IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`COMPASS BANK, AMERICAN EXPRESS COMPANY, AMERICAN EXPRESS
`TRAVEL RELATED SERVICES COMPANY, INC., DISCOVER FINANCIAL
`SERVICES, DISCOVER BANK, DISCOVER PRODUCTS INC., NAVY FEDERAL
`CREDIT UNION, AND STATE FARM MUTUAL AUTOMOBILE INSURANCE
`COMPANY
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner.
`
`Case No. To Be Assigned
`
`Patent No. 6,105,013
`SYSTEM FOR COMMUNICATING
`DATA SECURELY
`______________________________________________________________________________
`
`DECLARATION OF PETER ALEXANDER, PH.D.
`
`COMPASS EXH. 1021 - Page 1 of 71
`
`

`

`V.
`VI.
`
`VII.
`
`B.
`
`I.
`II.
`III.
`IV.
`
`QUALIFICATIONS ............................................................................................................1
`MATERIALS CONSIDERED ............................................................................................3
`LEVEL OF ORDINARY SKILL AND RELEVANT TIME..............................................4
`LEGAL STANDARDS .......................................................................................................5
`A.
`Anticipation..............................................................................................................5
`B.
`Obviousness .............................................................................................................5
`OVERVIEW OF THE ’013 PATENT.................................................................................6
`CLAIM CONSTRUCTION...............................................................................................14
`A.
`“microcontroller based secure transaction integrated circuit” and “secure
`transaction integrated circuit”................................................................................15
`“modular exponentiation accelerator circuit…for performing encryption
`and decryption calculations”..................................................................................15
`“script programming language”.............................................................................16
`C.
`“transaction groups”...............................................................................................19
`D.
`CERTAIN REFERENCES DISCLOSE OR SUGGEST ALL OF THE
`CLAIMED FEATURES OF THE ’013 PATENT.............................................................19
`A.
`Prior Art Overview ................................................................................................19
`1.
`The Sudia Reference (Ex. 1005)................................................................19
`2.
`The Hawkes Reference (Ex. 1006) ............................................................21
`3.
`The Axelson Reference (Ex. 1007)............................................................25
`4.
`The Lancaster Reference (Ex. 1008) .........................................................25
`5.
`The Lee Reference (Ex. 1009)...................................................................26
`Sudia Renders Obvious Claims 1-4, 6-12 and 14-16 of the ‘013 Patent
`Under 35 U.S.C. § 103...........................................................................................26
`1.
`Motivation to Combine..............................................................................26
`2.
`Claim Chart................................................................................................30
`Hawkes Renders Obvious Claims 1-4, 6-12, and 14-16 of the ’013 Patent
`Under 35 U.S.C. § 103...........................................................................................46
`1.
`Motivation to Combine..............................................................................46
`2.
`Claim Chart................................................................................................48
`Claim 5 is Obvious Under 35 U.S.C. § 103 in Light of Hawkes or Sudia
`Alone or in Combination with One or More of Axelson or Lancaster ..................62
`Hawkes and/or Sudia and Lee Render Obvious Claim 13 Under 35 U.S.C.
`§ 103.......................................................................................................................65
`1.
`Motivation to Combine..............................................................................65
`2.
`Claim Chart................................................................................................66
`VIII. CONCLUDING STATEMENTS ......................................................................................69
`
`Table of Contents
`
`i
`
`B.
`
`C.
`
`D.
`
`E.
`
`COMPASS EXH. 1021 - Page 2 of 71
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`

`

`I, Peter Alexander, declare and state as follows:
`1.
`The petition names Compass Bank, American Express Company, American Express
`Travel Related Services Company, Inc., Discover Financial Services, Discover Bank, Discover
`Products Inc., Navy Credit Federal Credit Union, and State Farm Mutual Automobile Insurance
`Company as real parties-in interest. I have been retained by American Express Company,
`American Express Travel Related Services Company, Inc., Compass Bank, Discover Financial
`Services, Discover Bank, Discover Products Inc., Navy Credit Federal Credit Union, and State
`Farm Mutual Automobile Insurance Company (collectively “Petitioners”) as an expert witness in
`this case to offer my opinions on U.S. Patent No. 6,105,013 (“the ’013 Patent”). I am being
`retained at my customary rate of $525/hour. I have no financial interest in, or affiliation with,
`the Petitioners, real parties-in-interest, or the patent owner, which I understand to be Maxim
`Integrated Products, Inc. My compensation is not dependent upon the outcome of the present
`covered business method patent review or any related litigation proceedings.
`2.
`As preparation for forming opinions expressed in this declaration, I reviewed the ’013
`Patent prosecution history, specification and claims, and the materials discussed below.
`I.
`QUALIFICATIONS
`3.
`My academic credentials include a Ph.D. from the Massachusetts Institute of Technology
`in Electrical Engineering, a Masters degree from the University of Illinois (Urbana) in Electrical
`Engineering, and a Bachelors degree in Electrical Engineering from the University of Canterbury
`(New Zealand). My Curriculum Vitae, attached separately as Ex. 1022 to the Petition, lists my
`prior engagements where I have testified as an expert witness for at least the last 4 years, and a
`list of my publications authored in at least the last 10 years.
`4.
`My academic degrees are all in Electrical Engineering. While undertaking my Doctorate
`work at MIT I worked in the Research Lab. for Electronics that has for decades contributed to
`basic research in information theory, coding, and statistical estimation theory. My Ph.D. thesis
`was in the field of statistical estimation theory as applied to communications systems.
`5.
`As indicated in my Curriculum Vitae, my experience in computer technology design and
`development spans more than 35 years. I have been a designer of computer systems for
`processing, storage and display of data since 1974. In the 1970s, I worked with, among others,
`products in Intel’s various lines of microprocessor and microcontrollers. In the first few years I
`was a university professor teaching graduate and undergraduate electrical engineering courses -
`including the design and programming of computers. Along with a group of young graduate
`students I developed a microprocessor system for industrial control applications in 1974 using
`the Intel 4004 CPU chip as the base component.
`6.
`When I entered the computer industry in the mid-1970s I developed special software and
`custom hardware systems for government agencies such as the Defense Communications
`Agency, Naval Research Labs, and National Security Agency. For most of that period I held a
`Secret security clearance and programmed microprocessor computers for use in defense systems.
`Typically these systems were used for radar and sonar systems deployed by the military. My
`design efforts involved both software and computer hardware architecture and involved custom
`hardware implementations using commercial CPU and digital signal processing (“DSP”) chips.
`
`1
`
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`

`

`During this phase I developed many systems based on commercial microprocessor and DSP
`chips from Motorola, Intel and Texas Instruments.
`7.
`My contract work with the DSP systems developed for the National Security Agency
`resulted in the commercialization of a high speed computer system. During the 1980s I founded
`a company that sold these high performance machines as commercial products, a company called
`Numerix Corporation. I formulated the system design and programmed a significant portion of
`the application software that ran on the machines. During this decade I was also spearheading
`efforts to migrate the discrete integrated circuits (“IC”) hardware implementations into gate
`arrays – a form of custom chip that was in vogue during that time period. I was the chief
`architect of the systems that we built and personally formulated all the key bus, memory and
`processor interconnections. At that time I had roughly 20 hardware engineers and 30 software
`engineers reporting to me.
`8.
`The high-performance processor products were sold to companies like Standard Oil of
`Ohio in Dallas, Texas to process seismic field data collected for oil exploration as well as to US
`government agencies as commercial off-the-shelf products. For example, some of our systems
`provided processing for sonar systems used to track Soviet submarines in the Pacific Ocean.
`Others were used in military radar systems for missile tracking by RCA. Numerix Corporation
`was acquired in 1989 by a Boston company called Mercury Computer Systems that continues to
`sell digital signal processing solutions to US government agencies.
`9.
`In the mid-1990s I focused my career more on business–oriented software development.
`For example I directed the efforts of approximately 100 software developers and Quality
`Assurance personnel while employed at Platinum Software in the mid to late 1990s. The
`software systems were “client-server” business applications such as finance, manufacturing and
`sales force automation. At that time those applications were being adapted to web server
`implementations in order to allow our customers to access the same content through a web
`browser running on a client computer.
`10.
`Then in the period 1999-2003 I was responsible for teams of 50 or more web site
`developers at companies such as CareerPath.com (now merged with the CareerBuilder.com site).
`As such I have had a rich and in-depth exposure to many forms of computer applications
`involving the display of web pages on client computers. My work in web site design led to a
`hands-on knowledge of cryptographic systems for secure access and user authentication. My
`experience in this domain results from having designed and created two different commercial
`web sites that required extensive engineering effort to support secure e-commerce transactions.
`For example while running a development team of about 15 people at InfrastructureWorld.com
`as Chief Technology Officer I engineered a hardened web site that provided extraordinary levels
`of security for the high-dollar business transactions. The web server implementations were
`designed to support authentication through Public Key certificates, user access control via
`authenticated account login, Secure Sockets Layer (“SSL”) extranet connections, and document
`encryption.
`11.
`Similarly, while at Syntricity, Inc. in San Diego, CA as Vice President, Technical
`Operations, I designed and developed a secure Application Services Provider (ASP) Internet
`system to host a hundred or so corporate customers, allowing them secure access to tools for
`
`2
`
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`

`

`transfer of data files and analysis of semiconductor yield data. This web site used secure FTP for
`high-speed data transfers, SSL for secure web site access, and user authentication.
`12.
`In addition I have served as a technical expert in several contract and patent lawsuits
`involving cryptographic components. Briefly, these include Dongjin Semichem Co., Ltd. v.
`EmailFund, Inc., which involved an effort to implement wireless security software technology in
`handheld wireless devices. The concept was to use the Elliptic Curve Digital Signature
`Algorithm (ECDSA) to perform the functions of user authentication, non-repudiation, integrity
`and cryptographic primitives in a single integrated circuit that could be integrated into a smart
`phone. I have also contributed as a technical expert in cases such as: Adobe Systems, Inc. v.
`Wowza Media Systems, Inc. that involved Diffie-Hellman key exchange for flash media
`delivery; VirnetX Inc. v. Cisco Systems, Inc. and Apple Computer, Inc. that involved the SSL
`protocol, IPSec Internet packet encryption, Public Key cryptography authentication and
`encryption techniques using Digital Certificates; and, Leon Stambler v. Amazon.com, Inc., et al.
`that involved Point of Sale authentication systems in the early 1990s.
`13.
`In those efforts I frequently relied on documents referred to or directly related to those
`used to support this petition, namely Diffie-Hellman key exchange and the Diffie-Hellman U.S.
`Patent 4,200,770 from 1977 (“DH Key Exchange”), the Rivest Shamir Adleman (“RSA”) U.S.
`patent 4,405,829, also from 1977, and numerous documents and books published by Price and
`Davies, the British POS terminal authentication pioneers.
`14.
`In summary, I believe I am qualified to testify on the subjects of secure financial
`transactions and the implementation of cryptographic applications such as authentication, non-
`repudiation, and message integrity programmed into physical devices such as smart cards and
`tokens using microprocessors or application specific ICs.
`II.
`MATERIALS CONSIDERED
`15.
`I have reviewed each of the following:
`a.
`U.S. Patent No. 6,105,013 (“the ’013 Patent”) entitled “Method, apparatus,
`system and firmware for secure transactions” issued to Stephen M. Curry et al on
`August 15, 2000, including the claims, description and prosecution history (which
`are identified in the Petition respectively as Exhibits 1001 and 1002);
`U.S. Patent No. 6,237,095 (“the ’095 Patent”), which is related to the ‘013 Patent
`and claims priority to the same application as the ‘013 Patent, including the
`claims, description and prosecution history of the ‘095 Patent (Exs. 1003 and
`1004);
`U.S. Patent No. 5,799,086 entitled “Enhanced cryptographic system and method
`with key escrow feature” to Frank Wells Sudia issued on August 25, 1998 from
`an application filed on January 13, 1994 (Ex. 1005; hereinafter, “Sudia”);
`Integrated Circuit Cards, Tags, and Tokens by P.L. Hawkes, et al. (1990) (Ex.
`1006; hereinafter “Hawkes”), which includes:
`Preface by P.L. Hawkes (hereinafter, “Hawkes Preface”);
`i.
`
`b.
`
`c.
`
`d.
`
`3
`
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`

`

`ii.
`
`iv.
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
`
`j.
`
`iii.
`
`Chapter 1: Introduction to Integrated Circuit Cards, Tags and Tokens for
`Automatic Identification by P.L. Hawkes (hereinafter, “Hawkes
`Chapter 1”);
`Chapter 6: Secure Transactions with an Intelligent Token by W.L. Price
`and Bernard J. Chorley (hereinafter, “Hawkes Chapter 6”); and
`Chapter 8: Cryptography and the Smart Card by D.W. Davies
`(hereinafter, “Hawkes Chapter 8”);
`Jan Axelson, The Microcontroller Idea Book (1994) (Ex. 1007, hereinafter
`“Axelson”);
`Don Lancaster, A Flying Car Newsletter; Photopolymer Resources; Amateur
`Television Books; Royalty-Free Real PostScript!; BASIC Stamp Microcontroller,
`4 HARDWARE HACKER 66 (July 1993) (Ex. 1008, hereinafter “Lancaster”);
`U.S. Patent No. 5,210,846 entitled “One-Wire Bus Architecture” issued to R.D.
`Lee on May 11, 1993 from an application filed on May 15, 1989 (Ex. 1009;
`hereinafter “Lee”);
`Texas Instruments, TMS7000 Family Microarchitecture User’s Guide (1982) (Ex.
`1010);
`Russ Hersch, Microcontroller primer and FAQ, USENET posting (Jan. 26, 1994),
`available at http://www.cs.cmu.edu/Groups/AI/html/faqs/ai/microcontroller-
`faq/primer/faq.html (Ex. 1011);
`Petition for Covered Business Method Patent Review Under 35 U.S.C. §§ 321-
`329 and § 18 of the Leahy-Smith America Invents Act, Case CBM2014-178, JP
`Morgan Chase & Co., and JP Morgan Chase Bank, N.A. (“Chase”), Petitioner.
`(U.S. Patent No. 6,105,013) (Ex. 1013);
`Declaration of Stephen D. Bristow in support of Chase Petition for Covered
`Business Method Review of U.S. Patent No. 6,105,013 (Ex. 1014);
`Institution of Covered Business Method Patent Review Decision, Case
`CBM2014-179, Chase, Petitioner (U.S. Patent No. 5,940,510) (Ex. 1012);
`Report and Recommendation regarding claim construction in In re: Maxim
`Integrated Prods., Inc. MDL No. 2354, Misc. No. 12-244-JFC (W.D. Pa.) (Ex
`1015; hereinafter “R&R”) and Correction to Report and Recommendation (Ex.
`1016; hereinafter “R&R Correction”); and
`Opinion and order regarding claim construction in In re: Maxim Integrated
`Prods., Inc. MDL No. 2354, Misc. No. 12-244-JFC (W.D. Pa.) (Ex 1017;
`hereinafter “CC Op.”).
`LEVEL OF ORDINARY SKILL AND RELEVANT TIME
`III.
`It is my opinion that a person of ordinary skill in the art at the time of the inventions
`16.
`claimed in the ’013 Patent would have had at least a B.S. degree in electrical engineering or
`computer engineering with at least two years of practical or post-graduate work in the areas of
`
`k.
`
`l.
`
`m.
`
`n.
`
`4
`
`COMPASS EXH. 1021 - Page 6 of 71
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`

`

`A.
`
`secure financial transactions and real-time microcontroller programming, or, alternatively, an
`additional year (at least three years) of postgraduate or professional experience in computer
`systems engineering related to secure data transactions, or the equivalent. I was a person of at
`least ordinary skill in this art in the time period from 1994 to 1996. I remain a person of at least
`ordinary skill in this art today.
`17.
`The basis for my familiarity with the level of ordinary skill is my interaction with large
`numbers of workers in the computing field who were at this level of skill. The pertinent art was
`the configuration and arrangement of commercially available computer components, networks,
`systems and software to satisfy particular customer specifications, together with such
`programming as might be necessary to tie the components together and operate in the desired
`manner.
`18.
`In reaching my opinion as to the hypothetical person of ordinary skill in the art, I have
`considered the types of problems encountered in the art, the prior art solutions to those problems,
`the rapidity with which innovations are made, the sophistication of the technology, and the
`educational level and professional capabilities of workers in the field.
`IV.
`LEGAL STANDARDS
`Anticipation
`It is my understanding that a claim may be invalid as anticipated under 35 U.S.C. § 102 if
`19.
`each and every element of a claim, as properly construed, is disclosed either explicitly or
`inherently in a single prior art reference, subject to the limitations imposed by § 102 in
`paragraphs a-g. Under the principles of inherency, if the prior art necessarily functions in
`accordance with, or includes the claimed limitations, it anticipates. Persons of ordinary skill
`need not recognize the inherent characteristics or functioning of the prior art. In addition, a new
`scientific explanation for the functioning of the prior art does not render the old apparatus,
`composition, or method patentable. Such a reference, if it contained each and every element of a
`claim, would anticipate the claim.
`B.
`Obviousness
`Regarding the legal doctrine of obviousness, my understanding is as follows. A claim
`20.
`may be invalid even if each and every claim limitation is not present or disclosed in a single
`prior-art reference. Under the doctrine of obviousness, a claim may be invalid if the differences
`between the invention and the prior art are such that the subject matter as a whole would have
`been obvious at the time the invention was made to a person having ordinary skill in the art to
`which the subject matter pertains. A person of ordinary skill in the art is presumed to have
`knowledge of the relevant prior art at the time of the claimed invention.
`21.
`Obviousness is based on the scope and content of the prior art, the differences between
`the prior art and the claim, the level of ordinary skill in the art, and secondary indicia of
`obviousness and non-obviousness to the extent such indicia exist. The scope of the prior art
`comprises any prior art that was reasonably pertinent to the particular problems the inventor
`faced.
`The determination of whether the asserted claims would have been obvious to a person of
`22.
`ordinary skill in the art and, therefore, invalid, is not governed by any rigid test or formula. A
`determination that a claim is obvious is, instead, based on a common sense determination that the
`
`5
`
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`claimed invention is merely a combination of known limitations to achieve predictable results.
`Any of the following rationales are acceptable justifications to conclude that a claim would have
`been obvious: the claimed invention is simply a combination of known prior art methods to
`yield predictable results; the claimed invention is a simple substitution of one known element for
`another to obtain predictable results; the claimed invention uses known techniques to improve
`similar devices (methods, or products) in the same way; the claimed invention applies a known
`technique to a known device (method, or product) ready for improvement to yield predictable
`results; the claimed invention was “obvious to try”—choosing from a finite number of identified,
`predictable solutions, with a reasonable expectation of success; there is known work in one field
`of endeavor that may prompt variations of it for use in either the same field or a different one
`based on design incentives or other market forces if the variations would have been predictable
`to one of ordinary skill in the art; or there is some teaching, suggestion, or motivation in the prior
`art that would have led one of ordinary skill in the art to modify the prior art reference to
`combine prior art teachings to arrive at the claimed inventions.
`23.
`In addition, a claim can be obvious in light of a single reference, without the need to
`combine references, if the elements of the claim that are not found in the reference can be
`supplied by the common sense or knowledge of one of ordinary skill in the art.
`24.
`An analysis of whether a claimed invention is obvious must not rely on a hindsight
`combination of prior art. The analysis must proceed in the context of the time of the invention or
`claimed priority date and consider whether the invention as a whole would have been obvious to
`a person of ordinary skill in the art, taking into consideration any interrelated teachings of the
`prior art, the effects of demands known to the design community or present in the marketplace,
`and the background knowledge possessed by a person having ordinary skill in the art, all in order
`to determine whether there was an apparent reason to combine any known elements in the
`fashion claimed by the patent at issue.
`V.
`OVERVIEW OF THE ’013 PATENT
`25.
`The ’013 Patent entitled “Method, apparatus, system and firmware for secure
`transactions” issued to Stephen M. Curry et al on August 15, 2000. The application that resulted
`in the ’013 Patent, Appl. No. 09/041,190 was filed on March 10, 1998. The application for the
`’013 Patent was a continuation of application No. 08/594,983, file on Jan. 31, 1996, now Pat. No.
`5,748,740. The ‘013 Patent claims priority to Provisional Appl. No. 60/004,510, filed September
`29, 1995.
`26.
`The ’013 Patent specification discloses an electronic module used for secure transactions
`and various service provider applications for that module. ‘013 Patent, Abstract. From the
`specification it can be understood that a “service provider” is an organization that relies on or
`utilizes the functionality of a portable device containing cryptographic authentication and data
`encryption primitives. Examples given by the ’013 Patent specification include (1) Secure Email
`(Id. 5:1-6:40); (2) Digital Notary Service (Id. 6:42-7:61); (3) Digital Cash Dispenser (Id. 7:63-
`10:21); (4) Digital Cash Replenishment (Id. 10:23-59); (5) Technique for Software Authorization
`and Usage Metering (Id. 12:35-13:10); (6) Postal Metering Service (Id. 13:55-14:50); Registry
`with Guaranteed Private Key Security to support merchant transactions with consumers; and (7)
`Subscription Information Service (Id. 14:52-16:18). Thus, the ’013 Patent envisions
`applicability over a wide range of secure applications.
`
`6
`
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`

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`The ’013 Patent specification disclosures of service provider applications include
`27.
`merchant-customer financial transactions.
`2. Usage
`When a Merchant wishes to obtain positive identification of an End User over the Internet or
`other network, the Merchant generates a unique packet of data and transmits it to the End User,
`and the End User passes the data into the input object and invokes the transaction script 44 which
`causes it to be encrypted with the private key generated by the module 10. The resulting
`encrypted packet is transmitted back to the Merchant. The Merchant then accesses the data base
`provided by the Service Provider to obtain the public key belonging to the End User, and attempts
`to decrypt the encrypted packet using the End User's public key. If the decryption succeeds, the
`Merchant has proven the physical presence of the End User's module 10 at the remotely
`networked location. By guaranteeing the presence of the End User's module 10 at the remote site,
`this identification validates and legitimizes the contents of the data packet and therefore also any
`financial transactions, represented by the contents of the packet, that may be requested by the End
`User.
`The model described here is one in which the authority to perform financial transactions derives
`from the registry maintained by the Service Provider. It is therefore essential that this information
`be accurate and that the private key in the module 10 can be secure from all parties. Because each
`module 10 has its own unique RSA key set, there is no provision in this model for the module 10
`to represent money independently of the registry maintained by the Service Provider. Instead, the
`registry and the ability of the module 10 to sign with its private key together serve as a definitive
`means of identifying the End User remotely to any other party.
`Id. 15:54-16:18.
`28.
`The claims of the ’013 Patent generally recite “a microcontroller based secure transaction
`integrated circuit” comprised of a microcontroller core connected to a math coprocessor capable
`of handling complex mathematics of encryption and decryption. See ’013 Patent independent
`claims 1 and 9.
`
`7
`
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`

`Id. Figure 1.
`29.
`Figure 1 illustrates the components of the claimed “secure transaction integrated circuit,”
`which the specification also calls a module. The module 10 includes a microprocessor /
`microcontroller 12, a math coprocessor / modular exponentiation accelerator 18 for processing
`encryption and decryption calculations, a memory circuit 20, an input/output circuit 26, a real
`time clock 14 for time stamping, and energy circuitry 34. Id. at 2:34-3:9. The patent does not
`describe these components beyond their basic functions or preferences. Further, all of the
`components of the claimed module were readily understood by a person of ordinary skill before
`the ‘013 Patent was filed and were well known and readily available components for use in
`generic computers or other integrated circuit devices.
`a.
`The “microcontroller core” is described to be a generic microprocessor, such as
`“preferably an 8-bit microprocessor, but could be 16, 32, 64 or any operable
`number of bits.” Id. at 2:48-51. The “microcontroller core” is also described to be
`“a general-purpose, 8051-compatible micro controller 12 or a reasonably similar
`product.” Id. at 3:22-24.
`The “math coprocessor”/ “modular exponentiation accelerator” is described as
`being “designed and used to handle very large numbers. In particular, the
`coprocessor will handle the complex mathematics of RSA encryption and
`decryption” or other types of math intensive encryption or decryption techniques.
`Id. at 2:54-57, 30:1-2. The specification identifies a known type of math
`coprocessor called “a high-speed modular exponentiation accelerator for large
`integers (math coprocessor).” Id. at 3:25-26. As seen in the references cited by
`the ’013 Patent itself, coprocessors for acceleration of encryption/decryption
`operations were well known at the time of the filing of the ’013 Patent
`
`b.
`
`8
`
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`

`

`e.
`
`f.
`
`c.
`
`d.
`
`application. See, e.g., references to commercially available encryption/decryption
`coprocessors “SGS-Thompson Microelectronics CMOS Crypto Computer
`Family” datasheet ST16xF74 , Oct., 1993 and “CMOS MCU Based Safeguarded
`Smartcard IC with Modular Aritmetic Processor,”datasheet ST16CF54, Sep.
`1994.
`The “memory circuit” is described as being able to “contain both read-only-
`memory and non-volatile random-access-memory” and “volatile memory,
`EPROM, SRAM and a variety of other types of memory circuitry could be used
`to create an equivalent device.” Id. at 2:58-63. A person of ordinary skill in the
`art would understand this to refer to any form of memory in the module.
`The “input/output circuit” enables “bidirectional communication with the
`module.” Id. at 2:66-67. A person of ordinary skill in the art would understand
`this to refer to any circuit for communicating with the module.
`The “real time clock circuit” is generally understood to be a clock that keeps track
`of the date and/or time. Id. at 2:52-53.
`The “energy circuit may be necessary to maintain [stored information] in the
`memory circuitry 20 and/or aid in powering the other circuitry in the module 10.
`The energy circuit 34 could consist of a battery, capacitor, R/C circuit,
`photovoltaic cell, or any other equivalent energy producing circuit or means.” Id.
`at 3:5-9.
`In other aspects of the ’013 Patent the claims are directed towards “a plurality of
`30.
`transaction groups wherein each said transaction group can comprise a transaction program
`created by a service provider.” Id. 30:2-5. These programs are described in the specification as
`sequences of commands that are applied to different objects in the system such as private and
`public keys stored in memory.
`The fundamental concept implemented by the firmware is that the Service Provider can store
`transaction scripts 44 in a transaction group 40 to perform only those operations among objects
`that he wishes the End User to be able to perform.
`Id. 4:45-48.
`31.
`For example monetary transactions using the module are disclosed by the specification.
`The module serves as a digital wallet that can generate, on demand, certificates that are
`equivalent to cash because they attest to the fact that digital money on the module was decreased
`in value by an amount corresponding to the certificate. A “Service Provider” in this embodiment
`is a bank.
`2. Exemplary Monetary Transactions Using The Module
`Monetary transactions using the module 10 and digital certificates are somewhat more
`complicated because digital data, unlike Federal Reserve Notes, can be copied and duplicated
`easily. Nevertheless, the use of "SALTs" and transaction sequence numbers can guarantee the
`authenticity of digital certificates. (In the following discussion, it is assumed that every party to
`the transaction has its own RSA key set with a private key that it is able to keep secret.)
`Id. 9:13-21.
`
`9
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`COMPASS EXH. 1021 - Page 11 of 71
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`Figure 6 of the ’013 Patent describes the digital money application. Specifically, Figure
`32.
`6 provides an exemplary technique for preparing a module for monetary transactions while
`Figure 7 is an exemplary technique for using the module as a digital wallet.
`
`Id. Figure 6.
`
`10
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`COMPASS EXH. 1021 - Page 12 of 71
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`Id. Figure 7.
`33.
`The following description indicates the flow of preparing a module for financial
`transactions. The module is loaded with a transaction group containing transaction scripts by the
`Service Provider and made available to an end user. When the user participates in a merchant
`transaction the script contained in the locked transaction object is used to process objects stored
`in the module. For example, the transaction amount might be subtracted from the money object
`stored in the Service Provider’s transaction group.
`a. Referring to FIG. 6, the Service Provider (bank) prepares the module 10 by creating a
`transaction group 40 containing a money object r