IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`JPMORGAN CHASE & CO.
`AND JPMORGAN CHASE BANK, N.A.
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner.
`
`Case No. To Be Assigned
`Patent No. 6,105,013
`
`
`
`
`
`
`
`
`
`
`
`
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW
`UNDER 35 U.S.C. §§ 321-329 AND § 18 OF THE LEAHY-SMITH AMERICA
`INVENTS ACT
`
` SV: 80786-8
`
`COMPASS EXH. 1013 - Page 1 of 80
`
`

`
`Docket No. 020358.0206-US04
`
`TABLE OF CONTENTS
`I. MANDATORY NOTICES (37 C.F.R. § 42.8(a)(1)) ...................................... 1
`
`A.
`
`B.
`
`C.
`
`D.
`
`Real Party-In-Interest (37 C.F.R. § 42.8(b)(1)) ....................................... 1
`
`Related Matters (37 C.F.R. § 42.8(b)(2)) ................................................. 3
`
`Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3)) ................................ 7
`
`Service Information (37 C.F.R. § 42.8(b)(4)) .......................................... 8
`
`II.
`
`FEES (37 C.F.R. § 42.203) ................................................................................. 8
`
`III. REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. §
`42.304 .................................................................................................................. 8
`
`A. Grounds for Standing (37 C.F.R. § 42.304(a)) ........................................ 8
`
`1.
`
`2.
`
`3.
`
`Eligibility Requirements of 37 C.F.R. § 42.302.......................... 11
`
`Timing Requirements of 37 C.F.R. § 42.303 .............................. 11
`
`The ’013 Patent is a Covered Business Method Patent .............. 11
`
`Citation of Prior Art ................................................................................ 22
`
`Claims and Statutory Grounds (37 C.F.R. §§ 42.304(b)(1) &
`(b)(2)) ...................................................................................................... 24
`
`Claim Construction (37 C.F.R. § 42.304(b)(3)) ..................................... 25
`
`Person of Ordinary Skill in the Art ........................................................ 26
`
`Unpatentability of the Construed Claims (37 C.F.R.
`§ 42.304(b)(4)) ........................................................................................ 27
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`G.
`
`Supporting Evidence (37 C.F.R. § 42.304(b)(5)) .................................. 27
`
`IV. SUMMARY OF THE ’013 PATENT ........................................................... 27
`
`A. Overview of the ’013 Patent ................................................................... 27
`
`B.
`
`Prosecution History Summary of the ’013 Patent ................................. 29
`
`- i -
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`COMPASS EXH. 1013 - Page 2 of 80
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`

`
`Docket No. 020358.0206-US04
`
`V. AT LEAST ONE CLAIM OF THE ’013 PATENT IS
`UNPATENTABLE .......................................................................................... 30
`
`A.
`
`Prior Art .................................................................................................. 30
`
`1.
`
`2.
`
`3.
`
`Hawkes Chapters (Ex. 1003) ....................................................... 31
`
`Blandford (Ex. 1004) ................................................................... 34
`
`Lancaster (Ex. 1005) .................................................................... 35
`
`B.
`
`Ground I: Combination of Hawkes Chapters Renders Obvious
`Claims 1-3, 6, 8, 9, 11, 12, 14 and 15 Under 35 U.S.C. § 103. ............. 36
`
`C. Ground II: Combination of Hawkes Chapters and Blandford
`Renders Obvious Claims 4 and 10 Under 35 U.S.C. § 103. .................. 53
`
`D. Ground III: Combination of Hawkes Chapters and Lancaster
`Renders Obvious Claim 5 Under 35 U.S.C. § 103. ............................... 56
`
`E.
`
`Ground IV: Claims 1-6, 8-12, 14, and 15 Fail to Claim Patentable
`Subject Matter Under 35 U.S.C. § 101 .................................................. 58
`
`1.
`
`2.
`
`A Secure Transaction Using Encryption Is an Abstract Idea ..... 59
`
`The Generic Structure Recited in the ’013 Patent Does Not
`Amount to an Inventive Concept ................................................. 62
`
`VI. CONCLUSION ................................................................................................ 69
`
`- ii -
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`COMPASS EXH. 1013 - Page 3 of 80
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`

`
`Docket No. 020358.0206-US04
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Agilysys, Inc. v. Ameranth, Inc.,
`CBM2014-00014, Paper No. 19 ......................................................................... 13
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`573 U.S. ____ (2014), slip op. .....................................................................passim
`
`Apple, Inc. v. SightSound Tech., LLC,
`Case No. CBM2013-00019..........................................................................passim
`
`Bilski v. Kappos,
`561 U. S. 593 (2010) ........................................................................................... 58
`
`Bloomberg Inc. v. Markets-Alert PTY Ltd.,
`CBM2013-00005, Paper No. 18 ......................................................................... 19
`
`CRS Advanced Techs., Inc. v. Frontline Techs., Inc.,
`CBM2012-00005, Paper 17 .................................................................... 12, 13, 16
`
`Diamond v. Diehr, 450 U.S. 175 (1981) .................................................................. 69
`
`Dystar Textilfarben GMBH & Co. Deutschland KG v. C.H. Patrick
`Co., 464 F.3d 1356 (Fed. Cir. 2006) ................................................................... 41
`
`Experian Mktg. Solutions, Inc. v. RPost Commc’n Ltd.,
`CBM2014-00010, Paper 20 ................................................................................ 14
`
`Gates Learjet Corp. v. Duncan Aviation,
`851 F.2d 303 (10th Cir. 1988) .............................................................................. 9
`
`Leapfrog Enterprises, Inc. v. Fisher-Price, Inc.,
`485 F.3d 1157 (Fed. Cir. 2007) .......................................................................... 41
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co.,
`CBM2012-00003, Paper 15 ................................................................................ 20
`
`Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
`566 U.S. ___ (2012), slip op. .................................................................. 58, 59, 69
`
`- iii -
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`COMPASS EXH. 1013 - Page 4 of 80
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`

`
`Docket No. 020358.0206-US04
`
`Parker v. Flook,
`437 U.S. 584 (1978) ................................................................................ 58, 61, 67
`
`PNC Bank N.A. et al. v. Maxim Integrated Prods, Inc.,
`CBM2014-00040, Paper No. 3 ............................................................................. 1
`
`PNC Fin. Servs. Grp., Inc. v. Intellectual Ventures I LLC,
`CBM2014-00032, Paper 13 ................................................................................ 15
`
`SAP Am., Inc. v. Versata Dev. Grp., Inc.,
`CBM2012-00001, Paper 36 ................................................................................ 13
`
`State of Ala. ex rel. Siegelman v. U.S. E.P.A.,
`911 F.2d 499 (11th Cir. 1990) .............................................................................. 9
`
`Volusion, Inc., v. Versata Software, Inc.,
`CBM2013-00018, Paper No. 8 ........................................................................... 13
`
`Statutes
`35 U.S.C. § 101 .................................................................................................passim
`
`35 U.S.C. § 102 ................................................................................22, 23, 31, 34, 35
`
`35 U.S.C. § 103 ...................................................................................... 24, 36, 53, 56
`
`35 U.S.C. § 321(c) ................................................................................................... 11
`
`35 U.S.C. § 324(a) ................................................................................................... 30
`
`35 U.S.C. §325 ............................................................................................. 1, 8, 9, 10
`
`35 U.S.C. §328(a) .................................................................................................. 8, 9
`
`Other Authorities
`
`37 C.F.R. § 42.6 ......................................................................................................... 1
`
`37 C.F.R. § 42.8 .............................................................................................. 1, 3, 6, 7
`
`37 C.F.R. § 42.15(b) .................................................................................................. 8
`
`37 C.F.R. § 42.203 ...................................................................................................... 7
`
`37 C.F.R. § 42.205 ..................................................................................................... 1
`
`- iv -
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`COMPASS EXH. 1013 - Page 5 of 80
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`

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`Docket No. 020358.0206-US04
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`37 C.F.R. § 42.300(b) .............................................................................................. 24
`
`37 C.F.R. § 42.301 ....................................................................................... 11, 15, 20
`
`37 C.F.R. § 42.302 ............................................................................................... 8, 11
`
`37 C.F.R. § 42.303 ................................................................................................... 11
`
`37 C.F.R. § 42.304 ......................................................................................... 8, 24, 26
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) ......................................................... 12
`
`77 Fed. Reg. 48,735 (Aug. 14, 2012)....................................................................... 12
`
`77 Fed. Reg. 48,755, 48,759 (Aug. 14, 2012) ........................................................... 3
`
`77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012) ............................................. 16, 19, 25
`
`18A Charles Allan Wright, Arthur R. Miller & Edward H. Cooper,
`Federal Practice & Procedure §4449 (2d ed. 2011)........................................ 9, 10
`
`
`
`
`
`- v -
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`COMPASS EXH. 1013 - Page 6 of 80
`
`

`
`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
`
`Docket No. 020358.0206-US04
`
`LIST OF EXHIBITS
`
`
`Description
`U.S. Patent No. 6,105,013
`File History for U.S. Patent No. 6,105,013
`Certain chapters contained in INTEGRATED CIRCUIT CARDS, TAGS
`AND TOKENS (P.L. Hawkes et al. eds., 1990) (collectively, the
`“Hawkes Chapters”):
`• P.L. Hawkes, Preface and Introduction (“Hawkes Preface
`& Introduction”);
`• A.R. Lessin, Smart Card Technology – A US Pioneer’s
`Viewpoint (“Hawkes Ch. 2”);
`• J. McCrindle, A Contactless Smart Card and Its
`Applications (“Hawkes Ch. 3”);
`• 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”)
`Int’l Pub. No. WO 92/12485 to R. Blandford (“Blandford”)
`Don Lancaster, A Flying Car Newsletter; Photopolymer
`Resources; Amateur Television Books; Royalty-Free Real
`PostScript!; BASIC Stamp Microcontroller, 4 HARDWARE
`HACKER 66 (“Lancaster”)
`Complaint, Maxim Integrated Prods., Inc. v. JPMorgan Chase &
`Co., Case No. 2:12-cv-01641-JFC (Oct. 1, 2012 E.D. Tex.)
`Special Master’s Report and Recommendation Re: Claim
`Construction, In re Maxim Integrated Prods, Inc., Case No. 2:12-
`mc-244, MDL No. 2354 (Oct. 9, 2013, W.D. Pa.)
`Memorandum Opinion (re: claim construction), In re Maxim
`Integrated Prods, Inc., Case No. 2:12-mc-244, MDL No. 2354
`(Dec. 17, 2013, W.D. Pa.)
`Transcript of Proceedings, In re Maxim Integrated Prods, Inc.,
`Case No. 2:12-mc-244, MDL No. 2354 (Mar. 20, 2013, W.D. Pa.)
`May 21, 2014 email from PNC withdrawing from Joint Defense
`Group
`Stipulation of Dismissal, In re Maxim Integrated Prods, Inc.,
`Case No. 2:12-mc-244, MDL No. 2354 (May 21, 2014, W.D. Pa.)
`JPMorgan Chase & Co., Form 10-K, Fiscal Year Ended Dec. 31,
`2013
`
`- vi -
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`COMPASS EXH. 1013 - Page 7 of 80
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`

`
`Docket No. 020358.0206-US04
`
`Exhibit
`Ex. 1013
`
`Ex. 1014
`Ex. 1015
`Ex. 1016
`
`Ex. 1017
`Ex. 1018
`
`Description
`The PNC Financial Services Group, Inc., Form 10-K, Fiscal Year
`Ended Dec. 31, 2013
`Declaration of Steven Bristow
`Curriculum Vitae of Steven Bristow
`Rivest, et al., A Method for Obtaining Digital Signatures and
`Public-Key Cryptosystems, 21 COMMUNICATIONS OF THE ACM, 2,
`120 (1978)
`U.S. Patent No. 4,900,904
`U.S. Patent No. 4,864,618
`
`- vii -
`
`COMPASS EXH. 1013 - Page 8 of 80
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`

`
`Docket No. 020358.0206-US04
`
`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 JPMorgan Chase & Co. and JPMorgan Chase Bank,
`
`N.A. (collectively “Chase”).
`
`A previous petition for Covered Business Method patent review of the same
`
`patent was filed on November 22, 2013. PNC Bank N.A. et al. v. Maxim
`
`Integrated Prods, Inc., CBM2014-00040, Paper No. 3. The petitioners and real
`
`parties-in-interest in that review proceeding were PNC Bank, N.A. (“PNC”) and
`
`Chase. The Board denied the Petition on June 3, 2014 because before the petition
`
`was filed, PNC had filed a declaratory judgment action challenging the validity of
`
`the subject patent. CBM2014-00040, Paper No. 19. The Board based its decision
`
`on 35 U.S.C. §325(a)(1), which provides that “A post-grant review may not be
`
`instituted . . . if, before the date on which the petition for such a review is filed, the
`
`petitioner or a real party in interest filed a civil action challenging the validity of a
`
`claim of the patent.”
`
`Prior to the Board’s dismissal of the petition, PNC had requested adverse
`
`judgment on April 1, 2014, CBM2014-00040, Paper No. 11, and had settled the
`
`litigation with the Patent Owner as of May 23, 2014. CBM2014-00040, Paper No.
`
`16. Nevertheless, the Board concluded that PNC had already exerted substantial
`
`- 1 -
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`COMPASS EXH. 1013 - Page 9 of 80
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`

`
`Docket No. 020358.0206-US04
`
`control over the proceedings by its joint filing of the petition and that an adverse
`
`judgment against PNC would not obviate that control. CBM2014-00040, Paper
`
`No. 19 at 4. The Board thus dismissed the petition in its entirety, while noting that
`
`“We express no opinion regarding the likelihood that any party other than PNC
`
`would prevail in establishing that any of the challenged claims are unpatentable for
`
`the reasons set forth in the Petition.” Id. at 3. The Board made no decision on the
`
`merits of the patentability of any claim of the subject patent.
`
`
`
`PNC has had no participation or control in the filing of this Petition and is
`
`not a real party-in-interest in this proceeding. PNC has no interest in the outcome
`
`of this proceeding in light of the fact that PNC has settled the controversy with
`
`Patent Owner over the validity of the subject patent and the civil litigation between
`
`PNC and Patent Owner has been dismissed. Ex. 1011, Stipulation of Dismissal.
`
`Chase retained different counsel to prepare the present Petition from the counsel
`
`who prepared the previous Petition. Furthermore, PNC and Chase are two entirely
`
`separate and unrelated corporate entities with no common ownership (other than
`
`some number of public stockholders who may own shares in both banks) and no
`
`common control. See Ex. 1012, JPMorgan Chase & Co., Form 10-K for 2013; Ex.
`
`1013, PNC Financial Services Group, Form 10-K for 2013.
`
`As the Trial Practice Guide points out, “at a general level, the ‘real party-in-
`
`interest’ is the party that desires review of the patent. Thus, the ‘real party-in-
`
`- 2 -
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`COMPASS EXH. 1013 - Page 10 of 80
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`

`
`Docket No. 020358.0206-US04
`
`interest’ may be the petitioner itself, and/or it may be the party or parties at whose
`
`behest the petition has been filed.” 77 Fed. Reg. 48755, 48759 (Aug. 14, 2012). In
`
`this case, the only party that desires review of the patent is Chase, and this Petition
`
`is not in any sense filed at the “behest” of PNC, who has no interest in the validity
`
`of the subject patent. No party other than Chase has funded, directed or controlled
`
`the filing or the content of this Petition. See id. at 48760 (pointing out that “a party
`
`that funds and directs and controls an IPR or PGR petition or proceeding
`
`constitutes a ‘real party-in-interest.’”). Furthermore, as the Trial Practice Guide
`
`notes, a mere association between two parties or participation in a joint defense
`
`arrangement (which was the case before PNC settled with Patent Owner) is not
`
`normally sufficient to qualify the associated parties as “real parties-in-interest” to
`
`one another. Id. In fact, as of May 21, 2014, PNC and Chase are no longer co-
`
`signatories to any joint defense agreement with respect to the subject patent. Ex.
`
`1010, Email from PNC withdrawing from Joint Defense Group.
`
`B. Related Matters (37 C.F.R. § 42.8(b)(2))
`U.S. Patent No. 6,105,013 (“the ’013 Patent”) is currently the subject of
`
`
`
`litigation against multiple defendants, including the action captioned Maxim
`
`Integrated Prods., Inc. v. JPMorgan Chase & Co., No. 2:12-cv-01641-JFC (W.D.
`
`Pa.) (the “JPMC Litigation”). The ’013 Patent has also been asserted in 17 other
`
`cases consolidated into multidistrict litigation as In re: Maxim Integrated Prods., Inc.
`
`- 3 -
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`COMPASS EXH. 1013 - Page 11 of 80
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`

`
`Docket No. 020358.0206-US04
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`MDL No. 2354, Misc. No. 12-244-JFC (W.D. Pa.) (“MDL Litigation”). However, as
`
`of the filing date of this Petition, several of those cases have been terminated from the
`
`MDL proceedings as indicated below:
`
`• PNC Fin. Servs. Grp., Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`00089-JFC (W.D. Pa.) (Terminated)
`
`• KeyCorp v. Maxim Integrated Prods., Inc., No. 2:12-cv-00860-JFC
`
`(Terminated)
`
`• Vanguard Grp., Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00862-JFC
`
`(Terminated)
`
`• Jack Henry & Assocs., Inc. v. Maxim Integrated Prods., No. 2:12-cv-00863-
`
`JFC (Terminated)
`
`• Maxim Integrated Prods., Inc. v. Comerica Inc., No. 2:12-cv-00869-JFC
`
`• Fidelity Brokerage Servs. LLC v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`00871-JFC (Terminated)
`
`• Maxim Integrated Prods., Inc. v. First United Bank & Trust Co., No. 2:12-cv-
`
`00876-JFC (Terminated)
`
`• Maxim Integrated Prods., Inc. v. Starbucks Corp., No. 2:12-cv-00877-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. Expedia, Inc., No. 2:12-cv-00878-JFC
`
`(Terminated)
`
`- 4 -
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`COMPASS EXH. 1013 - Page 12 of 80
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`

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`Docket No. 020358.0206-US04
`
`• Maxim Integrated Prods., Inc. v. Capital One Fin. Corp., No. 2:12-cv-00879-
`
`JFC (Terminated)
`
`• Maxim Integrated Prods., Inc. v. Bank of the West, No. 2:12-cv-00880-JFC
`
`• Maxim Integrated Prods., Inc. v. Groupon, Inc., No. 2:12-cv-00881-JFC
`
`• Maxim Integrated Prods., Inc. v. Union Bank, N.A., No. 2:12-cv-00882-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. Southwest Airlines, Co., No. 2:12-cv-00883-
`
`JFC (Terminated)
`
`• Chipotle Mexican Grill, Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`00887-JFC (Terminated)
`
`• Maxim Integrated Prods., Inc. v. QVC, Inc., No. 2:12-cv-00891-JFC
`
`(Terminated)
`
`• Clairmail Inc. v. Maxim Integrated Prods., Inc., No. 2:12-cv-00923-NBF
`
`(Terminated)
`
`• Branch Banking & Trust Co. v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`00945-JFC
`
`• BMO Harris Bank Nat’l Ass’n v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`01538-JFC
`
`• Deutsche Bank AG v. Maxim Integrated Prods., Inc., No. 2:12-cv-01604-JFC
`
`- 5 -
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`COMPASS EXH. 1013 - Page 13 of 80
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`

`
`Docket No. 020358.0206-US04
`
`• Maxim Integrated Prods., Inc. v. Citigroup, Inc., No. 2:12-cv-01628-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. Target Corp., No. 2:12-cv-01629-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. Wells Fargo & Co., No. 2:12-cv-01639-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. Bank of Am. Corp., No. 2:12-cv-01640-JFC
`
`(Terminated)
`
`• Maxim Integrated Prods., Inc. v. U.S. Bancorp, No. 2:12-cv-01642-JFC
`
`• Maxim Integrated Prods., Inc. v. Walmart Stores, Inc., No. 2:12-cv-01643-JFC
`
`(Terminated)
`
`The ’013 Patent has also been asserted in Maxim Integrated Prods., Inc. v. Branch
`
`Banking & Trust Co., 4:12‐cv‐00369‐RAS (E.D. Tex.).
`
`The ’013 Patent claims priority to Provisional Application No. 60/004,510,
`
`filed September 29, 1995. A Petition for Covered Business Method Review of U.S.
`
`Patent No. 6,237,095, which claims priority to the same provisional application, has
`
`been filed by Petitioner on even date herewith.
`
`- 6 -
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`COMPASS EXH. 1013 - Page 14 of 80
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`

`
`Docket No. 020358.0206-US04
`
`C. Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3))
`Lead Counsel
`Back-up Counsel
`
`Andrea G. Reister (Reg. No. 36,253)
`
`Jay I. Alexander (Reg. No. 32,678)
`
`areister@cov.com
`
`jalexander@cov.com
`
`Postal and Hand-Delivery Address:
`
`Postal and Hand-Delivery Address:
`
`Covington & Burling LLP
`
`Covington & Burling LLP
`
`1201 Pennsylvania Avenue, NW
`
`1201 Pennsylvania Avenue, NW
`
`Washington, DC 20004
`
`Washington, DC 20004
`
`T: (202)662-5141; F: (202)778-5141
`
`T: (202) 662-5622; F: (202) 778-5622
`
`Additional Back-up Counsel
`
`Gregory S. Discher (Reg. No. 42,488)
`
`
`
`
`
`gdischer@cov.com
`
`Postal and Hand-Delivery Address:
`
`Covington & Burling LLP
`
`1201 Pennsylvania Avenue, NW
`
`Washington, DC 20004
`
`T: (202) 662-5485; F: (202) 778-5485
`
`
`
`- 7 -
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`COMPASS EXH. 1013 - Page 15 of 80
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`

`
`Docket No. 020358.0206-US04
`
`Service Information (37 C.F.R. § 42.8(b)(4))
`
`D.
`Service information for lead and back-up counsel is provided in the
`
`designation of lead and back-up counsel above.
`
`II.
`
`FEES (37 C.F.R. § 42.203)
`
`The undersigned authorizes the Office to charge $30,000 ($12,000 request fee;
`
`and $18,000 post-institution fee) to Deposit Account No. 50-0740 for the fees set
`
`forth in 37 C.F.R. § 42.15(b) for this Petition for Covered Business Method Patent
`
`Review. 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.
`
`III. REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. § 42.304
`A. Grounds for Standing (37 C.F.R. § 42.304(a))
`Pursuant to 37 C.F.R. § 42.304(a), the ’013 Patent is eligible for CBM
`
`review (“CBMR”) because Petitioner meets the eligibility requirements of 37
`
`C.F.R. § 42.302 and the ’013 Patent is a covered business method patent.
`
`Moreover, Chase cannot be estopped from maintaining the present Petition
`
`by virtue of the Board’s decision to deny Covered Business Method review of the
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`subject patent in CBM2014-00040, Paper No. 19. Congress specifically defined
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`the circumstances under which a party may be estopped from requesting or
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`maintaining a post-grant review proceeding such as the instant CBM Petition in 35
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`U.S.C. §325(e)(1). Estoppel cannot arise under Section 325(e)(1) unless the Board
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`COMPASS EXH. 1013 - Page 16 of 80
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`

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`Docket No. 020358.0206-US04
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`previously issued a “final written decision under Section 328(a).” By its terms, a
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`final written decision under Section 328(a) can exist only in cases where “a post-
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`grant review is instituted and not dismissed.” 35 U.S.C. §328(a). The Board’s
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`decision in CBM2014-00040 cannot qualify as such a “final written decision”
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`because it was a decision denying the petition in that proceeding. The Board was
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`careful to point out in its order that it “express[ed] no opinion regarding the
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`likelihood that any party other than PNC would prevail in establishing that any of
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`the challenged claims are unpatentable for the reasons set forth in the Petition.”
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`Id., Paper No. 19 at 3. This statement constitutes an implicit recognition that
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`another Petition, filed by a different real party-in-interest, could be maintained.
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`Chase is also not barred by 35 U.S.C. §325(a)(1) because Chase has not
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`previously filed a civil action challenging the validity of the ’013 Patent. As
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`discussed above, PNC, a petitioner in CBM2014-00040, previously filed such a
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`civil action but is not a real party-in-interest in this proceeding. Chase is also not
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`barred under Section 325(a)(1) by the Board’s decision in CBM2014-00040
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`because the ground for dismissal was based on PNC’s conduct, not Chase’s
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`conduct. It is a well-accepted common law principle that “a party is bound only as
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`to matters … litigated as to him rather than between other parties alone.” 18A
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`Charles Allan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice &
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`Procedure §4449 (2d ed. 2011) (“Wright & Miller”). See also, e.g., State of Ala. ex
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`COMPASS EXH. 1013 - Page 17 of 80
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`

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`Docket No. 020358.0206-US04
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`rel. Siegelman v. U.S. E.P.A., 911 F.2d 499, 503 (11th Cir. 1990); Gates Learjet
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`Corp. v. Duncan Aviation, 851 F.2d 303, 305 (10th Cir. 1988). In the previous
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`proceeding, the basis of the denial of the petition was an issue litigated between
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`Patent Owner and PNC alone: PNC’s previous filing of a declaratory judgment
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`action that created a bar under Section 325(a)(1) as to PNC. That bar could not
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`have applied, and was not applied, to Chase individually in the previous
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`proceeding and no reason exists to apply it here.
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`Patent Owner may argue that Chase is barred even though it was not a
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`previous declaratory judgment plaintiff because Chase was a real party-in-interest
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`in the CBM2014-00040 proceeding that was dismissed by the Board under Section
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`325(a)(1) due to PNC’s declaratory judgment filing. Patent Owner may argue that
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`some vague policy against the same party being involved in multiple CBM review
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`proceedings against the same patent counsels against allowing this Petition to
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`proceed. That argument would be unavailing because the plain language of the
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`only possible applicable statutory provisions—35 U.S.C. §325(e)(1) and
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`325(a)(1)—does not apply to Chase.
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`Moreover, viewing this argument simply from a policy standpoint, the Board
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`did not institute the prior proceeding and thus made no adjudication on the merits
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`of the validity of the ’013 Patent and expended no effort or resources in
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`considering those merits. Chase has therefore not had its “day in court” on the
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`COMPASS EXH. 1013 - Page 18 of 80
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`

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`Docket No. 020358.0206-US04
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`merits of the validity of the ’013 Patent and this Petition is in no sense
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`“duplicative” of the previous proceeding.
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` See Wright & Miller, §4449
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`(referencing “[o]ur deep-rooted historic tradition that everyone should have his
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`own day in court”). Congress took care to prevent duplicative proceedings when it
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`designed the statutory provisions of the AIA. In so doing, it balanced the interests
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`of Patent Owners and Petitioners by expressly requiring that for a subsequent
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`proceeding to be estopped, a final written decision on the merits must have
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`occurred in a previously instituted proceeding. No estoppel can arise here because
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`this Petition does not fit within the situation defined by Congress as giving rise to
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`estoppel.
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`Eligibility Requirements of 37 C.F.R. § 42.302
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`1.
`Petitioner has been sued for infringement of the ’013 Patent in the JPMC
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`Litigation, Ex. 1006 (Complaint), and, as discussed above, is not estopped from
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`challenging the claims on the grounds identified in the present petition.
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`Timing Requirements of 37 C.F.R. § 42.303
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`2.
`The requirements of 35 U.S.C. § 321(c) cannot be met for the ’013 Patent.
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`As such, a petition requesting covered business method patent review of the ’013
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`Patent may be filed at any time.
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`The ’013 Patent is a Covered Business Method Patent
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`3.
`The AIA and USPTO rules define a “covered business method patent” as “a
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`patent that claims a method or corresponding apparatus for performing data
`
`- 11 -
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`COMPASS EXH. 1013 - Page 19 of 80
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`

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`Docket No. 020358.0206-US04
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`processing or other operations used in the practice, administration, or management
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`of a financial product or service, except that the term does not include patents for
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`technological inventions.” AIA § 18(d)(1); see also 37 C.F.R. § 42.301(a). The
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`statutory scheme sets forth a two-part test to determine whether a patent is eligible
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`for CBMR: (1) the patent must claim a method or apparatus for performing data
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`processing or other operations used in the practice, administration, or management
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`of a financial product or service, and (2) the claimed invention cannot be a
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`technological invention. A patent need have only one claim directed to a covered
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`business method to be eligible for review, even if the patent includes additional
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`claims. Google, Inc. v. Inventor Holdings, LLC, CBM2014-00002, Paper No. 16, 6
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`(citing 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012)). The ’013 Patent meets both
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`parts of the test and is thus eligible for CBMR.
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`a)
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`The Challenged Claims Are Directed to a “Financial
`Product or Service”
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`The Board has stated that “financial product or service” should be
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`“interpreted broadly.” Apple Inc. v. SightSound Techs., LLC, CBM2013-00020,
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`Paper No. 14, 11. It encompasses patents claiming “activities that are financial in
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`nature, incidental to a financial activity or complementary to a financial activity.”
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`CRS Advanced Techs., Inc. v. Frontline Techs., Inc., CBM2012-00005, Paper 17, 7
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`(quoting 77 Fed. Reg. 48,735 (Aug. 14, 2012)). Patents are eligible for CBMR if
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`they cover “any ancillary activities related to a financial product or service,
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`COMPASS EXH. 1013 - Page 20 of 80
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`

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`Docket No. 020358.0206-US04
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`including . . . marketing, customer interfaces, Web site management and
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`functionality, transmission or management of data, servicing, underwriting,
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`customer communications, and back office operations-e.g., payment processing,
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`stock clearing.” Statement of Sen. Schumer, 157 Cong. Rec. S1364–65 (daily ed.
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`Mar. 8, 2011).
`
`The Board has explained that a patent that “relates to a commercial
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`transaction . . . is itself financial in nature” Volusion, Inc., v. Versata Software,
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`Inc., CBM2013-00018, Paper No. 8, 6, and that “the term financial is an adjective
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`that simply means relating to monetary matters.” SAP Am., Inc. v. Versata Dev.
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`Grp., Inc., CBM2012-00001, Paper 36, 23. The Board has also held that “[t]he
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`electronic sale of something, including charging a fee to a party’s account, is a
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`financial activity, and allowing such a sale amounts to providing a financial
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`service.” Apple, CBM2013-00020, Paper No. 14 at 11. Here, the claims, the
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`specification, and the patent owner’s litigation history all show the ’013 Patent is
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`directed to a financial product or service.
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`Starting with the claims, claim 14, which depends from independent claim 9,
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`recites “[t]he secure transaction integrated circuit of claim 9, wherein said
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`transaction program can enable said secure transaction integrated circuit to
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`perform digital cash transactions.” ’013 Patent, Claim 14 (emphasis added).
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`The performance of digital cash transactions clearly relates to “monetary matters”
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`COMPASS EXH. 1013 - Page 21 of 80
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`

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`Docket No. 020358.0206-US04
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`and qualifies the patent for CBM review. See CRS, CBM2012-00005, Paper 17 at
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`7. In a recent case, the Board held that a claim directed to “payment processing”
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`meets the financial product or service requirement. Agilysys, Inc. v. Ameranth,
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`Inc., CBM2014-00014, Paper No. 19, 11. Here, the performance of digital cash
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`transactions is a form of payment processing. Thus, the plain language of the
`
`claim shows that it is directed to a financial product or service.
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`The language of claim 14 alone is dispositive because, in determining
`
`whether a patent is eligible for CBMR, “the focus is on the claims.” Agilysys,
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`CBM2014-00014, Paper No. 19 at 10. Moreover, an examination of the
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`specification of the ’013 Patent confirms that the claimed invention is directed to
`
`the practice of a financial product or service. The abstract of the patent states, “the
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`present invention relates to an electronic module . . . capable of passing
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`information back and forth between a service provider’s equipment via a secure,
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`encrypted technique so that money and other valuable data can be securely
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`passed electronically.” ’013 Patent, Abstract (emphasis added); see also id. at
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`1:26-29 (“The module can be configured to . . . authorize monetary transactions.”).
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`The spec