IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`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 COMPANY1
`Petitioner,
`v.
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`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner.
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`Case No. CBM2015-00098
`Patent No. 5,940,510
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`Petitioners’ Reply to Patent Owner’s Preliminary Response
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`1
`On June 26, 2015, the Board granted a joint motion filed by Maxim and Navy
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`Federal Credit Union (“NFCU”) to terminate the proceeding with respect to NFCU
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`pursuant to 35 U.S.C. § 327(a). Paper 12.
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`TABLE OF CONTENTS
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`PAGES
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`Introduction .................................................................................................................... 1
`I.
`II. Disclaimer of Dependent Claim 2 Has No Affect on the CBMR Eligibility
`of Independent Claim 1. ............................................................................................... 1
`A. Despite the disclaimer, the subject matter of claim 2 remains
`illustrative of the financial nature of its parent claim 1. ............................... 2
`The disclaimer also does not affect the independent basis provided
`by the Petition for finding the system of claim 1 to be directed to a
`financial product or service. ............................................................................. 3
`III. Patent Owner’s Other Arguments Do Not Show the ’510 Patent to Be
`Ineligible for CBMR. ..................................................................................................... 6
`Google, Salesforce.com, and J.P. Morgan II do not control the outcome
`A.
`here. ...................................................................................................................... 6
`Title 37 C.F.R. § 42.207(e) and Federal Circuit cases cited in Google
`do not prohibit considering the subject matter of disclaimed claims. ....... 7
`IV. Patent Owner’s Civil Suits Admit That the ’510 Patent Claims a Financial
`Product or Service. ........................................................................................................ 9
`Conclusion .................................................................................................................... 10
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`B.
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`B.
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`V.
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` U.S. Patent No. 5,940,510
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`TABLE OF AUTHORITIES
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`PAGE(S)
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`Cases
`Allergen Sales LLC v. Sandoz, Inc., 2013 WL 4854786 (E.D. Tex. Sep. 5, 2013)
`(Claim Construction Opinion) .................................................................................... 3, 8, 9
`Bank of the West et al. v. Secure Axcess LLC, CBM2015-00009, Paper 21
`(PTAB April 13, 2015) ...................................................................................................... 5, 9
`Genetics Institute, LLC v. Novartis Vaccines & Diagnostics, Inc., 655 F.3d 1291
`(Fed. Cir. 2011) ....................................................................................................................... 9
`Google, Inc. v. SimpleAir, Inc., CBM2015-00019, Paper 11
`(PTAB May 19, 2015) ............................................................................................... 6, 7, 8, 9
`Guinn v. Kopf, 96 F.3d 1419 (Fed. Cir. 1996) .......................................................................... 8
`Informatica Corp. v. Protegrity Corp., CBM2015-00021, Paper 14 (PTAB June 1, 2015) ..... 5
`J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, CBM2014-00157, Paper 11
`(PTAB Feb. 18, 2015) .................................................................................................. 2, 3, 9
`J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, CBM2014-00157, Paper 8
`(PTAB Jan. 14, 2015) ............................................................................................................ 2
`J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, CBM2014-00160, Paper 11
`(PTAB Jan. 29, 2015) ............................................................................................................ 6
`Motorola Mobility LLC, v. Intellectual Ventures I LLC, CBM2015-00005, Paper 10
`(PTAB March 27, 2015) ........................................................................................................ 5
`Salesforce.com, Inc. v. Applications in Internet Time LLC, CBM2014-00162, Paper 11
`(PTAB Feb. 2, 2015)..................................................................................................... 6, 7, 9
`Vectra Fitness, Inc. v. TWNK Corp., 162 F.3d 1379 (Fed. Cir. 1998)............................... 3, 8
`Statutes
`America Invents Act of 2011 § 18(d)(1) ........................................................................... 2, 3
`Regulations
`37 C.F.R. § 42.207(e) ............................................................................................................ 7, 9
`37 C.F.R. § 42.300(a) ................................................................................................................. 7
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`I.
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`INTRODUCTION
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`Despite disclaimer of claim 2 and contrary to Patent Owner’s arguments in its
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`Preliminary Response,2 all of the remaining claims of the ’510 Patent are eligible for
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`covered business method review (“CBMR”). Petitioner’s Petition establishes the
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`remaining claims are CBMR eligible because at least their parent, independent claim 1
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`claims a financial product or service. The subject matter of claim 2 remains
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`illustrative of the financial nature of claim 1. Nor does the disclaimer remove from
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`the specification the financial product and service embodiments covered by claim 1,
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`as shown in the Petition at p. 14. Disclaimer also does not prevent the Board from
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`considering the 30-plus lawsuits asserting claim 1 against financial products in
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`determining CBMR eligibility. The Board should find the ’510 Patent CBMR eligible
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`even though claim 2 has been disclaimed and can no longer be asserted.
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`II. DISCLAIMER OF DEPENDENT CLAIM 2 HAS NO AFFECT ON
`THE CBMR ELIGIBILITY OF INDEPENDENT CLAIM 1.
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`Patent Owner’s disclaimer removes dependent claim 2 from the ’510 Patent
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`and prevents future enforcement of claim 2, but the financial subject matter of
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`dependent claim 2 remains part of the patent and is illustrative of the financial nature
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`of independent claim 1. Even with the loss of claim 2, the ’510 Patent remains “a
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`2 Petitioner’s Reply is limited to the disclaimer issue pursuant to correspondence with
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`the Board. Petitioner does not acquiesce to the other non-meritorious arguments in
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`Patent Owner’s Preliminary Response.
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`patent that claims a[n] . . . apparatus for performing data processing or other
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`operations used in the practice, administration, or management of a financial product
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`or service,” and thus remains CBMR eligible. See AIA § 18(d)(1).
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`A. Despite the disclaimer, the subject matter of claim 2 remains
`illustrative of the financial nature of its parent claim 1.
`Patent Owner essentially argues that the subject matter claimed by now-
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`disclaimed dependent claim 2 is not relevant in determining the subject matter of its
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`parent, independent claim 1. Response at 7-12. The Board has previously considered
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`and rejected this argument. J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC,
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`CBM2014-00157, Paper 11, at 2 (PTAB Feb. 18, 2015) (hereinafter “J.P. Morgan I”).
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`In J.P. Morgan I, the petition argued that dependent claim 12, which depended
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`from independent claim 1, conferred CBMR eligibility. Id., Paper 8, at 11-14 (PTAB
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`Jan. 14, 2015). The Board agreed and instituted CBMR based solely on dependent
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`claim 12. Id. Patent owner scrambled to disclaim dependent claim 12 to avoid CBMR
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`eligibility. See id., Paper 11, at 2. Even though claim 12 was the sole basis for CBMR
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`standing, the Board found that disclaimer of claim 12 would have been ineffective to
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`remove CBMR standing of the remaining claims explaining that “standing for
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`[CBMR] remains because disclaimer of claim 12 does not change the scope of
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`independent claim 1, from which it depends.” Id. at 3.
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`Case law underscores the soundness of the Board’s J.P. Morgan I decision. For
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`example, in Allergen Sales LLC v. Sandoz, Inc., 2013 WL 4854786 (E.D. Tex. Sep. 5,
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`2013), the district court relied on–and found that the public is entitled to rely on–
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`subject matter of disclaimed dependent claims (in this case, as reflected in the
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`prosecution history) in determining the scope of the independent claim. See id., at *4,
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`*6 (citing Vectra Fitness, Inc. v. TWNK Corp., 162 F.3d 1379, 1384 (Fed. Cir. 1998)).
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`Similarly here, the Board should rely on the financial nature of dependent claim
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`2 to inform its determination of the CBMR eligibility of claim 1. See id. at *4, *6.
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`Patent Owner’s disclaimer of dependent claim 2 cannot revoke CBMR standing
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`because claim 2’s subject matter remains illustrative of the financial nature of claim 1.
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`See J.P. Morgan I, CBM2014-00157, Paper 11, at 3; AIA § 18(d)(1).
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`B. The disclaimer also does not affect the independent basis provided
`by the Petition for finding the system of claim 1 to be directed to a
`financial product or service.
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`Patent Owner argues, “Petitioner’s standing arguments relying on the
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`specification were all made in support of standing based on claim 2.” Response at 14.
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`For reasons previously explained in Section I.A above, this argument is misleading,
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`and based on a misapprehension of the impact of a dependent claim on its parent
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`independent claim. Nevertheless, and contrary to Patent Owner’s argument, the
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`Petition demonstrates that the “claims, the specification, and the patent owner’s
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`litigation history all show the ’510 Patent is directed to a financial product or service.”
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`Petition at 13. The Petition does in fact tie specific terms in claim 1 to portions of the
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`specification to show claim 1 covers a financial product or service. Id. at 14. The
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`disclaimer does not remove this subject matter from the specification.
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`The Petition demonstrates that the terms “a system,” “data,” and “a first
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`portable module,” all recited in claim 1, cover financial embodiments in the
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`specification. Petition at 14; Ex. 1001, 24:2-3. The Petition further explains that
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`although the financial subject matter of claim 2 alone is dispositive, “the specification,
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`along with claims that are directed to the relevant embodiments of the specification,
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`separately establish that the ’510 Patent meets the financial product or service
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`requirement.” Petition at 14.3 The Petition cites specific examples in the specification
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`of the financial applications of claim 1’s “system” and “portable module” and explains
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`the “data” transmitted securely by the “first portable module” in the “system” of
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`claim 1 include cash equivalents, and are therefore financial in nature. Id.
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`Indeed, the ’510 Patent explicitly aims to solve the problem that “present credit
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`cards do not enable the card to be used as cash.” Ex. 1001, 1:41-42. The ’510 Patent
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`describes the “need for an electronic system that allows a consumer to fill an
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`electronic module with a cash equivalent in the same way a consumer fills his wallet
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`with cash” such that the “consumer’s module can be debited and the merchant’s cash
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`drawer can be credited” during a financial transaction. Ex. 1001, 1:50-53.
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`Indisputably, the claimed invention is a product designed to meet this financial need.
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`The Board has instituted CBM reviews where petitions have similarly linked
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`specific claim terms to a description of a financial embodiment. For example, in
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`Informatica Corp. v. Protegrity Corp, the Board rejected the patent owner’s argument that
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`3 All emphasis in quotations added, unless otherwise noted.
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`the petition “does not cite to ‘any single word in any single claim’ that is directed to a
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`financial product or service” (emphasis in original). CBM2015-00021, Paper 14, at 11
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`(June 1, 2015). The Board instituted a CBMR based on the petition’s citation to claim
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`language (i.e., “protection attribute/attributes” of a database) and a description in the
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`specification showing that claim language encompassed a financial embodiment (i.e.,
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`“protection attributes” are used to protect banking databases in the specification). Id.
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`Similarly in Motorola Mobility LLC, v. Intellectual Ventures I LLC, the Board
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`rejected patent owner’s argument that the claimed software update methods “can be
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`applied to any type of computer software related to any industry.” The Board granted
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`CBMR institution because “[t]he Specification . . . contemplates the use of the claimed
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`methods in operations that are at least incidental or complementary to the practice,
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`administration, or management of a financial product or service.” CBM2015-00005,
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`Paper 10, at 7-8 (PTAB March 27, 2015). In Bank of the West et al. v. Secure Axcess
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`LLC, the petitioner argued “the patent specification includes discussions of financial
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`services using the claimed systems and processes.” CBM2015-00009, Paper 21, at 12-13
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`(PTAB April 13, 2015). Finding this argument persuasive, the Board instituted a
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`CBMR despite patent owner’s arguments that the claims are usable in business
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`generally and “the claim language is devoid of any financial or monetary terms.” Id.
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`Consistent with these Board decisions, the Petition here showed that language
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`in claim 1 cover financial or banking embodiment in the specification. See, e.g.,
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`Petition at 14 (claim 1’s “system [is] useful for enabling a user to fill a portable module
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`with a cash equivalent [data] and to spend the cash equivalent at a variety of
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`locations”). The disclaimer does not eliminate these financial embodiments form the
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`specification. Nor does it eliminate CMBR standing for claim 1.
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`III. PATENT OWNER’S OTHER ARGUMENTS DO NOT SHOW THE
`’510 PATENT TO BE INELIGIBLE FOR CBMR.
`A. Google, Salesforce.com, and J.P. Morgan II do not control the
`outcome here.
`Patent Owner’s reliance on Google, Inc. v. SimpleAir, Inc., CBM2015-00019,
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`Salesforce.com, Inc. v. Applications in Internet Time LLC, CBM2014-00162, and J.P. Morgan
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`Chase & Co. v. Intellectual Ventures II LLC, CBM2014-00160 (hereinafter “J.P. Morgan
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`II”) as being illustrative in the present case is misplaced. The Board in Google found
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`the claims ineligible for CBMR because “[p]etitioner [] provide[d] no analysis of the
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`language of claim 1 or explanation as to why the particular language of claim 1 recites an apparatus
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`for performing data processing or other operations used in the practice,
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`administration, or management of a financial product or service.” CBM2015-00019,
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`Paper 11, at 11 (PTAB May 19, 2015). The Board in Salesforce.com denied CBMR
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`eligibility for the same reasons. CBM2014-00162, Paper 11, at 10 (PTAB Feb. 2,
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`2015). The patent’s specification in J.P. Morgan II never tied the claims to a financial
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`product or service. CBM2014-00160, Paper 11, at 11-12 (PTAB Jan. 29, 2015).
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`In contrast, and as explained Section I.B above, the Petition here specifically
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`explained that, in addition to now-disclaimed claim 2, the remaining claims, as
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`illustrated by “embodiments of the specification, separately establish that the ’510
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`Patent meets the financial product or service requirement.” See Petition at 14; supra
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`Section II.B (describing Petition’s analysis of terms in claim 1). Unlike in Google,
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`Salesforce.com, and J.P. Morgan II, the Petition here demonstrates that claim 1 covers
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`financial embodiments. The ’510 patent is therefore CBMR eligible.
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`B. Title 37 C.F.R. § 42.207(e) and Federal Circuit cases cited in
`Google do not prohibit considering the subject matter of
`disclaimed claims.
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`Patent Owner incorrectly contends that 37 C.F.R. § 42.207(e) and three Federal
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`Circuit cases cited by the Board in Google stand for the proposition that disclaimed
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`claim 2 cannot be a basis for CBMR standing. The statement “[n]o post-grant review
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`will be instituted based on disclaimed claims” in 37 C.F.R. § 42.207(e)4 simply means
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`the Board will not institute CBMR of disclaimed claims. See, e.g., Google, CBM2015-
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`00019, Paper 11, at 2; Salesforce.com, CBM2014-00162, Paper 11 at 2. However, the
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`statute does not prohibit the Board from considering the subject matter of the
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`disclaimed claims to determine CMBR eligibility of other claims. Indeed, the Board in
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`Google did not ignore the subject matter of a disclaimed dependent claim when
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`determining whether the corresponding independent claim could support CBMR
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`standing. See Google, CBM2015-00019, Paper 11, at 10-14. The Board first found that
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`claim 1 merely recited “generic, context-neutral data” after considering and finding
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`insufficient for CBMR eligibility the specification’s non-limiting examples of “data” as
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`including “stock quotes, weather, lotto,” and then separately considered disclaimed
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`4 Section 42.207(e) also applies to CBMR. See 37 C.F.R. § 42.300(a).
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`claim 24, which recited that “data” relates to “news, sports, financial markets,
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`weather.” Id.
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`Google cited three Federal Circuit cases for the proposition that a disclaimed
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`claim is treated as though it never existed and accordingly found that the disclaimed
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`claim standing alone cannot confer CBMR standing. See id., at 14. However, treating a
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`dependent claim as though it never existed does not mean the Board should also
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`disregard the subject matter of the dependent claim when evaluating whether the parent
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`independent claim and remaining claims support CBMR standing. Moreover, the
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`Federal Circuit cases cited by Google and relied upon by Patent Owner discuss the
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`impact of a statutory disclaimer with regard to reissue and interference proceedings.
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`The cases have limited relevance here in a CBMR context and they certainly do not
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`prevent the Board from considering the subject matter of a disclaimed dependent
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`claim when evaluating CBMR standing.
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`In Vectra Fitness, the court found disclaimed claims no longer part of the
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`“original patent” in a reissue proceeding to prevent patent owner from recapturing
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`disclaimed subject matter via reissue. 162 F.3d at 1383-84. More tellingly, the court
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`still considered the disclaimed claims when determining the breadth of the remaining
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`claims, see id. at 1384; Allergen Sales, 2013 WL 4854786, at *6 (citing Vectra Fitness for
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`this proposition). In Guinn v. Kopf, the court viewed the disclaimed claims as if they
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`“never existed” in an interference to ensure the interfering patent could not exclude
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`others from the disclaimed subject matter. 96 F.3d 1419, 1422 (Fed. Cir. 1996). The
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`court in Genetics Institute, LLC v. Novartis Vaccines & Diagnostics, Inc. determined that a
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`disclaimed claim alone cannot support jurisdiction in a district court interference
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`proceeding because the disclaimed claim is treated as if it “never existed.” 655 F.3d
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`1291, 1299-1300 (Fed. Cir. 2011). None of these cases hold that the subject matter of
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`a disclaimed claim cannot be considered in relation to the remaining claims. Instead,
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`they all stand for the unremarkable proposition that disclaimed claims are not
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`“reexamined,” which is the same rule set forth in 37 C.F.R. § 42.207(e). See, e.g., Google,
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`at 2; Salesforce.com, at 2.
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`None of these cases support what Patent Owner urges–that the Board should
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`entirely ignore the subject matter of disclaimed claim 2. The subject matter of
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`disclaimed dependent claim 2, illustrative of the financial nature of claim 1, remains
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`part of the ’510 Patent’s record and shows claim 1 to be CBMR eligible. See, e.g., J.P.
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`Morgan I, CBM2014-00157, Paper 11, at 2; Allergen Sales, 2013 WL 4854786, at *6.
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`IV. PATENT OWNER’S CIVIL SUITS ADMIT THAT THE ’510
`PATENT CLAIMS A FINANCIAL PRODUCT OR SERVICE.
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`As discussed in the Petition at p. 15, Patent Owner’s assertion of the ’510
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`Patent against the financial products and services of over 30 financial institutions,
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`banks, and retailers is a factor the Board may weigh in favor of finding CBMR
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`standing. See Bank of the West, CBM2015-00009, Paper 21, at 13. Significantly, Patent
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`Owner admits in these complaints that the claims of the ’510 Patent are directed to
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`financial products and services. The allegation against Petitioner American Express is
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`typical: “[w]hen … these applications are installed on a portable computing device []
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`and combined with components of American Express’s banking infrastructure for
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`performing secure financial transactions, the resulting systems are made and/or used,
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`thereby infringing … one or more claims of the ’510 Patent.” Ex. 1013, Complaint in
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`Patent Owner v. Petitioner American Express, at p. 4. Indeed, Maxim’s litigation
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`allegations show that, in addition to independent claim 1, Maxim believes that at least
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`the dependent claims of the ’510 Patent – claims 3, 5, and 6 – likewise relate to
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`systems for “performing secure financial transactions,” id, and thus, just like claim 1,
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`are directed to financial products and services.
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`V.
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`CONCLUSION
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`For the foregoing reasons and those stated in the Petition, Petitioners
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`respectfully request institution of trial for all remaining claims.
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` Respectfully submitted,
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` /David M. Tennant/
`David M. Tennant
`Registration No. 48,362
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`WHITE & CASE, LLP
`701 13th St. NW
`Washington, DC 20005
`(202) 626-3684
`(202) 639-9355 (fax)
`dtennant@whitecase.com
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`Counsel for American Express Company and
`American Express Travel Related Services
`Company, Inc.
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`10
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`Date: July 20, 2015
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`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. §§ 42.6(e)(1) and 42.205, I hereby certify that on this
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`20th day of July, 2015, the foregoing Reply to Patent Owner’s Preliminary Response
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`was served via electronic mail, pursuant to the parties’ May 29, 2015 electronic service
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`agreement.
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`The names and addresses of the parties being served are as follows:
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`Kenneth Weatherwax
`weatherwax@lowensteinweatherwax.com
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`Parham Hendifar
`hendifar@lowensteinweatherwax.com
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`Date: July 20, 2015
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`11