`______________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
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`United Services Automobile Association,
`Petitioner,
`v.
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`NADER ASGHARI-KAMRANI and KAMRAN ASGHARI-KAMRANI,
`Patent Owner
`______________________
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`Case CBM2016-00064
`Patent 8,266,432
`______________________
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`PETITIONER’S REPLY TO PATENT OWNER’S ADDITIONAL BRIEF
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`CBM2016-00064
`Patent 8,266,432
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`The ’432 patent (“the ‘432”) qualifies for covered business method (“CBM”)
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`review (“CBMR”). The AIA defines a CBM patent as “a patent that claims a method
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`or corresponding apparatus for performing data processing or other operations
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`used in the practice, administration, or management of a financial product or ser-
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`vice” (emphasis added). AIA § 18(d)(1); see also 37 C.F.R. § 42.301. The Federal
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`Circuit’s decision in Secure Axcess, LLC v. PNC Bank Nat’l Ass’n et al. reiterates
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`the holding in Unwired Planet, LLC v. Google Inc., that patent claims “incidental to
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`a financial activity or complementary to a financial activity” are beyond the scope
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`of CBMR, but also endorses the “financial in nature” interpretation for CBM eligi-
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`bility provided in Blue Calypso v. Groupon Inc. See Secure Axcess, 848 F.3d 1370,
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`1380-81 (Fed. Cir. 2017); Unwired Planet, 841 F.3d 1376, 1379-82 (Fed. Cir. 2016),
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`cf. Blue Calypso, 815 F.3d 1331, 1340 (Fed. Cir. 2016). Significantly, the Board’s
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`Institution Decision (“ID”) and decision denying rehearing in this case are wholly
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`consistent with Secure Axcess, interpreting the claims in light of the specification to
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`conclude that the ‘432 is eligible for CBMR. See SecureAxcess, 848 F.3d at 1378.
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`Indeed, Patent Owner’s (“PO”) briefing completely disregards the explicit
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`definitions of the claim terms “user” and “external entity” provided in the ‘432 spec-
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`ification (and adopted in the ID) as well as PO’s own constructions for those terms.
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`Thus, PO’s briefing is flawed as it fails to account for claim construction. To make
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`its new arguments, PO’s most recent constructions differ from not only PO’s own
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`1
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`CBM2016-00064
`Patent 8,266,432
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`prior asserted constructions, the ID, and from the explicit definitions in the ‘432
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`specification, which are all financial in nature, but also from the actual language of
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`the claims (e.g., the PO now contends that the claimed method is “a prerequisite for
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`an electronic transaction,” however, the claims and ID provide that each step is per-
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`formed “during the [electronic] transaction.”) More specifically, PO originally pro-
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`posed constructions for the term “user” as “a person or business consuming goods
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`and services” and for the term “external-entity” as a “party offering goods or ser-
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`vices in e-commerce and needs to authenticate the users based on digital identity.”
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`Paper 22, 3, 6 (emphases added). Also probative to the meaning of these claim terms,
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`several explicit definitions from within the ‘432 reveal that these claims are finan-
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`cial-in-nature. For example, a “user” is “both a typical person consuming goods and
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`services as well as a business consuming goods and services” and an “External-En-
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`tity” is “any party offering goods or services that users utilize by directly providing
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`their UserName and SecureCode as digital identity,” where “such entity could be a
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`bank or a credit card issuing company.” USAA-1001, 2:10-12, 19-21, 25-26; see
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`also 3:4-6 (“External-Entity” is “any party offering goods or services in e-com-
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`merce and needs to authenticate the users based on digital identity.”). Further, the
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`‘432 specification reveals that “transactions” are conducted “in e-commerce.”
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`USAA-1001, 2:54-55, 3:31-32. Even PO’s expert confirmed the financial nature of
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`CBM2016-00064
`Patent 8,266,432
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`the ‘432. USAA-1068, 77:10-78:6 (confirming that the ‘432 and its claims are re-
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`lated to “financial transactions in the buying and selling of products and services”).
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`Through the prosecution history of the ‘432, and throughout PO’s attempts to
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`allege that either the ‘676 patent or the ‘129 patent provide written description sup-
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`port for the claims of the ‘432, PO has cited to specific financial entities or fi-
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`nance-related activities as corresponding to the claimed entities of the ‘432.
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`USAA-1002, 617; Paper 22, 14-15, 21, 23; Paper 11, 43. Irreconcilable with the
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`argument that the ‘432 claims are not limited to financial transactions, PO admits
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`that the ‘129 Patent does not explicitly disclose non-financial transactions. USAA-
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`1068, 123:12-15. PO cannot have it both ways.
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`The Board’s analysis from the ID is in accordance with Secure Axcess, deter-
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`mining CBM eligibility by applying the above claim term constructions to ascertain
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`the scope of the claims. Further, the claims in Secure Axcess were substantially dif-
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`ferent than the claims here. The claims of the ‘432 are directed to a method or appa-
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`ratus “for authenticating a user during an electronic transaction between the user and
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`an external-entity,” and requires each recited step or function to be performed “dur-
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`ing the transaction.” Ex. 1001, 6:24–26. Applying the claim constructions advanced
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`by PO, claim 1 recites a method for authenticating a person or business consuming
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`goods and services during an electronic transaction in e-commerce between the per-
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`son or business consuming goods and services and a party offering goods or services
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`CBM2016-00064
`Patent 8,266,432
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`in e-commerce. Further, each recited step of the claimed method is required to be
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`performed during the electronic transaction in e-commerce between the person or
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`business consuming goods and services and the party offering goods or services in
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`e-commerce. Thus, the claims, properly construed, require the finance-related activ-
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`ity of offering, and consumption, of goods and services via an electronic transaction
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`between two parties. See SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315
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`(Fed. Cir. 2015) (financial activity (e.g., electronic sales of digital audio) not directed
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`to money management or banking can constitute a “financial product or service”
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`within the meaning of the statute). By contrast, in Secure Axcess, illustrative claim
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`1 was directed to a “method” including “transforming…received data by inserting
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`an authenticity key to create formatted data…to locate a preferences file.”
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`Secure Axcess does not change, but rather reinforces, that the Federal Circuit
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`has “declined to limit the application of CBM review to patent claims tied to the
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`financial sector.” Blue Calypso, 815 F.3d at 1338; Versata Dev. Grp. Inc. v. SAP
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`Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015) (concluding that the statute “on its
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`face covers a wide range of finance-related activities” and that “the definition of
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`‘covered business method patent’ is not limited to products and services of only the
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`financial industry…” but also includes those that are “financial in nature”); see also
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`Secure Axcess, 848 F.3d at 1381. The Secure Axcess court reasoned that the Board
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`had improperly relied on disclosure in the specification on its own (without regard
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`CBM2016-00064
`Patent 8,266,432
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`for the claims in light of the specification), in determining that the patent was “di-
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`rected to solving problems related to providing a web site to customers of financial
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`institutions” and to conclude that the patent “covers the ancillary activity related to
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`a financial product or service of Web site management and functionality.” 848 F.3d
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`at 1375, 1378-79. By contrast, in the Board’s ID here, the specification was properly
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`relied upon, not on its own, but to determine the scope of the claim language, as
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`claim terms are to be construed in light of the specification. Paper 14, 9 (“we never-
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`theless focus on the particular language of claim 1 to determine its full scope, as
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`construed in light of the Specification. See Blue Calypso….”). Similarly, unlike the
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`‘432 patent, the court in Secure Axcess explained that “the written description of the
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`’191 patent generally discusses computer security with a focus on authenticating a
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`web page…[and], on occasion, the written description contains references that might
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`be considered to concern (at least facially) activities that are financial in nature.” 848
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`F.3d at 1373. To the contrary, looking at the text of the ‘432 claims in light of the
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`specification, which Secure Axcess held is determinative rather than the specification
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`alone, the claimed transaction in e-commerce between the claimed “user” and the
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`claimed “external-entity” is a finance-related activity, and thus, financial in nature.
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`Accordingly, the ‘432 patent claims the use of a method and apparatus in the prac-
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`tice, administration, or management of a financial product or service, and as such, is
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`eligible for CBMR.
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`Respectfully submitted,
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`/Thomas A. Rozylowicz/
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`Thomas A. Rozylowicz,
`Reg. No. 50,620
`W. Karl Renner,
`Reg. No. 41,265
`Fish & Richardson P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 202-783-5070
`F: 877-769-7945
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`Attorney for Petitioner
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`CBM2016-00064
`Patent 8,266,432
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` 4/6/2017
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`Dated:
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`(Control No. CBM2016-00064)
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`6
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 CFR § 42.6(e)(4), the undersigned certifies that on April 6,
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`2017, a complete and entire copy of this Petitioner’s Reply to Patent Owner’s Ad-
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`ditional Brief was provided via email to the Patent Owner by serving the corre-
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`spondence email addresses of record as follows:
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`Jae Youn Kim
`Harold L. Novick
`Sang Ho Lee
`Novick, Kim & Lee, PLLC
`1604 Spring Hill Rd. Suite 320
`Vienna, VA 22182
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`Steven L. Ashburn
`Timothy M. Hsieh
`MH2 Technology Law Group, LLP
`1951 Kidwell Drive, Suite 550
`Tysons Corner, VA 22182
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`Email: skim@nkllaw.com
`Email: hnovick@nkllaw.com
`Email: slee@nkllaw.com
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`/Edward G. Faeth/
`Edward G. Faeth
`Fish & Richardson P.C.
`60 South Sixth Street, Suite 3200
`Minneapolis, MN 55402
`(202) 626-6420
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