throbber
Trials@uspto.gov
`571.272.7822
`
`Paper No. 17
`Filed: September 22, 2015
`
`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., and
`STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-00098
`Patent 5,940,510
`____________
`
`Before TREVOR M. JEFFERSON, MITCHELL G. WEATHERLY, and
`KERRY BEGLEY, Administrative Patent Judges.
`
`BEGLEY, Administrative Patent Judge.
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`American Express Company, American Express Travel Related
`Services Company, Inc., Compass Bank, Discover Financial Services,
`Discover Bank, Discover Products Inc., and State Farm Mutual Automobile
`
`

`
`CBM2015-00098
`Patent 5,940,510
`
`Insurance Company (collectively, “Petitioner” or “Petitioners”)1 filed a
`Corrected Petition requesting covered business method patent review of
`claims 1–6 of U.S. Patent No. 5,904,510 (Ex. 1001, “the ’510 patent”).
`Pet. 1, 22. Maxim Integrated Products, Inc. (“Patent Owner”) filed a
`Preliminary Response. Paper 11 (“Prelim. Resp.”).
`With its Preliminary Response, Patent Owner provided evidence that
`it filed with the Office a statutory disclaimer of claim 2 of the ’510 patent,
`pursuant to 37 C.F.R. § 1.321(a). See id. at 2, 7; Ex. 2003. Accordingly,
`“[n]o post grant review will be instituted based on disclaimed claim[ 2].”
`37 C.F.R. § 42.207(e).
`For remaining claims 1 and 3–6 of the ’510 patent, we determine
`whether to institute a covered business method patent review under
`35 U.S.C. § 324. See Office Patent Trial Practice Guide, 77 Fed. Reg.
`48,756, 48,764–65 (Aug. 14, 2012) (“Trial Practice Guide”). Pursuant to
`35 U.S.C. § 324(a), covered business method patent review may not be
`instituted unless “the information presented in the petition . . . , if such
`information is not rebutted, would demonstrate that it is more likely than not
`that at least 1 of the claims challenged in the petition is unpatentable.” For
`the reasons that follow, we determine that the Petition, taking into account
`the Preliminary Response, demonstrates that it is more likely than not that
`claims 1 and 3–6 of the ’510 patent are unpatentable. We institute covered
`business method patent review of these claims.
`
`
`1 The Corrected Petition also lists Navy Federal Credit Union (“NFCU”) as
`a petitioner. Paper 4 (“Pet.”), 1. NFCU and Patent Owner subsequently
`filed a joint motion to terminate NFCU’s participation in the case, and we
`granted the motion. Paper 12.
`
`
`
`2
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`

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`CBM2015-00098
`Patent 5,940,510
`
`I. BACKGROUND
`A. RELATED PROCEEDINGS
`Patent Owner has asserted the ’510 patent against all Petitioners
`
`except Discover Products Inc. (“DPI”) in the U.S. District Court for the
`Western District of Texas. Pet. 1, 11; see Paper 5, 2. In addition, Patent
`Owner has asserted the patent against numerous other defendants in more
`than thirty cases filed in various district courts. See Paper 5, 1–7; Pet. 1–4.
`Moreover, the ’510 patent has been involved in several proceedings
`before the Office. The patent currently is the subject of a pending ex parte
`reexamination proceeding, Control No. 90/013,063. Pet. 4; Paper 5, 2. The
`patent also was the subject of two previous petitions for covered business
`method patent review filed by different sets of petitioners. Paper 5, 3. First,
`in CBM2014-00038, the Board determined that 35 U.S.C. § 325(a)(1)
`precluded institution of review, because one of the petitioners had filed a
`civil action challenging the validity of claims of the ’510 patent before filing
`the petition. PNC Bank, N.A. v. Maxim Integrated Prods., Inc., Case
`CBM2014-00038 (PTAB June 3, 2014) (Paper 19). Second, in CBM2014-
`00179, the Board instituted review of claims 1–3 and 5–6 of the ’510 patent
`based on obviousness grounds asserted in the petition. Ex. 1007. After
`institution, the case was terminated pursuant to settlement. JP Morgan
`Chase & Co. v. Maxim Integrated Prods., Inc., Case CBM2014-00179
`(PTAB Feb. 27, 2015) (Paper 15).
`B. THE ’510 PATENT
`The ’510 patent is directed to a “system, apparatus, and method for
`
`communicating valuable data” to and from a “portable module.” Ex. 1001,
`[57], 1:59–61. A consumer can carry the portable module, fill it with a
`
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`CBM2015-00098
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`“cash equivalent” at an “add-money station,” and spend the stored cash
`equivalent “when buying products and services in the market place.” Id. at
`[57], 1:61–2:2. For example, a consumer can “take cash out of an ATM,”
`“put the cash value into the portable module,” and use monetary value on the
`portable module to “pay for a train fare.” Id. at 7:13–35, 8:30–37.
`
`In a preferred embodiment, portable module 102 communicates to
`microprocessor based device 104, which is connected to secure
`microprocessor based module 108. Id. at 1:64–66, 2:32–34, 2:59–61.
`Portable module 102 is a “rugged read/write data carrier,” comprising
`memory 202, memory controller 204, counter 206 “for keeping track of the
`number of transactions the module has performed,” timer 208 “to time stamp
`transactions performed by the module,” unique identification number 210,
`and input/output control circuit 212. Id. at 3:39–4:24. Microprocessor
`based device 104, in turn, “can be any of an unlimited number of devices,”
`for example, “a personal computer, an add-a-fare machine at a train or bus
`station (similar to those in today’s District of Columbia metro stations), a
`turn style, a toll booth, a bank’s terminal, . . . or any device that controls
`access, or meters a monetary equivalent.” Id. at 2:36–45. Finally, secure
`microprocessor based module 108 comprises “microprocessor 12, a real time
`clock 14, control circuitry 16, a math coprocessor 18, memory circuitry 20,
`input/output circuitry 26, and an energy circuit 34.” Id. at 4:24–32. In
`particular, math coprocessor 18 “handle[s] the complex mathematics of
`[Rivest-Shamir-Adleman (“RSA”)] encryption and decryption or other types
`of math intensive encryption or decryption techniques.” Id. at 4:60–65.
`
`
`
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`C. ILLUSTRATIVE CLAIM
`Claim 1, the sole independent claim of the ’510 patent, is illustrative
`of the claimed subject matter:
`1. A system for communicating data securely, comprising:
`a first portable module comprising:
`a nonvolatile memory for storing a first data;
`a first real time clock circuit for time stamping data
`transactions;
`a counter for counting a transaction count;
`an input/output circuit;
`a substantially unique electronically readable
`identification number readable by said input/output
`circuit; and
`a memory control circuit in electrical communication
`with said nonvolatile memory, said real time clock,
`said counter, and said input/output circuit;
`a portable module reader that can be placed in
`communication with said first portable module, said
`portable module reader can be connected to a plurality of
`other devices;
`a secure microcontroller based module in electronic
`communication with said portable module reader, said
`secure microcontroller comprising:
`a microcontroller core;
`a math coprocessor, in communication with said
`microcontroller core, for processing encryption
`calculations;
`an energy circuit for storing energy;
`a memory circuit connected to said microcontroller core;
`a memory circuit in communication with said
`microcontroller core; and
`a second real time clock circuit in communication with
`said microcontroller,
`said combination of said portable module reader and said secure
`microcontroller performing secure data transfers with said
`first portable module.
`Ex. 1001, 24:1–36.
`
`
`
`5
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`

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`CBM2015-00098
`Patent 5,940,510
`
`D. ASSERTED PRIOR ART
`The Petition relies upon the following prior art references, as well as
`the supporting Declaration of Peter Alexander, Ph.D. (Ex. 1016):
`U.S. Patent No. 5,210,846 (issued May 11, 1993) (Ex. 1008, “Lee”);
`International Patent Application Publication No. WO 83/03018
`(published Sept. 1, 1983) (Ex. 1003, “Cremin”);
`INTEGRATED CIRCUIT CARDS, TAGS AND TOKENS ix–xv, 1–11, 81–91,
`136–164 (P.L. Hawkes et al., eds. 1990) (Ex. 1004, “Hawkes”);
`R. L. Rivest et al., A Method for Obtaining Digital Signatures and
`Public-Key Cryptosystems, 21 COMM. OF THE ACM 2, 120
`(1978) (Ex. 1005, “Rivest”).
` E. ASSERTED GROUNDS
`Petitioner challenges claims 1 and 3–6 of the ’510 patent based on the
`following asserted grounds of unpatentability. Pet. 22.
`Challenged Claim[s] Basis
`Reference[s]
`§ 103 Cremin and Hawkes2
`1, 3
`4
`§ 103 Cremin, Hawkes, and Lee
`5, 6
`§ 103 Cremin, Hawkes, and Rivest
`
`II. ANALYSIS
`A. PETITIONER’S STANDING
`To have standing, Petitioner must show that: (1) Petitioner “meets the
`
`eligibility requirements of § 42.302,” and (2) “the patent for which review is
`sought is a covered business method patent.” 37 C.F.R. § 42.304(a).
`
`2 The Petition includes what it characterizes as two asserted grounds
`challenging claims 1 and 3, one based on “Cremin and Hawkes” and the
`other based on “Hawkes and Cremin.” Id. As we explain below, we
`consider these arguments—both asserting obviousness of the same claims
`over the same prior art references—to be a single asserted ground.
`
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`
`1. Requirements of 37 C.F.R. § 42.302
`Petitioner asserts that it satisfies both requirements in 37 C.F.R.
`
`§ 42.302. Pet. 11. First, Petitioner represents that all Petitioners except DPI
`“ha[ve] been sued for infringement” of the ’510 patent and that DPI’s real
`party-in-interest and privy “has been sued for infringement” of the patent,
`thereby satisfying 37 C.F.R. § 42.302(a). Id.; 37 C.F.R. § 42.302(a).
`Second, Petitioner represents that it is not “estopped from challenging the
`claims on the grounds identified” in the Petition, as required under 37 C.F.R.
`§ 42.302(b). Pet. 11; 37 C.F.R. § 42.302(b). Patent Owner does not dispute
`these assertions. We are persuaded that Petitioner meets the requirements of
`37 C.F.R. § 42.302.
`2. Covered Business Method Patent
`The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29,
`
`§ 18(d)(1), 125 Stat. 284, 331 (2011) defines 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.” In
`determining whether a patent is eligible for review as a covered business
`method patent, the focus is on the claims. See 37 C.F.R. § 42.301;
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule,
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”). One claim
`directed to a covered business method is sufficient to render the patent
`eligible for review. CBM Rules, 77 Fed. Reg. at 48,736.
`
`
`
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`CBM2015-00098
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`
`a. Financial Product or Service
`Petitioner argues that the ’510 patent claims, together with the
`financial embodiments disclosed in the specification and Patent Owner’s
`assertion of the patent against numerous financial institutions, demonstrate
`that the patent satisfies the financial product or service requirement of the
`AIA’s definition of a covered business method patent. Pet. 12–15.
`As an initial matter, we address Patent Owner’s argument that its
`statutory disclaimer of claim 2 of the ’510 patent, after the Petition was filed,
`is dispositive of whether Petitioner has shown that the patent satisfies the
`financial product or service requirement. See Prelim. Resp. 8–12.
`Specifically, Patent Owner asserts that we must treat the ’510 patent as
`though disclaimed claim 2 never existed, yet the Petition argues only that
`claim 2 meets the financial product or service requirement and refers to
`other claims in a conclusory and unsupported fashion. Id.
`We disagree. The Petition explicitly argues that “the claims” of the
`’510 patent demonstrate that the patent satisfies the financial product or
`service requirement. See, e.g., Pet. 13 (“Here, the claims, the specification,
`and the patent owner’s litigation history all show the ’510 Patent is directed
`to a financial product or service.”) (emphasis added); id. at 14 (“[T]he
`specification, along with claims that are directed to the relevant
`embodiments of the specification separately establish that the ’510 Patent
`meets the financial product or service requirement . . . .”) (emphasis added);
`id. at 15 (“When taken together with the claims and specification, the
`’510 Patent is clearly directed to a ‘financial product or service.’”)
`(emphases added). Moreover, the Petition uses non-limiting language in
`making arguments that discuss or focus on claim 2, such as “at least
`
`
`
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`CBM2015-00098
`Patent 5,940,510
`
`claim 2.” Id. at 14–15 (emphasis added). Therefore, we understand the
`Petition to use claim 2 as an example, and the Petition’s arguments regarding
`the financial product or service requirement to apply more broadly to the
`subject matter of all claims of the ’510 patent.
`Accordingly, we consider whether Petitioner has shown that the
`remaining claims of the ’510 patent—claims 1 and 3–6—demonstrate that
`the patent meets the financial product or service requirement. We are
`persuaded by the Petition’s showing that the system recited in independent
`claim 1 encompasses financial products and services and is intended to be
`used for such products and services, as evidenced by the financial
`embodiments disclosed in the specification. Id.
`In particular, the Petition points to the Abstract of the ’510 patent:
`“[T]he disclosed system, apparatus and method are useful for enabling a user
`to fill a portable module with a cash equivalent and to spend the cash
`equivalent at a variety of locations.” Id. at 14 (quoting, with emphasis,
`Ex. 1001, [57]). Similarly, the Petition references the “Summary of the
`Invention” section of the ’510 patent: “The portable module can be used as
`a cash equivalent when buying products and services in the market place
`. . . . The portable module can be carried by a consumer, filled with
`electronic money at an add-money station, and be debited by a merchant
`when a product or service is purchased by the consumer.” Ex. 1001, 1:60–
`2:2 (emphases added); see Pet. 14 (quoting Ex. 1001, 1:60–63, citing
`Ex. 1001, 1:66–2:2). In addition, the Petition cites to the two “‘practical
`applications of the system’” discussed in the ’510 patent specification.
`Pet. 14 (quoting Ex. 1001, 7:9). One refers to using “monetary value” from
`the portable module to “pay for a train fare.” Ex. 1001, 7:26, 7:32. In the
`
`
`
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`
`other, a consumer can “take cash out of an ATM machine” and “put the cash
`value into the portable module.” Id. at 8:35–37.
`Having reviewed the Petition’s arguments and the specification, we
`are persuaded that embodiments involving secure financial transactions,
`including payments and deposits, are the central focus of the specification.
`Even Patent Owner concedes that the ’510 patent specification discloses
`“monetary embodiments.” Prelim. Resp. 22. In fact, to muster any non-
`monetary embodiments, Patent Owner resorts to relying on embodiments
`incorporated by reference into the ’510 patent from another patent
`application. See id.
`Moreover, we agree with Petitioner that, contrary to Patent Owner’s
`assertions, the relationship between the portions of the specification cited in
`the Petition and the claim language—particularly the “system,” “data,” and
`“first portable module” of claim 1—is evident from the Petition. See
`Paper 16 (“Reply”),3 3–4; Pet. 14–15; Prelim. Resp. 10–13, 19. The cited
`portions of the specification, outlined above, make clear that the “system for
`communicating data securely” recited in claim 1 is intended to be used for
`secure financial transactions. As part of this system, the recited “data” may
`encompass a cash equivalent or monetary value. Further, the recited “first
`portable module” stores that data and “perform[s] secure . . . transfers” of
`the data with the other recited components. A claimed system that transfers
`a cash equivalent or monetary value is a financial product, and providing
`such transfers is a financial service. See Gillman v. StoneEagle Servs., Inc.,
`
`
`3 Pursuant to Petitioner’s request, given that claim 2 was disclaimed after
`the Petition was filed, we allowed Petitioner a Reply limited to the impact of
`the disclaimer on covered business method patent eligibility. See id. at n.1.
`
`
`
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`CBM2015-00098
`Patent 5,940,510
`
`Case CBM2013-00047, slip op. at 7–8 (PTAB Feb. 18, 2014) (Paper 11)
`(holding that processing payment is an “inherently financial activit[y]”);
`Apple Inc. v. Sightsound Techs., LLC, Case CBM2013-00020, slip op. at 11–
`12 (PTAB Oct. 8, 2013) (Paper 14) (“The electronic transfer of money is a
`financial activity, and allowing such a transfer amounts to providing a
`financial service.”); 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)
`(statement of Sen. Schumer) (listing “financial data processing” and “issuing
`or accepting stored value or payment instruments” as examples of financial
`products).
`Patent Owner disputes Petitioner’s assertion that the ’510 patent
`satisfies the financial product or service requirement by arguing that
`claims 1 and 3–6 are not “limited to,” “specifically directed to,” or “specific
`to financial products or services.” Prelim. Resp. 19–25. These arguments,
`however, overstate the financial product or service requirement. To satisfy
`the definition of a covered business method patent in § 18(d)(1) of the AIA,
`the patent need only “claim[] 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.” AIA,
`§ 18(d)(1) (emphases added). Thus, the express statutory language does not
`mandate that a claim be specific or limited to a financial product or service.
`Instead, it requires only that a claim be “used in the practice, administration,
`or management” of such a product or service.
`The legislative history further demonstrates that the AIA’s definition
`is not as narrow as Patent Owner suggests. Rather, as the Office has
`explained, the legislative history of the AIA supports a “broad[]”
`interpretation of a “financial product or service.” CBM Rules, 77 Fed. Reg.
`
`
`
`11
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`CBM2015-00098
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`
`at 48,735 (response to comment 1). Specifically, the legislative history
`explains that the definition of a covered business method patent was drafted
`to encompass “not only patents claiming the financial product or service
`itself, but also patents claiming activities that are financial in nature,
`incidental to a financial activity or complementary to a financial activity.’”
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer);
`see Prelim. Resp. 6; CBM Rules, 77 Fed. Reg. at 48,735. In other words,
`the legislative history indicates that to meet the requirement, the patent must
`be “intended to be used in the practice, administration, or management of
`financial services or products,” 157 Cong. Rec. S5441 (statement of Sen.
`Leahy), but “need not recite a specific financial product or service,” id. at
`S5432 (statement of Sen. Schumer). Accordingly, Patent Owner’s
`arguments that the ’510 patent claims are not limited or specific to a
`financial product or service are misplaced and unpersuasive.
`Finally, we agree with Petitioner that Patent Owner’s assertion of the
`’510 patent against numerous financial institutions and banks is a factor
`weighing in favor of a conclusion that the ’510 patent is “used in” financial
`products or services. See Pet. 15; Reply 9–10; Bank of the West v. Secure
`Axcess, LLC, CBM2015-00009, slip op at 13 (PTAB Apr. 13, 2015)
`(Paper 21); Paper 5, 1–7. Petitioner presents persuasive evidence that at
`least some of these allegations are specific to “secure financial transactions”
`on mobile banking products or systems. See Ex. 1013, 4.
`For the reasons set forth above, we determine that claim 1 of the
`’510 patent recites an “apparatus for performing data processing or other
`operations used in the practice, administration, or management of a financial
`
`
`
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`product or service,” as required by the definition of a covered business
`method patent in § 18(d)(1) of the AIA. See 37 C.F.R. § 42.301(a).
`b. Technological Invention
`The AIA definition of a covered business method patent excludes
`technological inventions. AIA, § 18(d)(1). To determine whether a patent is
`for a technological invention, we consider “on a case-by-case basis”
`“whether the claimed subject matter as a whole recites a technological
`feature that is novel and unobvious over the prior art; and solves a technical
`problem using a technical solution.” 37 C.F.R. § 42.301(b); see CBM Rules,
`77 Fed. Reg. at 48,736. “Mere recitation of known technologies, such as
`computer hardware, communication or computer networks, software, [or]
`memory,” or “[c]ombining prior art structures to achieve the normal,
`expected, or predictable result of that combination,” does not render a patent
`a technological invention. Trial Practice Guide, 77 Fed. Reg. at 48,763–64.
`
`Petitioner contends that the ’510 patent does not recite a
`“technological feature that is novel and unobvious over the prior art,”
`because each of the recited technological features was well known before
`1996, when the application that issued as the ’510 patent was filed. Pet. 16–
`19. As support, Petitioner proffers testimony from Dr. Alexander. See
`Ex. 1016 ¶¶ 33–38. Further, Petitioner asserts that the ’510 patent
`specification evidences that the recited technology was known by referring
`only to the basic functions of, or the use of available versions of, the recited
`technological features. Id. Petitioner also argues that the combination of
`these features merely achieves the normal, expected, and predictable result
`of the combination. Id. at 18–19. On this record, we agree.
`
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`The ’510 patent claims, including claim 1, recite many technological
`
`features—e.g., nonvolatile memory, clock circuits, a counter, input/output
`circuits, memory circuits, a microcontroller core, a math coprocessor, and an
`energy circuit. Dr. Alexander testifies that each technological feature recited
`in the ’510 patent claims was common before 1996. See Ex. 1016 ¶¶ 33–38.
`For example, Dr. Alexander, citing an article published in the New York
`Times in 1986, explains that math coprocessors were recognized in the field
`for effectiveness in encryption calculations. Id. ¶ 38.b (citing Ex. 1015).
`In addition, the written description of the ’510 patent refers to each
`technological feature briefly and generally by reference to its function,
`without any detail or particularity that would suggest or be expected of a
`disclosure of new technology, e.g., “counter 206 for keeping track of the
`number of transactions the module has performed,” “timer [208] . . . to
`provide the ability to time stamp transactions.” See Ex. 1001, 3:1–27, 3:39–
`5:62. Further, for some of the features, the specification discusses using
`known structures or devices, and certain versions of available products.
`E.g., id. at 2:36–45, 4:56–58, 5:38–40. Thus, we are persuaded that the
`’510 patent claims, including claim 1, recite technological features that were
`known and conventional at the time of filing in 1996.
`
`We are not persuaded by Patent Owner’s assertion that Petitioner
`mischaracterizes the specification in arguing that it merely names the basic
`functions of certain recited technological features. Prelim. Resp. 30–31.
`Patent Owner argues that Petitioner fails to address two sentences of the
`specification describing the math coprocessor and memory. Id. (quoting
`Ex. 1001, 3:60–65, 4:63–65). Yet Patent Owner makes no attempt to show
`that the sentences refute Petitioner’s showing that these recited technological
`
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`features lack novelty. Notably, Dr. Alexander’s testimony quotes the
`relevant sentence regarding math coprocessors and, nonetheless, concludes
`that the recited math coprocessor was a “well known and readily available
`component[].” Ex. 1016 ¶ 38 (quoting Ex. 1001, 4:61–65). Having
`reviewed the additional portions of the specification to which Patent Owner
`directs our attention, we are not persuaded that they undermine Petitioner’s
`position, supported by Dr. Alexander’s testimony, that the recited
`technological features were known before the ’510 patent was filed.
`
`Further, Patent Owner asserts that the ’510 patent recites novel and
`unobvious technological features, particularly a “counter for counting a
`transaction count.” Prelim. Resp. 35–36. Patent Owner disputes Petitioner’s
`contention, in its asserted obviousness grounds, that Hawkes teaches or
`suggests this recited counter, and argues that Hawkes actually teaches away
`from using such a counter. Id. Dr. Alexander, however, explicitly addresses
`the sections of Chapter 6 and 8 of Hawkes on which Patent Owner’s
`argument relies. Ex. 1016 ¶¶ 82–85. According to Dr. Alexander, Chapter 8
`of Hawkes teaches the recited counter. Id. Further, a person of ordinary
`skill would have understood that the inconvenience associated with
`transaction numbering referenced in Chapter 6 of Hawkes “does not apply to
`all situations,” and that “the benefits of using a transaction sequence number
`to prevent repl[a]y would outweigh any convenience issues.” Id. ¶¶ 83–84.
`On this record, based on our review of Dr. Alexander’s testimony and
`Hawkes, we are persuaded that Petitioner has shown sufficiently that a
`transaction counter was known in the art, and that “a person of ordinary
`skill, upon reading [Hawkes],” would not be “discouraged from following
`the path set out in [Chapter 8 of Hawkes], or . . . led in a direction divergent
`
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`from the path” taken by the ’510 patent inventors in using such a counter. In
`re Mouttet, 686 F.3d 1322, 1333–34 (Fed. Cir. 2012) (quotations omitted);
`accord Ricoh Co. v. Quanta Comput. Inc., 550 F.3d 1325, 1332 (Fed. Cir.
`2008). Accordingly, at this stage of the proceeding, we are not persuaded by
`Patent Owner’s argument that Hawkes teaches away from the recited
`counter, or that the counter is a novel feature of the claims.
`In addition, Patent Owner faults the Petition for being conclusory in
`addressing the claims as a whole, and in relying on the asserted grounds of
`unpatentability in addressing whether the ’510 patent recites a technological
`invention. See Prelim. Resp. 30–33. Patent Owner also objects to the
`Petition’s references to our previous institution decision in CBM2014-
`00179, asserting that such reliance is misplaced because Patent Owner
`disclaimed claim 2 after that decision and that Petitioner improperly
`attempts to incorporate by reference material from that case. Id. at 29.
`Based on our review of the Petition, however, Petitioner’s arguments are
`sufficiently detailed and supported. See Pet. 16–19. Further, the Petition’s
`references to our institution decision in CBM2014-000179 do not amount to
`an improper incorporation by reference, and remain appropriate even after
`Patent Owner disclaimed claim 2—which recited additional technological
`features beyond those recited in claim 1 and the other remaining claims of
`the ’510 patent. See Ex. 1007, 19–21. Likewise, the Petition refers to the
`asserted grounds of unpatentability only as “further” or additional evidence
`that the claims lack a novel and unobvious technological feature. Pet. 17
`(citing Dr. Alexander Declaration as well as “infra at § V.A”); id. at 19
`(“[a]s further detailed below in §§ V.B-V.D”) (emphasis added).
`
`
`
`16
`
`

`
`CBM2015-00098
`Patent 5,940,510
`
`On the record before us, we are persuaded that claim 1 of the
`’510 patent recites known technological features and that combining these
`known technological features to achieve only “secure data transfers” is
`insufficient to render the combination anything but the “normal, expected, or
`predictable result of that combination.” Trial Practice Guide, 77 Fed. Reg. at
`48,764; Ex. 1001, 24:34–37. Thus, on this record, Petitioner has shown that
`claim 1 lacks a novel and unobvious technological feature. We, therefore,
`determine that the ’510 patent does not fall within the exception for
`technological inventions in the AIA’s definition of a covered business
`method patent. See 37 C.F.R. § 42.301(b); Google Inc. v. Inventor
`Holdings, LLC, Case CBM2014-00002, slip op. at 10 (PTAB Apr. 1, 2014)
`(Paper 16); 157 Cong. Rec. S1364 (daily ed. Sept. 8, 2011) (statement of
`Sen. Schumer).
`Accordingly, for the reasons given above, we determine that the
`’510 patent is eligible for review as a covered business method patent.
`B. CLAIM CONSTRUCTION
`1. Applicable Standard
`Petitioner proffers a single claim term for construction under the
`
`broadest reasonable interpretation standard. Pet. 22–24. Patent Owner does
`not respond to Petitioner’s proposed construction or put forward any claim
`term for construction. Patent Owner, nonetheless, argues that we should
`apply the claim construction standard outlined in Phillips v. AWH Corp., 415
`F.3d 1303 (Fed. Cir. 2005) (en banc), instead of the broadest reasonable
`interpretation standard, applicable to unexpired patents pursuant to 37 C.F.R.
`§ 42.300(b). Prelim. Resp. 42–44.
`
`
`
`17
`
`

`
`CBM2015-00098
`Patent 5,940,510
`
`According to Patent Owner, the ’510 patent “will expire on
`January 30, 2016,” “months before any final written decision” in this case.
`Id. at 43. Patent Owner, therefore, reasons that the Phillips standard will
`apply to any final written decision. See id. at 42–44. Patent Owner argues
`that applying the broadest reasonable interpretation standard at institution
`but the Phillips standard in the final written decision would be contrary to
`35 U.S.C. § 324, improperly favor institution, and waste resources of the
`Board and the parties. Id. at 44–48. Moreover, Patent Owner asserts that
`the broadest reasonable interpretation standard “is based on Patent Owner’s
`right to add to or amend the claims of an unexpired patent” and, thus,
`“relinquishment of that right should be substantial enough to eliminate that
`support.” Id. at 44. Patent Owner represents that it “disclaims and
`relinquishes any remaining right it has to add or amend the remaining claims
`of the patent (other than statutory disclaimer).” Id.
`At this time, the ’510 patent is not expired. See id. at 43. Under
`37 C.F.R. § 42.300(b), the Board interprets “a claim in an unexpired patent”
`using the “broadest reasonable construction in light of the specification of
`the patent in which it appears.” 37 C.F.R. § 42.300(b).4 In In re Cuozzo
`Speed Technologies, LLC, 793 F.3d 1268 (Fed. Cir. 2015), the Federal
`Circuit held that Congress “implicitly approved the broadest reasonable
`
`
`4 The Office recently proposed an amendment to 37 C.F.R. § 42.300(b),
`which would address Patent Owner’s argument regarding the claim
`construction standard. Amendments to the Rules of Practice for Trials
`Before the Patent Trial and Appeal Board; Proposed Rules, 80 Fed. Reg.
`50,720, 50,722, 50,743 (Aug. 20, 2015) (“Proposed Rules”). The
`amendment, however, is merely proposed and is not in effect.
`
`
`
`18
`
`

`
`CBM2015-00098
`Patent 5,940,510
`
`interpretation standard in enacting the AIA” and that the Office “properly
`adopted” the standard by regulation. Id. at 1278–79.
`In effect, Patent Owner asks us to use our authority under 37 C.F.R.
`§ 42.5(b) to “waive or suspend” 37 C.F.R. § 42.300(b). Even as

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