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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`UNITED SERVICES AUTOMOBILE ASSOCIATION,
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`Petitioner
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`v.
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`NADER ASGHARI-KAMRANI and KAMRAN ASGHARI-KAMRANI,
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`Patent Owners
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`
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`U.S. PATENT NO. 8,266,432
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`Case CBM2016-00063
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`PATENT OWNER’S RQUEST FOR
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`REHEARING UNDER 37 C.F.R. § 42.71
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`Mail Stop: PATENT BOARD
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`Patent Trial and Appeal Board
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`United States Patent and Trademark Office
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`P.O. Box 1450
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`Alexandria, VA 22313-1450
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`I.
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`INTRODUCTION
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`
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`Pursuant to 37 C.F.R. § 42.71, NADER ASGHARI-KAMRANI and
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`KAMRAN ASGHARI-KAMRANI (“Patent Owner”) hereby respectfully request
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`rehearing of the September 21, 2016 Decision, granting institution of CBM patent
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`review of U.S. Patent No. 8,266,432 (“the Decision”) (Paper 14).
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`II. LEGAL STANDARDS
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`37 C.F.R. § 42.71 (d) states:
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`(d) Rehearing. A party dissatisfied with a decision may file a single
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`request for rehearing without prior authorization from the Board. The
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`burden of showing a decision should be modified lies with the party
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`challenging the decision. The request must specifically identify all
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`matters the party believes the Board misapprehended or overlooked,
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`and the place where each matter was previously addressed in a motion,
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`an opposition, or a reply. ….
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`III. MATTERS MISAPPREHENDED OR OVERLOOKED
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`A. The Decision was an Abuse of Discretion by the Board’s
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`Misinterpretation of the Claim Scope and Misapplication of the Case Law.
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`1. The Board made an erroneous conclusion of law by overlooking
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`prior decisions that clarify the definition of “covered business method
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`patent.”
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`The PTAB has recently issued several decisions that were not considered in
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`this case that clarify the definition of a “covered business method patent.”
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`1
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`According to the decisions, the following factors weigh in favor of concluding that
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`a patent at issue is not a covered business method patent eligible for review: (1)
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`claims of general utility with (2) no explicit or inherent finance-related
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`terminology or limitations. See, e.g., Plaid Technologies Inc. v. Yodlee, Inc., Case
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`CBM2016-0037, slip op. at 7 (PTAB Aug. 16, 2016) (citations omitted). The
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`Decision in this case is inconsistent with these recent decisions.
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`At page 8, the Decision states (with emphasis added), “In short, the claimed
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`‘electronic transaction between the user and an external-entity’ encompasses sales
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`of goods or services in e-commerce, and the terms ‘user’ and ‘external-entity,’ as
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`Patent Owner has expressly defined them in the Specification, show that claim 1
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`pertains to the offering and consumption, of goods and services via an electronic
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`transaction between two parties.” (Decision, pg. 8.) However, merely asserting
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`that the claim terms encompass or pertain to sales or goods in e-commerce is not
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`sufficient to establish that the claim terminology is explicitly or inherently finance-
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`related. Accordingly, the Board’s institution of a CBMR in this case is erroneous
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`under the factors currently applied by the PTAB.
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`Further, Patent Owner respectfully submits that the Decision to institute the
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`CMBR is in error based on the above-identified factors. As argued previously,
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`claim 1 is devoid of any finance-related terminology or limitations. (Prelim. Resp.,
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`pp. 9–21.) The Board does not contend otherwise in the Decision. (Decision, p. 6.)
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`2
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`Nor has the Board identified any such explicit terminology or limitations in claim 1
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`(Id.) Thus, the terminology of claim 1 is not explicitly finance-related.
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`Moreover, the terminology of claim 1 does not inherently recite any finance-
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`related terminology or limitations. Inherency requires that an allegedly inherent
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`characteristic is necessarily present. In re Rijckaert, 9 F.3d 1531, 1534, 28
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`USPQ2d 1955, 1957 (Fed. Cir. 1993), Ex parte Levy, 17 USPQ2d 1461, 1464 (Bd.
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`Pat. App. & Inter. 1990). The Board determined that claim 1 is directed to a
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`financial product based on the interpretation of the limitation “during an electronic
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`transaction between the user and an external-entity” as a financial product.
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`(Decision, pp. 7-8.)
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`In claim 1, it is noted that the first “receiving step” and the “providing” step
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`are performed by the central-entity with the user; the “generating” step is
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`performed by the central-entity itself; and the second “receiving” step and the
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`“authenticating step” are performed by the central-entity with the external-entity.
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`In the second “receiving” step, it is recited that “which said dynamic code … was
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`provided to the external-entity by the user during the transaction.” However, this
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`activity of providing the dynamic code to the external-entity by the user does not
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`pertain to any activity of the electronic transaction between the user and the
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`external entity although it occurs during the electronic transaction like other
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`claimed steps performed by the central-entity. All of the limitations of claim 1
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`3
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`pertain to the user authentication method during the electronic transaction, not
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`pertaining to any activities of the electronic transaction.
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`Further, the Board has identified some implementations in the ‘432 Patent
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`directed to financial transactions. However, the Board overlooked alternative
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`implementations lacking any aspects directed to financial transactions. For
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`example, at column 3, lines 30-38, the ‘432 patent discloses: “This invention also
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`relates to a system and method provided by a Central-Entity for centralized
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`identification and authentication of users to allow them access to restricted web
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`sites … .” (emphasis added).
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`Additionally, with reference to FIG. 2, col 4, line 62 to col. 5, line 9 of the
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`‘432 Patent disclose (with emphasis added):
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`… During the registration phase, the user 10 provides his personal or
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`financial information to the Central-Entity 30. The user 10 registers at
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`the Central-Entity 30, 100, 104 and receives his account and login
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`information such as UserName and Password 108. User 10 can access
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`his account at any time by accessing the Central-Entity's system using
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`a communication network 50 and logging into the system.
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`Next is the transaction phase, where the user 10 attempts to access a
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`restricted web site or attempts to buy services or products 110, as
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`illustrated in FIG. 4, through a standard interface provided by the
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`External-Entity 20, similar to what exists today and selects digital
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`identity as his identification and authorization or payment option. The
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`External-Entity 20 displays the access or purchase authorization form
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`4
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`requesting the user 10 to authenticate himself using his UserName and
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`SecureCode as digital identity. …
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`As evident above, the ‘432 patent discloses implementations entirely
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`directed to “centralized identification and authentication of users to allow them
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`access to restricted web sites” and discloses alternative implementations directed
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`to “centralized identification and authentication of users to allow them to purchase
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`goods and services from an External-Entity.”
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`Accordingly, the terms of claim 1 are not necessarily directed to financial
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`transactions. Therefore, claim 1 does not inherently recite any finance-related
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`terminology or limitations.
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`2. The Decision relies on erroneous facts because the Board overlooked
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`implementations that are not financial-related and, consequently,
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`imported financially-related implementations into the claims from the
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`specification.
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`As discussed supra, the specification of the ‘432 Patent discloses some
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`financial-related implementations. However, it also discloses alternative
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`implementations that are entirely not financially-related, such as providing
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`personal information to the central entity and accessing a restricted website. (See,
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`e.g., Exh. 1001, FIG. 2, 3:30-34, and 4:62-50.) Indeed, not all restricted websites
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`are finance-related. (E.g., providing a username and password by a member of
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`Yahoo.com to access a restricted website for a chat room or a personal email
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`5
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`account.) In the Decision the Board conflated the different implementations and
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`only noted the financially-related aspects. Then, based solely on the financially-
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`related aspects, concluded that the above-noted claim terminology must be
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`financially-related. The Board’s conclusion is erroneous because limitations from
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`the specification cannot be imported into the claims. Superguide Corp. v. DirecTV
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`Enterprises, Inc., 358 F.3d 870, 875 (Fed. Cir. 2004). Rather, pursuant to 37 C.F.R.
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`§ 42.100(b), the Board must give a claim its broadest reasonable construction in
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`light of the specification. And, as detailed below, when the non-financial
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`implementations are considered, the broadest reasonable interpretation of the claim
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`terminology is not restricted to financial activities.
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`Notably, the PTAB has previously held that not all electronic transactions
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`are financial transactions. See J.P. Morgan Chase & Co. v. Intellectual Ventures II
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`LLC, CBM2014-00160. In the case, as detailed supra, not all implementations of
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`electronic transactions disclosed in the ‘432 Patent are financially-related. Rather,
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`the Specification consistently and repeatedly describes that the claimed method can
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`be used for authentication of a user in a non-financial context as well. (See, e.g.,
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`Ex. 1001, 1:35-37, 3:30-38, and 4:55-58.) Indeed, the ‘432 Patent lacks detailed
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`description as to steps for buying or selling products (e.g., steps for selecting goods
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`or paying the goods using credit cards) because such steps are not required parts of
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`the claimed authentication method. The Specification merely discloses these
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`6
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`general applications (e.g., “to get access to the restricted web sites or electronically
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`purchase desired goods or services”), as non-limiting and illustrative examples,
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`available after the claimed method is performed.
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`Further as recited in claim 4 (which was disclaimed) and claim 5, the
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`method of claim 1 can be used during a financial or a non-financial transaction.
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`Thus, the doctrine of claim differentiation emphasizes that claim 1 is much broader
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`than during a mere financial transaction.
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` For all the forgoing reasons, the implementations of the ‘432 patent directed
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`to financially-related activities are non-limiting examples that the Board imported
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`into the claims. Such importation is clearly erroneous and fails to give the claim
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`terminology its broadest reasonable interpretation in light of the disclosed
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`examples that are entirely non-financial implementations. Accordingly, the claim
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`interpretation set forth in the Decision relies on erroneous facts as to the scope of
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`the disclosure.
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`3. The Board misinterpreted the claimed invention as reciting
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`financially-related activities by misapplying SightSound.
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`At page 8 of the Decision, the Board concluded that claim 1 “recites a
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`method for performing data processing or other operations used in the practice,
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`administration, or management of a financial service” in view of SightSound
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`Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315 (Fed. Cir. 2015). The claim at
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`7
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`issue in SightSound recites, in part: “selling electronically by the first party to the
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`second party through telecommunications lines, the desired digital video or digital
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`audio signals in the first memory; and transferring the desired digital video or
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`digital audio signals from the first memory of the first party.” (emphasis added).
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`Thus, the claim in SightSound, explicitly recites the steps of selling and
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`transferring the desired digital video or digital signals to the buyer pertaining to
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`sales of goods. However, as set forth supra, claim 1 of ‘432 is devoid of any
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`explicit recitation of financially-related activities.
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`4. The Board misinterpreted the claimed invention as lacking general
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`utility by misapplying Blue Calypso.
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`At page 9 of the Decision, the Board cited Blue Calypso LLC v. Groupon,
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`Inc., 815 F.3d 1331, 1338–40 (Fed. Cir. 2016) and asserted that that claim 1 lacks
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`“general utility” because “the Specification of the ‘432 patent consistently
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`describes its purported invention as directed to a method and system for allowing
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`secured electronic sales transactions in e-commerce.” However, the Blue Calypso
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`court states, “[a]s the Board acknowledged, ‘the ‘055 patent repeatedly, and almost
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`exclusively discloses ‘incentive’ and ‘incentive program’ in a financial context.”
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`(emphasis added). Blue Calypso LLC v. Groupon, Inc., 815 F.3d 1331, 1339-1340
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`(Fed. Cir. 2016). In Blue Calypso, the Specification exclusively discloses the claim
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`term “subsidy” in a financial context.
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`8
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`As set forth supra, in contrast to Blue Calypso, the example implementations
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`disclosed in the ‘432 patent relate to “centralized identification and authentication
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`of users to allow them access to restricted web sites” and “centralized
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`identification and authentication of users to allow them to purchase goods and
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`services from an External-Entity.” (See, e.g., Exh. 1001, FIG. 2, 3:30-34, and 4:62-
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`50.) In other words, while some implementations of the disclosed invention are
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`directed to purchasing goods and services, other implementations are not.
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`Accordingly, the terms of claim 1 are not exclusively directed to financial
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`transactions.
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`Further, the Blue Calypso court states: “Blue Calypso relies on a handful of
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`Board decisions declining to institute CBM review on patents unrelated to the Blue
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`Calypso Patents. See … Sega of Am., Inc. v. Uniloc USA, Inc., CBM2014-00183
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`… J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, CBM 2014-00160.”
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`Blue Calypso LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016).
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`Further, the Blue Calypso court states: “Contrary to Blue Calypso’s argument, each
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`of these cases properly focuses on the claim language at issue and, finding nothing
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`explicitly or inherently financial in the construed claim language, declines to
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`institute CBM review.” Id. Thus, the Federal Circuit confirmed that the decisions
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`made in the Sega and J.P. Morgan Chase CBM proceedings are proper.
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`9
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`Patent Owner submits that the Board should have applied the “general
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`utility” test as applied by the J.P. Morgan Chase and other CBM proceedings as
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`cited by Patent Owner at page 12 of the Preliminary Response and as discussed on
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`pages 14-21 of the Preliminary Response. Patent Owner asserted that “the claims
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`of the ‘432 patent are of ‘general utility,’ i.e., they recite a particular novel
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`technique for authenticating a user during an electronic transaction between the
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`user and an external-entity without restricting the field of use of the claimed
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`invention to financial sector or financial activity.” Preliminary Response, pg. 12.
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`For all of the foregoing reasons, the Board abused its discretion by
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`mischaracterized the disclosure of the ‘432 patent, misinterpreting the claims to be
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`exclusively limited to a financial transaction. Further, the Board misapplied the
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`case law in SightSound and Blue Calypso. Patent Owner, therefore, respectfully
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`submits that the Board abused its discretion and requests that the Decision to
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`institute the CBMR of the ‘432 patent be withdrawn.
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`B. The Board committed a clear error in instituting the CMBR because
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`the Petitioner failed to establish that claim 1 lacks a technological feature
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`that is unpatentable over the cited art.
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`The Board’s determination, at pages 10-13 of the Decision, that the claimed
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`invention of the ‘432 does not recite a technological feature that is novel and non-
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`obvious over the prior art of record presented by Petitioner should be reconsidered.
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`10
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`In an inter partes review, the burden of persuasion is on the petitioner to
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`prove “unpatentability by a preponderance of the evidence,” 35 U.S.C. § 316(e),
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`and that burden never shifts to the patentee. “Failure to prove the matter as
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`required by the applicable standard means that the party with the burden of
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`persuasion loses on that point — thus, if the fact trier of the issue is left uncertain,
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`the party with the burden loses.” Id. at 1327; See also Dynamic Drinkware, LLC v.
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`Nat’l Graphics, Inc., 800 F.3d 1375, 1378-1379 (Fed. Cir. 2015).
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`In this case, the Petitioner had the ultimate burden to establish that it is more
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`likely than not that at least one of the claims challenged in the petition is
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`unpatentable. See 35 U.S. Code § 324. To establish this, Petitioner has the burden
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`to establish at least by a preponderance of the evidence that one or more of the
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`‘432 patent claims are not supported by the original disclosure of the second prior-
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`filed application or the third prior-filed application to assert Norefors as prior art.
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`However, Petitioner failed to do so. Petitioner merely compared certain limitations
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`– not all of the limitations – of the ‘432 patent claims with the specification of the
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`‘676 patent, not with the original disclosure of the ‘046 application (the second
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`prior-filed application). See Petition at 19-26. Moreover, Petitioner never provided
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`any substantive arguments by comparing limitations of the ‘432 patent claims with
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`the original disclosure of the third prior-filed application to demonstrate that the
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`‘432 patent claims are not entitled to the August 29, 2001 priority date of the first
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`11
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`prior-filed application. See Reply 1-5. Petitioner never properly demonstrated that
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`the ‘432 patent claims have no written description support from the original
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`disclosures of the second prior-filed application and the third prior-filed
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`application.
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`Further, Patent Owner showed that Norefors does not qualify as prior art
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`because the claims of the ‘432 patent are entitled to the priority date of the first
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`prior-filed application through the second prior-filed application or the third prior-
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`filed application. More specifically, Patent Owner at least provided substantive
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`arguments for independent claims 1, 25, 48 and 52 in view of the third prior-filed
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`application while Petitioner never provided such substantive arguments with
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`respect to this priority issue in view of the third prior-filed application. If the
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`independent claims are entitled to the priority date, then their dependent claims
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`would be patentable over the Norefors reference cited by Petitioner. Thus, there
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`was no need to provide arguments for each and every dependent claim, and also
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`such arguments could not be presented in the preliminary response for the word
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`limit. Although Patent Owner compared one limitation of claims 25 and 52 with
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`claim 46 of the patent issued from the third prior-filed application, it is presumed
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`that this limitation is supported by the original disclosure of the third prior-filed
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`application because the Examiner reviewed the patented claims during the
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`prosecution of the third prior-filed application in light of the specification.
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`12
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`Moreover, at least claims 1 and 48 were compared with the specification of the
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`patent issued from the third prior-filed application, and presented arguments that
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`these claims are entitled to the priority date of the first prior-filed application.
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`Thus, it is submitted that Petitioner failed to satisfy the burden of persuasion
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`that the ‘432 patent claims are not entitled to the priority date of the first prior-filed
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`application. Accordingly, Norefors does not qualify as prior art.
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`C. The Board committed a clear legal error in concluding that the claims
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`at issue are unpatentable over the cited art.
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`It is a clear error that the Board preliminarily determined that ‘432 patent
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`claims do not recite limitations which are non-obvious over Norefors in view of
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`Brown because it is well-established that obviousness is a question of law based on
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`facts determined by one of ordinary skill in the art at the time the invention was
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`made. See pre-AIA 35 U.S.C. 103(a). At least Norefors was not available at the
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`time the invention of the ‘432 patent was made to render the ‘432 patent claims as
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`obvious. More specifically, at least the institution of the CBMR on the proposed
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`obviousness rejection of claims 4, 9–11, 14, 28, 43, 46, 49, and 53 is incorrect as a
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`matter of law.
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`Moreover, the Board should not apply the regulation “that is novel and
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`unobvious over the prior art” of 37 C.F.R. § 42.301(b) to the present case where
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`the invention date of the ‘432 patent antedates that of the Norefors reference.
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`13
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`Norefors’ constructive invention date is June 18, 2003 on its record, which is a pre-
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`AIA 102(b) reference in accordance with Petitioner’s assertion. If Norefors is a
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`pre-AIA 102(a) or 102(e) reference, it would not be prior art in the present case
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`because the invention date of the ‘432 patent antedates that of Norefors. Although
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`it is a pre-AIA 102(b) reference, Patent Owner submits that it is an abuse of
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`discretion to determine that Congress intended to strictly apply the novelty
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`requirement of 37 C.F.R. § 42.301(b) to determine whether the invention is
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`technological when the invention date of the patent at issue antedates that of the
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`prior art, rather it emphasized on the technical aspect of the invention, and the
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`statutes does not include such language “novel and non-obvious of the invention”
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`but only states “except that the term does not include patents for technological
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`inventions.” AIA § 18(d)(1).
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`For the foregoing reasons, Patent Owner submits that the Board’s
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`determination that the claims of the ‘432 patent do not recite technical features that
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`are novel and non-obvious in light of the Norefors reference should be
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`reconsidered, and the arguments presented in the Patent Owner’s Preliminary
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`Response, at pages 23-31, for the second prong of 37 C.F.R. § 42.301(b), should be
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`14
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`further considered.
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`D. Petition to accept an Unintentionally Delayed Benefit Claim Granted.
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`Patent Owner advises the Board that the Office granted a Petition to Accept
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`an Unintentionally Delayed Benefit Claim in the ‘432 Patent. This Petition was
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`granted on September 19, 2016, received by Patent Owner on September 21, 2016,
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`and submitted to the Board on September 23, 2016 as Exhibit 2006. This benefit
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`claim establishes a second chain of priority to the filing date of the first prior-filed
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`application through the third prior-filed application. Patent Owner requests that the
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`Board exercise its discretion to reconsider the priority date of the claims of the
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`‘432 patent in view of the third prior-filed application.
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`IV. CONCLUSION
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`For the foregoing reasons, Patent Owner submits that the Board has abused
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`its discretion and requests that the Board decline to institute the CBM review of the
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`‘432 patent.
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`Respectfully submitted,
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` /Jae Youn Kim/
`Jae Youn Kim; Reg. No. 69,215
`Lead Counsel for Petitioner
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`October 5, 2016
`NOVICK, KIM & LEE, PLLC
`3251 Old Lee Highway Suite 404
`Fairfax, VA 22030
`Tel: 1-703-745-5495; Fax: 1-703-563-9748
`skim@nkllaw.com
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`15
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. §42.6(e)(1), this is to certify that I caused to be served
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`a copy of the foregoing “PATENT OWNER’S REQUEST FOR REHEARING” via
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`electronic mail on October 5, 2016 to the Petitioner’s counsel of record at the
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`following email addresses:
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`W. Karl Renner, Lead Counsel
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`Thomas Rozylowicz, Back-up Counsel
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`CBM36137-0007CP1@fr.com
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`PTABInbound@fr.com
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`Respectfully submitted,
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`__/Jae Youn Kim/_______
`Jae Youn Kim
`NOVICK, KIM & LEE, PLLC
`3251 Old Lee Highway Suite 404
`Fairfax, VA 22030
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`Tel: 1-703-745-5495
`Fax: 1-703-563-9748
`skim@nkllaw.com
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`16
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`Date: October 5, 2016