifies a subscriber to a network operator, such as a mobile phone, as a
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`repository in Stefik’s content distribution and access network.” Exhibit 2029, ¶ 15.
`
`Neither the 00106 Petition nor Mr. Wechselberger’s declaration explains
`
`why one of ordinary skill in the art, looking at Stefik ‘235 and Stefik ‘980, would
`
`have been motivated to “employ a memory card for a mobile or cellular device that
`
`included a SIM portion that identifies a subscriber to a network operator.” Neither
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`patent identifies anything that indicates that a DocuCard or a repository could be a
`
`mobile or cellular phone in which such a memory card would be used. Exhibit
`
`2029, ¶ 16.
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`Given that there is no disclosure of using a mobile or cellular phone as the
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`repository or DocuCard of Stefik ‘235 or Stefik ‘980, there is no reason to change
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`from the “unique number assigned to the DocuCard upon manufacture” to some
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`other identifying information. Neither the 00106 Petition nor Mr. Wechselberger’s
`
`declaration cited therein addresses why such a change would be necessary. They
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`also do not disclose whether the “unique number assigned to the DocuCard upon
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`- 14 -
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`manufacture” has characteristics that would make it compatible with the SIM
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`portion of a mobile phone, for example, whether the number of bits required by the
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`“unique number assigned to the DocuCard upon manufacture” is greater than the
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`number of bits that a SIM portion would utilize to identify a subscriber to a
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`network operator. Exhibit 2029, ¶ 17. Thus, the 00106 Petition does not show that
`
`it is more likely than not that one skilled in the art would have found it obvious to
`
`use a SIM portion that identifies a subscriber to a network operator as the “unique
`
`number assigned to the DocuCard upon manufacture” in Stefik ‘235. Exhibit
`
`2029, ¶ 17.
`
`Further, the 00106 Petition has not shown that one of ordinary skill in the art
`
`“would have been motivated and found it obvious to employ a memory card for a
`
`mobile or cellular device that included a SIM portion … as a repository in Stefik’s
`
`content distribution and access network,” since the structure and function of the
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`alleged memory card has not been disclosed by the 00106 Petition as meeting the
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`requirements of a repository according to Stefik ‘235 and Stefik ‘980. For
`
`example, there is no discussion in the 00106 Petition that shows that the alleged
`
`memory card for a mobile or cellular device that included a SIM portion would be
`
`able to perform the registration process described with respect to Figure 3 of Stefik
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`‘235. Exhibit 2029, ¶ 18. Col. 6, lines 47-56, discloses:
`
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`- 15 -
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`Referring to FIG. 3, the DocuCard and repository initiate
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`registration transactions, step 301. Registration is a process by which
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`two repositories establish a secure and trusted session. By secure and
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`trusted it is meant that the session is reasonably safe from intrusion
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`and that the respective repositories have established themselves as
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`bona fide (i.e. not an intruder). The registration process is automatic
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`and is triggered by the establishment of the electrical connection
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`between the DocuCard and repository.
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`If the alleged memory card cannot act as a repository, this further indicates that
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`there is no motivation to employ a mobile or cellular device that included a SIM
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`portion as a repository in Stefik’s content distribution and access network. Exhibit
`
`2029, ¶ 19.
`
`Thus, the 00106 Petition has not shown that it is more likely than not that
`
`Stefik ‘235 and Stefik ‘980, either alone or in combination, render claim 1 of the
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`‘458 patent obvious. Exhibit 2029, ¶ 20.
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`
`
`B. Obviousness in Light of Ginter
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`
`
`1.
`
`The “SIM Portion” of Claim 1
`
`Claim 1 recites “A portable data carrier, comprising: ... a subscriber identity
`
`module (SIM) portion to identify a subscriber to a network operator.” Just as the
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`- 16 -
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`SIM portion limitation is not rendered obvious by Stefik ‘235 and Stefik ‘980, it is
`
`also not rendered obvious by Ginter. At page 22 the Decision held:
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`With respect to the claimed SIM portion, Petitioner contends
`
`that one skilled in the art “would have considered it at minimum
`
`obvious for the portable data carrier (e.g. electronic appliance) to
`
`communicate with Ginter’s network using a cellular connection and
`
`therefore to include a subscriber identity module (SIM) portion,” and
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`that for similar reasons, it also would have been obvious to include a
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`SIM portion in Ginter’s PEA. … Mr. Wechselberger’s testimony
`
`supports this contention. … As Petitioner points out, Ginter explains
`
`that “[p]ortable appliance 2600 RAM 534 may contain, for example,
`
`information which can be used to uniquely identify each instance of
`
`the portable appliance.” … We are persuaded, for purposes of this
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`decision, that one skilled in the art would have found it obvious to use
`
`a SIM portion as the identifier in Ginter’s PEA.
`
`The 00107 Petition, however, does not show that it is more likely than not that one
`
`of ordinary skill in the art would have considered it obvious for the portable data
`
`carrier (e.g. electronic appliance) to communicate with Ginter’s network using a
`
`cellular connection, or to include a subscriber identity module (SIM) portion.
`
`Exhibit 2029, ¶ 22. Likewise, the 00107 Petition does not show that it is more
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`- 17 -
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`likely than not that one of ordinary skill in the art would have considered it obvious
`
`to include a SIM portion in Ginter’s PEA. Exhibit 2029, ¶ 22.
`
`In support of its obviousness allegation, the 00107 Petition cites col. 161,
`
`lines 5-11, which states that communications with a clearinghouse “may be
`
`initiated across the electronic highway 108, or across other communications
`
`networks such as a LAN, WAN, two-way cable or using portable media exchange
`
`between electronic appliances.” However, the citation of wired networks for
`
`transmission in the environment of Ginter is not sufficient to show that
`
`communications with Ginter’s network using cellular communications is obvious,
`
`especially in light of the fact that Ginter repeatedly stresses the importance of
`
`secure communications and physical-security mechanisms. See Ginter, col. 63,
`
`lines 42-67. Exhibit 2029, ¶ 23.
`
`The transmission of information using wired transmissions is more secure
`
`against eavesdropping than wireless transmissions, a point that is ignored by the
`
`00107 Petition. Given that Ginter limited its disclosure in col. 161, lines 5-11, to
`
`wired transmissions, the 00107 Petition does not show that it is more likely than
`
`not that one of ordinary skill in the art would have believed that cellular
`
`transmissions were obvious. Exhibit 2029, ¶ 23.
`
`Page 59 of the 00107 Petition also cites to col. 233, lines 53-57, which states
`
`“The portable device auxiliary terminal might be ‘on-line,’ that is electronically
`
`
`
`- 18 -
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`
`
`communicating back to a commercial establishment and/or third party information
`
`collection point through the use of cellular, satellite, radio frequency, or other
`
`communications means.” However, such a discussion is not describing cellular
`
`communication by the electronic appliance or PEA, but rather communication by
`
`an “auxiliary terminal” to see if the appliance is trustworthy. Exhibit 2029, ¶ 24.
`
`Ginter states, in the paragraph crossing cols. 233 and 234:
`
`The auxiliary terminal might, after a check by a commercial
`
`party in response to receipt of certain identification information at the
`
`collection point, communicate back to the auxiliary terminal whether
`
`or not to accept the portable appliance 2600 based on other
`
`information, such as a bad credit record or a stolen portable appliance
`
`2600. Such a portable auxiliary terminal would also be very useful at
`
`other commercial establishments, for example at gasoline stations,
`
`rental car return areas, street and stadium vendors, bars, and other
`
`commercial establishments where efficiency would be optimized by
`
`allowing clerks and other personnel to consummate transactions at
`
`points other than traditional cash register locations.
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`Further, as even admitted on page 59 of the 00107 Petition, Ginter 229:13-
`
`18 already discloses that “[p]ortable appliance 2600 RAM 534 may contain, for
`
`example, information which can be used to uniquely identify each instance of the
`
`
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`- 19 -
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`portable appliance.” Thus, there is no reason to change from the “information
`
`which can be used to uniquely identify each instance of the portable appliance” to
`
`some other identifying information. Exhibit 2029, ¶ 25. Neither the 00107
`
`Petition nor Mr. Wechselberger’s declaration cited therein addresses why such a
`
`change would be necessary. They also do not disclose whether the “information
`
`which can be used to uniquely identify each instance of the portable appliance” has
`
`characteristics that would make it compatible with the SIM portion of a mobile
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`phone, for example, whether the number of bits required by the “information
`
`which can be used to uniquely identify each instance of the portable appliance” is
`
`greater than the number of bits that a SIM portion would utilize to identify a
`
`subscriber to a network operator. Exhibit 2029, ¶ 25. The length of this
`
`information can directly affect the security of the system, as Ginter discloses that
`
`the “information may be employed (e.g. as at least a portion of key or password
`
`information) in authentication, verification, decryption, and/or encryption
`
`processes.” Col. 229, lines 14-17. Thus, the 00107 Petition does not show that it
`
`is more likely than not that one skilled in the art would have found it obvious to
`
`use a SIM portion as the identifier in Ginter. Exhibit 2029, ¶ 25.
`
`
`
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`- 20 -
`
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`
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`2.
`
` “Payment Data” of Claim 1
`
`Claim 1 further recites “wherein the code comprises code to output payment
`
`data from the payment data memory to the interface and code to provide external
`
`access to the data memory.” As discussed above, the 00107 Petition has sought an
`
`interpretation of “payment data” that is inconsistent with the specification and
`
`should, therefore, not be adopted, so the 00107 Petition is deficient on that basis
`
`alone.
`
`Moreover, with respect to the “code to output payment data” limitation,
`
`pages 62-63 of the 00107 Petition cite “audit information” as corresponding to the
`
`claimed payment data. Exhibit 2029, ¶ 26. However, in the context of Ginter, the
`
`audit information is for tracking post-usage information, not current purchase
`
`information. As discussed in the paragraph crossing cols. 161 and 162, “the
`
`clearinghouse may analyze the contained audit information to determine whether it
`
`indicates misuse of the applicable VDE object 300,” which indicates the tracked
`
`usage has already occurred. Thus, the 00107 Petition has not shown that such
`
`post-usage information to determine whether an applicable VDE object 300 is
`
`being misused corresponds to “payment data” as claimed. Exhibit 2029, ¶ 27.
`
`Also, to change from post-usage tracking to pre-purchase processing would change
`
`the principle upon which Ginter works, which is an indication of non-obviousness.
`
`Exhibit 2029, ¶ 27. See In re Ratti, 270 F.2d 810, 813 (CCPA 1959).
`
`
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`- 21 -
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`
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`Thus, the 00107 Petition has not shown that it is more likely than not that
`
`Ginter renders claim 1 of the ‘458 patent obvious. Exhibit 2029, ¶ 28.
`
`
`
`VI. CONCLUSION
`
`
`
`Thus, claim 1 of the ‘458 patent should be found to be VALID.
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`4300 Wilson Blvd, Suite 700
`Arlington, VA 22203
`Telephone: (703) 894-6406
`Fax: (703) 894-6430
`Email: mcasey@dbjg.com
`
`
`
`
`Dated: February 27, 2015
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`- 22 -
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`
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`CERTIFICATE OF SERVICE
`
`
`The undersigned hereby certifies that this PATENT OWNER’S RESPONSE
`
`TO PETITION (including Exhibit List and Exhibits 2006, 2007, 2008, 2013, 2014,
`
`2015, 2016, 2017, 2018, 2019, 2020, 2021, 2025, 2026, 2027, 2029, and 2035) in
`
`CBM2014-00106 was served, by agreement of the parties, February 27, 2015 by
`
`emailing copies to counsel for the Petitioner as follows:
`
`Steven.Baughman@ropesgray.com
`Ching-Lee.Fukuda@ropesgray.com
`ApplePTABService-SmartFlash@ropesgray.com
`
`
`
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`4300 Wilson Blvd, Suite 700
`Arlington, VA 22203
`Telephone: (703) 894-6406
`Fax: (703) 894-6430
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`Dated: February 27, 2015
`
`
`
`
`
`- 23 -
`
`
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