IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`AMERICAN EXPRESS COMPANY, AMERICAN EXPRESS TRAVEL
`RELATED SERVICES COMPANY, INC., COMPASS BANK, DISCOVER
`FINANCIAL SERVICES, DISCOVER BANK, DISCOVER PRODUCTS
`INC., NAVY FEDERAL CREDIT UNION, AND STATE FARM MUTUAL
`AUTOMOBILE INSURANCE COMPANY
`Petitioner,
`v.
`
`
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner.
`
`Case No. To Be Assigned
`Patent No. 5,940,510
`
`
`
`
`
`
`
`
`
`
`
`
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW
`UNDER 35 U.S.C. §§ 321-329 AND § 18 OF THE LEAHY-SMITH
`AMERICA INVENTS ACT
`
`

`
`Docket No. 1202549-0003
`
`
`
`TABLE OF CONTENTS
`
`TABLE OF CONTENTS .......................................................................................... ii
`TABLE OF AUTHORITIES .................................................................................... iv
`LIST OF EXHIBITS ............................................................................................... vii
`II. MANDATORY NOTICES (37 C.F.R. § 42.8(a)(1)) ......................................... 1
`A.
`Real Party-In-Interest (37 C.F.R. § 42.8(b)(1)) ........................................ 1
`B.
`Related Matters (37 C.F.R. § 42.8(b)(2)) .................................................. 1
`C.
`Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3)) and Service
`Information (37 C.F.R. § 42.8(b)(4)) ....................................................... 4
`FEES (37 C.F.R. § 42.203) ................................................................................ 4
`INTRODUCTION TO THE ’510 PATENT .................................................. 5
`A.
` Overview of the ’510 Patent ................................................................... 5
`Prosecution History Summary of the ’510 Patent ................................... 9
`B.
`
`REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. § 42.304 ........ 10
`A. Grounds for Standing (37 C.F.R. § 42.304(a)) ....................................... 10
`1.
`Eligibility Requirements of 37 C.F.R. § 42.302 ........................... 11
`2.
`Timing Requirements of 37 C.F.R. § 42.303 ............................... 11
`3.
`The ’510 Patent is a Covered Business Method Patent ............... 11
`a)
`The Challenged Claims Are Directed to a “Financial
`Product or Service” .......................................................... 12
`The Challenged Claims Are Not Directed to a
`“Technological Invention” ............................................... 15
`1)
`The Patent Does Not Recite a Technological Feature
`That is Novel and Unobvious ................................ 16
`The Patent Does Not Solve a Technical Problem
`Using a Technical Solution .................................... 19
`Citation of Prior Art ............................................................................. 21
`Claims and Statutory Grounds (37 C.F.R. §§ 42.304(b)(1) & (b)(2)) ...... 22
`
`B.
`C.
`
`-ii-
`
`III.
`IV.
`
`V.
`
`b)
`
`2)
`
`

`
`Docket No. 1202549-0003
`
`D.
`Claim Construction (37 C.F.R. § 42.304(b)(3)) ...................................... 22
`E.
`Person of Ordinary Skill in the Art ....................................................... 24
`F.
`Unpatentability of the Construed Claims (37 C.F.R. § 42.304(b)(4)) .... 24
`G.
`Supporting Evidence (37 C.F.R. § 42.304(b)(5)) ................................... 25
`VI. AT LEAST ONE CLAIM OF THE ’510 PATENT IS
`UNPATENTABLE .................................................................................................. 25
`A.
`Prior Art ............................................................................................... 25
`
`1.
`Cremin (Ex. 1003) ...................................................................... 26
`2.
`Hawkes (Ex. 1004) ..................................................................... 29
`3.
`Lee (Ex. 1008) ............................................................................ 31
`4.
`Rivest (Ex. 1005) ........................................................................ 31
` Grounds I and II: Combination of Cremin and Hawkes Renders
`Obvious Claims 1, 2, and 3 Under 35 U.S.C. § 103 ............................... 33
`1.
`Ground I Claim Chart: Cremin and Hawkes Render Obvious
`Claims 1, 2, and 3 Under 35 U.S.C. § 103 ................................... 41
`Ground II Claim Chart: Hawkes and Cremin Render
`Obvious Claims 1, 2, and 3 Under 35 U.S.C. § 103 .................... 53
` Ground III: Cremin, Hawkes, and Lee Render Obvious Claim 4
`Under 35 U.S.C. § 103 .......................................................................... 70
` Ground IV: Cremin, Hawkes, and Rivest Render Obvious Claims 5
`and 6 Under 35 U.S.C. § 103 ................................................................ 73
`VII. CONCLUSION ............................................................................................. 79
`CERTIFICATE OF SERVICE ................................................................................ 81
`
`B.
`
`2.
`
`C.
`
`D.
`
`-iii-
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`

`
`Docket No. 1202549-0003
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Agilysys, Inc. v. Ameranth, Inc.,
`CBM2014-14, Paper No. 19 ................................................................. 13, 14, 16, 20
`Apple Inc. v. SightSound Techs.,
`CBM2013-20 .................................................................................................... 13, 17
`CRS Advanced Techs., Inc. v. Frontline Techs., Inc.,
`CBM2012-5, Paper No. 17 ................................................................... 12, 13, 16, 17
`Gillman v. Stoneeagle Service, Inc.,
`CBM2013-47, Paper No. 11 ................................................................................... 13
`Google, Inc. v. Inventor Holdings, LLC,
`CBM2014-2, Paper No. 16 ..................................................................................... 12
`In re Cuozzo Speed Techs., LLC,
`No. 2014-1301, 2015 WL 448667 (Fed. Cir. Feb. 4, 2015) ................................ 22, 23
`In re Translogic Tech., Inc.,
`504 F.3d 1249 (Fed. Cir. 2007) ............................................................................... 22
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.,
`CBM2012-3, Paper No. 15 .................................................................................................. 20
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ............................................................... 23
`PNC Fin. Servs. Grp., Inc. v. Intellectual Ventures I LLC,
`CBM2014-32, Paper No. 13 ................................................................................... 15
`SAP Am., Inc. v. Versata Dev. Grp., Inc.,
`CBM2012-1, Paper No. 36 ..................................................................................... 12
`Volusion, Inc., v. Versata Software, Inc.,
`CBM2013-18, Paper No. 8 ..................................................................................... 12
`
`-iv-
`
`

`
`Docket No. 1202549-0003
`
`STATUTES
`
`35 U.S.C. § 102(b) ................................................................................................ passim
`
`35 U.S.C. § 103 ..................................................................................................... passim
`
`35 U.S.C. § 321(c) ....................................................................................................... 11
`
`35 U.S.C. § 324(a) ........................................................................................................ 25
`
`35 U.S.C. § 325(a)(1) .................................................................................................. 10
`
`35 U.S.C. § 325(e)(1). ................................................................................................... 10
`
`35 U.S.C. § 328(a). ....................................................................................................... 10
`
`AIA 18(d)(1) ................................................................................................................ 11
`
`OTHER AUTHORITIES
`
`37 C.F.R. § 42.8(a)(1) ..................................................................................................... 1
`
`37 C.F.R. § 42.8(b)(1) .................................................................................................... 1
`
`37 C.F.R. § 42.8(b)(2) .................................................................................................... 1
`
`37 C.F.R. § 42.8(b)(3) .................................................................................................... 3
`
`37 C.F.R. § 42.8(b)(4) .................................................................................................... 3
`
`37 C.F.R. § 42.15(b)....................................................................................................... 4
`
`37 C.F.R. § 42.203 ......................................................................................................... 4
`
`37 C.F.R. § 42.300(b) ................................................................................................... 22
`
`37 C.F.R. § 42.301(a). .................................................................................................. 11
`
`37 C.F.R. § 42.301(b). ............................................................................................ 16, 20
`
`37 C.F.R. § 42.302 ................................................................................................. 10, 11
`
`-v-
`
`

`
`Docket No. 1202549-0003
`
`37 C.F.R. § 42.303 ....................................................................................................... 11
`
`37 C.F.R. § 42.304 ....................................................................................................... 10
`
`37 C.F.R. § 42.304(a) .................................................................................................. 10
`
`37 C.F.R. § 42.304(b)(1) .............................................................................................. 22
`
`37 C.F.R. § 42.304(b)(2) ............................................................................................................ 22
`
`37 C.F.R. § 42.304(b)(3) .............................................................................................. 22
`
`37 C.F.R. § 42.304(b)(4) .............................................................................................. 24
`
`37 C.F.R. § 42.304(b)(5) .............................................................................................. 25
`
`77 Fed. Reg. 48756, 48764 (Aug. 14, 2012) .................................................................. 17
`
`77 Fed. Reg. 48698-99 ................................................................................................. 23
`
`-vi-
`
`

`
`Docket No. 1202549-0003
`
`Exhibit
`Ex. 1001
`Ex. 1002
`Ex. 1003
`Ex. 1004
`
`Ex. 1005
`
`Ex. 1006
`
`Ex. 1007
`
`Ex. 1008
`Ex. 1009
`
`Ex. 1010
`
`Ex. 1011
`
`Ex. 1012
`
`LIST OF EXHIBITS
`
`Description
`U.S. Patent No. 5,940,510
`File History for U.S. Patent No. 5,940,510
`Int’l Pub. No. WO 83/03018 to P.V. Cremin et al. (“Cremin”)
`INTEGRATED CIRCUIT CARDS, TAGS AND TOKENS (P.L.
`Hawkes et al. eds., 1990) (collectively, the “Hawkes Chapters”):
`• P.L. Hawkes, Preface (“Hawkes Preface”);
`• Introduction to Integrated Circuit Cards, Tags and Tokens for
`Automatic Identification (“Hawkes Ch. 1”);
`• W.L. Price & B.J. Chorley, Secure Transactions with an
`Intelligent Token (“Hawkes Ch. 6”); and
`• D.W. Davies, Cryptography and the Smart Card (“Hawkes
`Ch. 8”)
`Rivest, et al., A Method for Obtaining Digital Signatures and
`Public-Key Cryptosystems, 21 COMMUNICATIONS OF THE ACM,
`2, 120 (1978) (“Rivest”)
`Petition for CBM Review of US5940510, JPMorgan Chase & Co. and
`JP Morgan Chase Bank, N.A., v. Maxim Integrated Products, Inc., CBM
`2014-179, Paper No. 1, August 21, 2014.
`Decision Institution, JPMorgan Chase & Co. and JP Morgan Chase
`Bank, N.A., v. Maxim Integrated Products, Inc., CBM 2014-179, Paper
`No. 11, February 20, 2015
`U.S. Patent No. 5,210,846 to R.D. Lee (“Lee”)
`Texas Instruments, TMS7000 Family Microarchitecture, User’s Guide,
`November 1982
`Special Master’s Report and Recommendation re Claim
`Construction, In re Maxim Integrated Products, Inc., Patent Litigation,
`No. 2:12-mc-00244-JFC (W.D. Pa.), Docket #691, (10/09/2013)
`(“R&R”)
`Corrective Entry to Special Master’s Report and Recommendation
`re Claim Construction, In re Maxim Integrated Products, Inc., Patent
`Litigation, No. 2:12-mc-00244-JFC (W.D. Pa.), Docket #693,
`(10/15/2013) (“R&R Correction”)
`Memorandum Opinion re Special Master’s Report and
`Recommendation re Claim Construction, In re Maxim Integrated
`Products, Inc., Patent Litigation, No. 2:12-mc-00244-JFC (W.D. Pa.),
`Docket #742, (12/17/2013) (“CC Op.”)
`
`-vii-
`
`

`
`Docket No. 1202549-0003
`
`Ex. 1013
`
`Ex. 1014
`
`Ex. 1015
`
`Ex. 1016
`Ex. 1017
`Ex. 1018
`
`Complaint in Maxim Integrated Prods., Inc. v. American Express Company
`and American Express Travel Related Services Company, Inc., No. 5:14-cv-
`1027-XR (W.D. Tx.), Docket #1 (11/19/14)
`Martin Marshall, Motorola Unveils Details of 68040, INFOWORLD,
`April 3, 1989 at 105.
`Erik Sandberg-Diment, The Executive Computer; How To
`Improve A PC’s Math Skills, THE NEW YORK TIMES, January 19,
`1986.
`Declaration of Peter Alexander (“Alexander Decl.”)
`Curriculum Vitae of Peter Alexander
`Declaration of Stephen Bristow (“Bristow Decl.”), which was
`exhibit 1017 in the proceeding, JPMorgan Chase & Co. and JP Morgan
`Chase Bank, N.A., v. Maxim Integrated Products, Inc., CBM 2014-179
`(filed August 21, 2014)
`
`-viii-
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`

`
`Docket No. 1202549-0003
`
`I.
`
`MANDATORY NOTICES (37 C.F.R. § 42.8(a)(1))
`
`A.
`
`Real Party-In-Interest (37 C.F.R. § 42.8(b)(1))
`
`The real parties in interest for this petition for Covered Business Method
`
`patent (“CBM”) review are American Express Company, American Express Travel
`
`Related Services Company, Inc., Compass Bank, Discover Financial Services,
`
`Discover Bank, Discover Products Inc., Navy Credit Federal Credit Union, and
`
`State Farm Mutual Automobile Insurance Company (collectively, “Petitioner”).
`
`B.
`
`Related Matters (37 C.F.R. § 42.8(b)(2))
`
`U.S. Patent No. 5,940,510 (Ex. 1001) (hereinafter, “the ’510 Patent”), owned
`
`by Maxim Integrated Products, Inc. (“Maxim”), is currently asserted against
`
`multiple defendants in the Western District of Texas (collectively, “WD Tx
`
`Litigations”):
`
`• Maxim v. American Express Company and American Express Travel Related
`Services, Inc., No. 5:14-cv-1027-XR (W.D. Tx.)
`• Maxim v. Compass Bank d/b/a BBVA Compass, No. 5:14-cv-1028-XR
`(W.D. Tx.)
`• Maxim v. Discover Financial Services, No. 5:14-cv-1029-XR (W.D. Tx.)
`• Maxim v. State Farm Mutual Automobile Insurance Company, No. 5:14-cv-
`1030-XR (W.D. Tx.)
`• Maxim v. USAA Federal Savings Bank, No. 5:14-cv-1031-XR (W.D. Tx.)
`• Maxim v. Navy Federal Credit Union, No. 5:14-cv-1032-XR (W.D. Tx.)
`
`The ’510 Patent has also been asserted in cases consolidated into multidistrict
`
`-1-
`
`

`
`Docket No. 1202549-0003
`
`litigation as In re: Maxim Integrated Prods., Inc. MDL No. 2354, Misc. No. 12-244-JFC
`
`(W.D. Pa.) (“MDL Litigation”). Claims of the ’510 patent were construed by the
`
`district court in the MDL Litigation. A special master issued a claim construction
`
`report and recommendation (Ex. 1010) (hereinafter “R&R”) and a correction to
`
`that report (Ex. 1011) (hereinafter “R&R Correction”), which the district court
`
`adopted in part and overruled in part in a claim construction opinion (Ex. 1012)
`
`(hereinafter ““CC Op.”). As of the filing date of this Petition, all but one of the
`
`MDL cases (Branch Banking & Trust Co. v. Maxim) has been terminated as indicated
`
`below:
`
`Active (W.D. Pa.)
`• Branch Banking & Trust Co. v. Maxim, No. 2:12-cv-945-JFC
`
`Terminated (W.D. Pa.)
`• PNC Fin. Servs. Grp., Inc. v. Maxim, No. 2:12-cv-89-JFC
`• KeyCorp v. Maxim, No. 2:12-cv-860-JFC
`• Vanguard Grp., Inc. v. Maxim, No. 2:12-cv-862-JFC
`• Jack Henry & Assocs., Inc. v. Maxim, No. 2:12-cv-863- JFC
`• Maxim v. Comerica Inc., No. 2:12-cv-869-JFC
`• Fidelity Brokerage Servs. LLC v. Maxim, No. 2:12-cv-871-JFC
`• Maxim v. First United Bank & Trust Co., No. 2:12-cv-876-JFC
`• Maxim v. Starbucks Corp., No. 2:12-cv-877-JFC
`• Maxim v. Expedia, Inc., No. 2:12-cv-878-JFC
`• Maxim v. Capital One Fin. Corp., No. 2:12-cv-879- JFC
`• Maxim v. Bank of the West, No. 2:12-cv-880-JFC
`
`-2-
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`

`
`Docket No. 1202549-0003
`
`• Maxim v. Groupon, Inc., No. 2:12-cv-881-JFC
`• Maxim v. Union Bank, N.A., No. 2:12-cv-882-JFC
`• Maxim v. Southwest Airlines, Co., No. 2:12-cv-883- JFC
`• Chipotle Mexican Grill, Inc. v. Maxim, No. 2:12-cv-887-JFC
`• Maxim v. QVC, Inc., No. 2:12-cv-891-JFC
`• Clairmail Inc. v. Maxim, No. 2:12-cv-923-NBF
`• BMO Harris Bank Nat’l Ass’n v. Maxim, No. 2:12-cv-1538-JFC
`• Deutsche Bank AG v. Maxim, No. 2:12-cv-1604-JFC
`• Maxim v. Citigroup, Inc., No. 2:12-cv-1628-JFC
`• Maxim v. Target Corp., No. 2:12-cv-1629-JFC
`• Maxim v. Wells Fargo & Co., No. 2:12-cv-1639-JFC
`• Maxim v. Bank of Am. Corp., No. 2:12-cv-1640-JFC
`• Maxim v. U.S. Bancorp, No. 2:12-cv-1642-JFC
`• Maxim v. Walmart Stores, Inc., No. 2:12-cv-1643-JFC
`• Maxim v. JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A.
`(collectively, “Chase”), No. 2:12-cv-1641-JFC
`
`Chase filed a CBM petition against the ’510 Patent on August 21, 2014. JP
`
`
`
`Morgan Chase & Co. and JP Morgan Chase Bank, N.A. v. Maxim, CBM 2014-179, Paper
`
`No. 1 (Ex. 1006) (hereinafter “Chase”). The Board instituted review on February 20,
`
`2015. Chase, CBM 2014-179, Paper No. 11 (Ex. 1007). However, five days after the
`
`Board instituted review, Chase and Maxim filed a joint motion to terminate the
`
`proceeding because they reached a settlement agreement. Chase, CBM 2014-179,
`
`Paper No. 13. The Board granted the joint motion on February 27, 2015 and
`
`-3-
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`

`
`Docket No. 1202549-0003
`
`terminated the CBM review due to settlement. Chase, CBM 2014-179, Paper No. 15.
`
`The ’510 Patent has also been asserted in Maxim v. Branch Banking & Trust Co.,
`
`4:12-cv-369-RAS (E.D. Tex.), which is still pending in the Western District of
`
`Pennsylvania as part of the MDL proceeding, and is also the subject of ex parte
`
`reexamination proceedings under control No. 90/013,063. The ex parte
`
`reexamination is still pending.
`
`C.
`
`Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3)) and
`Service Information (37 C.F.R. § 42.8(b)(4))
`Lead Counsel
`Back-up Counsel
`David M. Tennant (Reg. No. 48,362)
`William F. Long (Reg. No. 51,967)
`dtennant@whitecase.com
`blong@mckennalong.com
`
`Postal and Hand-Delivery Address:
`Postal and Hand-Delivery Address:
`White & Case LLP
`McKenna Long & Aldridge LLP
`701 13th St., NW Washington, DC
`303 Peachtree St. NE, Ste. 5300
`20005
`Atlanta, Georgia 30308
`T: (202) 626-3684; F: (202) 639-9355
`T: (404) 527-4000; F: (404) 527-4198
`
`
`Additional counsel for Petitioners are listed in the signature block of the Petition.
`
`Service information for lead and back-up counsel is immediately above.
`
`II.
`
`FEES (37 C.F.R. § 42.203)
`
`The undersigned has paid the fee of $30,000 ($12,000 request fee; and $18,000
`
`post-institution fee) by credit card for the fees set forth in 37 C.F.R. § 42.15(b) for
`
`this Petition. The undersigned further authorizes payment for any additional fees that
`
`might be due in connection with this Petition to be charged to the above referenced
`
`Deposit Account No. 503672.
`
`-4-
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`

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`Docket No. 1202549-0003
`
`III.
`
`INTRODUCTION TO THE ’510 PATENT
`A.
`
`Overview of the ’510 Patent
`
`The ’510 Patent describes its alleged “invention [as] an apparatus, system and
`
`method for communicating a cash equivalent electronically to and from a portable
`
`module.” ’510 Patent, 1:59-63. Claim 1, the sole independent claim, recites a system
`
`for “communicating data securely” between a “first portable module,” a “portable
`
`module reader,” and a “secure [] module.”
`
`As shown in Fig. 1 (at left), the
`
`system includes a portable module 102 that
`
`can be put into communication with a
`
`microprocessor-based device 104. The
`
`microprocessor-based device 104 is further
`
`in
`
`communication with
`
`a
`
`secure
`
`microprocessor-based device 108, and can be placed in communication with
`
`additional devices such as a credit card reader, a cash acceptor, an automatic teller
`
`machine or a phone line. Color has been added to Fig. 1 to emphasize elements in
`
`Fig. 1 corresponding to portable module 102 (yellow), secure microprocessor-based
`
`device 108 (red), microprocessor-based device 104 (gray), and at least one additional
`
`device, such as phone line 116 (blue).
`
`The components of
`
`the portable module 102
`
`(yellow) and secure
`
`microprocessor-based device 108 (red) are illustrated in Figs. 2 and 3 respectively
`
`-5-
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`

`
`Docket No. 1202549-0003
`
`(with further colors added to various elements recited in the claims):
`
`
`
`’510 Patent, Figs. 2 and 3 (yellow border added to portable module (Fig. 2) and red
`
`border added to secure module (Fig. 3) to reflect how each corresponds to the
`
`portable module and secure device in Fig. 1.)
`
`The claimed “portable module” is described in the specification as a “rugged
`
`read/write data carrier” that “can be incorporated in a vast variety of portable items.”
`
`Id. at 3:40-48. It includes structures commonly found in generic computers: a
`
`“nonvolatile memory” (teal), a “real time clock circuit” (green), an “input/output
`
`circuit” (orange), a “memory control circuit” (purple), and logical constructs including
`
`a “counter” and “ID number” that a person of ordinary skill would understand to be
`
`data stored in generic memory. Id. at claim 1; Alexander Declaration (Ex. 1016)
`
`-6-
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`

`
`Docket No. 1202549-0003
`
`(hereinafter, “Alexander Decl.”) ¶¶31-33. Each of the claimed elements has an
`
`associated function, but the claims do not tie those functions together. So while the
`
`claimed “nonvolatile memory” is “for storing a first data,” that “first data” is not
`
`acted upon or even mentioned in any other claim limitation. ’510 Patent, 24:4;
`
`Alexander Decl. ¶33.a. Similarly, the “real time clock circuit” is “for time stamping
`
`data transactions,” but there is no other reference to “time stamp[s]”; the “counter” is
`
`“for counting a transaction count” but the “transaction count” is never used, and the
`
`“identification number” is “electronically readable” but is also not used for any
`
`purpose. ’510 Patent, 24:5-6; 6-7; 9-10.
`
`The claimed “portable module reader” corresponds to the microprocessor-
`
`based device 104 in Fig. 1 and has two capabilities: it “can be placed in
`
`communication with said first portable module,” and it “can be connected to a
`
`plurality of other devices.” Id. at 24:16-19. The specification does not provide any
`
`further functional or structural limitation. Alexander Decl. ¶¶34-36. It states the
`
`“portable module reader,” as “any of an unlimited number of devices.” ’510 Patent,
`
`2:37-38. Nor is the form of communication with the “first portable module” further
`
`limited; it can be by wired, wireless, optical, magnetic, “or any other similar
`
`technique.” Id. at 2:52-58. The connection with a “plurality of other devices” could be
`
`communication over “any of a vast variety of communication lines including wireless
`
`lines” to communicate “with a network of devices.” Id. at 3:29-37. A person of
`
`ordinary skill in the art would understand that the portable module reader could be
`
`-7-
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`Docket No. 1202549-0003
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`any electronic structure that is capable of communicating with the claimed modules.
`
`Alexander Decl. ¶35.
`
`The claimed “secure microcontroller-based module” corresponds to the
`
`“secure microprocessor-based device 108” and is, in a preferred embodiment, “a
`
`trusted computer.” ’510 Patent, 4:39-40. This is echoed in independent claim 1, which
`
`only imposes as structural limitations components of a generic computer. It recites “a
`
`microcontroller core” (purple), “math coprocessor” (red), “energy circuit” (brown),
`
`“memory circuit” (teal), and “real time clock circuit” (green). Id. at 24:23-32. The
`
`claimed “microcontroller core” can be a microprocessor, like in a generic computer,
`
`id. at 4:56-60, and the other components are described in terminology that makes
`
`them identical to generic computing hardware of the time. Id. at 4:61-65 (math
`
`coprocessor); 4:66-5:4 (memory circuit); 5:7-16 (input/output circuit); 5:17-22 (energy
`
`circuit); Alexander Decl. ¶¶37-38. The specification also states the “portable module”
`
`and the “secure microcontroller-based module” could be the same type of device; that
`
`is, every device could be a secure microcontroller-based module but capable of acting
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`as a portable module. ’510 Patent, 8:26-29.
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`Claim 1 also recites “said combination of said portable module reader and said
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`secure microcontroller performing secure data transfers with said first portable
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`module.” While the specification describes some scenarios for how data may be
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`transferred securely between these units, see, e.g., id. at 7:14-20, 8:32-37, those are mere
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`“examples,” and claims 1 to 6 do not require any specific secure transfer.
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`-8-
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`Docket No. 1202549-0003
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`B.
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`Prosecution History Summary of the ’510 Patent
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`The ’510 Patent was filed on January 31, 1996. A number of responses and
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`amendments are present in the file history of the ’510 Patent. Below is a summary of
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`the actions most relevant to the grounds of unpatentability in the Petition.
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`The original application was filed with 21 claims, none of which ultimately
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`issued. File History for U.S. Patent No. 5,940,510 (Ex. 1002) (hereinafter “’510 File
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`History”), Amendment, 123-128. On August 19, 1997, the examiner issued a nonfinal
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`rejection of all claims, and also imposed a restriction requirement. ’510 File History,
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`Office Action, 155-158. The applicant amended independent claim 1 to additionally
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`require a real-time clock and added additional independent claims. ’510 File History,
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`Amendment, 165. The examiner issued a final rejection of the claims, noting that it
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`was “well-known in the art to use real-time clocks for time stamping to increase the
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`security of the authentication of data.” ’510 File History, Office Action, 177.
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`The applicant further amended the claims on June 10, 1998 to include, in
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`addition to the real-time clock, “a counter for counting the number of transactions
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`that the module performed.” ’510 File History, Amendment, 188. The stated purpose
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`for including the limitation of a counter is “to help thwart ‘replay’ or counterfeiting.”
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`’510 File History, Amendment, 189. On August 10, 1998 the examiner rejected the
`
`claims, noting that the additional limitation of a counter was not persuasive as “it is
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`well- known in the art to use counters to keep track of transaction data.” ’510 File
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`History, Office Action, 199.
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`-9-
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`Docket No. 1202549-0003
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`On November 8, 1998, the applicant cancelled all then-pending claims and
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`submitted six new claims. ’510 File History, Amendment, 203-206. Those new claims
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`issued as claims 1-6 of the ’510 Patent. ’510 File History, Notice of Allowance, 214-
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`216.
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`IV.
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`REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. § 42.304
`A.
`
`Grounds for Standing (37 C.F.R. § 42.304(a))
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`Pursuant to 37 C.F.R. § 42.304(a), the ’510 Patent is eligible for CBM review
`
`(“CBMR”) because each Petitioner meets the eligibility requirements of 37 C.F.R. §
`
`42.302 and the ’510 Patent is a covered business method patent.
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`Moreover, each Petitioner is not estopped from maintaining the present
`
`Petition. Congress specifically defined the circumstances under which a party may be
`
`estopped from requesting or maintaining a post-grant review proceeding such as the
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`instant CBM Petition in 35 U.S.C. § 325(e)(1). Estoppel cannot arise under Section
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`325(e)(1) unless the Board previously issued a “final written decision under Section
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`328(a).” By its terms, a final written decision under Section 328(a) can exist only in
`
`cases where “a post-grant review is instituted and not dismissed.” 35 U.S.C. § 328(a).
`
`Each Petitioner has not been a petitioner to any post-grant review of the ’510 patent
`
`that has resulted in a final written decision under 35 U.S.C. § 328(a) and is therefore
`
`not estopped from filing the instant petition.
`
`No Petitioner is barred by 35 U.S.C. § 325(a)(1) because each Petitioner has not
`
`previously filed a civil action challenging the validity of the ’510 Patent.
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`-10-
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`

`
`Docket No. 1202549-0003
`
`1.
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`Eligibility Requirements of 37 C.F.R. § 42.302
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`Each Petitioner has been sued for infringement of the ’510 Patent in the WD
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`Tx Litigations and, as discussed above, is not estopped from challenging the claims on
`
`the grounds identified in the present petition.
`
`2.
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`Timing Requirements of 37 C.F.R. § 42.303
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`The requirements of 35 U.S.C. § 321(c) cannot be met for the ’510 Patent. As
`
`such, a petition requesting covered business method patent review of the ’510 Patent
`
`may be filed at any time.
`
`3.
`
`The ’510 Patent is a Covered Business Method Patent
`
`Previously, the Board ruled that the ’510 Patent is a covered business method
`
`patent. Chase, CBM2014-179, Paper No. 11 at 23. The Board’s ruling is consistent
`
`with the AIA, USPTO rules, and Board precedent. For example, the AIA and USPTO
`
`rules define a “covered business method patent” as “a patent that claims a method or
`
`corresponding apparatus for performing data processing or other operations used in
`
`the practice, administration, or management of a financial product or service, except
`
`that the term does not include patents for technological inventions.” AIA § 18(d)(1);
`
`see also 37 C.F.R. § 42.301(a). Following the statutory scheme, the Board employed a
`
`two-part test to determine whether a patent is eligible for CBMR: (1) the patent must
`
`claim a method or apparatus for performing data processing or other operations used
`
`in the practice, administration, or management of a financial product or service, and
`
`(2) the claimed invention cannot be a technological invention. A patent need have
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`-11-
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`Docket No. 1202549-0003
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`only one claim directed to a covered business method to be eligible for review, even if
`
`the patent includes additional claims. Google, Inc. v. Inventor Holdings, LLC, CBM2014-2,
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`Paper No. 16, 6 (citing 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012)). Applying the
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`two-part test, the Board correctly concluded that the ’510 Patent meets both parts of
`
`the test and is thus eligible for CBMR.
`
`a)
`
`The Challenged Claims Are Directed to a “Financial
`Product or Service”
`
`In reaching its decision that the ’510 patent is a CBM patent, the Board
`
`concluded that at least one claim of the ’510 patent “is directed to an ‘apparatus for
`
`performing data processing or other operations used in the practice, administration,
`
`or management of a financial product or service.” Chase, CBM2014-179, Paper No. 11
`
`at 19. The Board’s conclusion is well supported by precedent.
`
`For example, the Board has previously stated patents claiming “activities that
`
`are financial in nature, incidental to a financial activity or complementary to a financial
`
`activity” are directed to a “financial product or service.” CRS Advanced Techs., Inc. v.
`
`Frontline Techs., Inc., CBM2012-5, Paper No. 17, 7 (quoting 77 Fed. Reg. 48,735 (Aug.
`
`14, 2012)). The Board has also explained that a patent that “relates to a commercial
`
`transaction . . . is itself financial in nature” Volusion, Inc., v. Versata Software, Inc.,
`
`CBM2013-18, Paper No. 8, 6, and that “the term financial is an adjective that simply
`
`means relating to monetary matters.” SAP Am., Inc. v. Versata Dev. Grp., Inc.,
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`CBM2012-1, Paper No. 36, 23. The Board has also held that “[t]he electronic sale of
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`-12-
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`Docket No. 1202549-0003
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`something, including charging a fee to a party’s account, is a financial activity, and
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`allowing su