`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION,
`
`Petitioner
`
`
`
`v.
`
`NADER ASGHARI-KAMRANI and KAMRAN ASGHARI-KAMRANI,
`
`Patent Owners
`
`
`
`U.S. PATENT NO. 8,266,432
`
`Case CBM2016-00064
`
`
`
`PATENT OWNER’S RQUEST FOR
`
`REHEARING UNDER 37 C.F.R. § 42.71
`
`
`
`
`
`
`
`Mail Stop: PATENT BOARD
`
`Patent Trial and Appeal Board
`
`United States Patent and Trademark Office
`
`P.O. Box 1450
`
`Alexandria, VA 22313-1450
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`
`
`
`
`Pursuant to 37 C.F.R. § 42.71, NADER ASGHARI-KAMRANI and
`
`KAMRAN ASGHARI-KAMRANI (“Patent Owner”) hereby respectfully request
`
`rehearing of the September 21, 2016 Decision, granting institution of CBM patent
`
`review of U.S. Patent No. 8,266,432 (“the Decision”) (Paper 14). In rendering its
`
`decision, it is respectfully submitted that the Board misapplied the law to the claims
`
`of the ‘432 patent and misapprehended the specification of the ‘432 patent. Thus,
`
`the Board has abused its discretion and Patent Owner requests the Board reconsider
`
`its decision to institute a CBMR and, in view of the arguments below, rule that no
`
`trial be instituted on the ‘432 patent.
`
`II. LEGAL STANDARDS
`
`37 C.F.R. § 42.71 (d) states:
`
`(d) Rehearing. A party dissatisfied with a decision may file a single
`
`request for rehearing without prior authorization from the Board. The
`
`burden of showing a decision should be modified lies with the party
`
`challenging the decision. The request must specifically identify all
`
`matters the party believes the Board misapprehended or overlooked,
`
`and the place where each matter was previously addressed in a motion,
`
`an opposition, or a reply. ….
`
`
`
`1
`
`
`
`III. MATTERS MISAPPREHENDED OR OVERLOOKED
`
`
`
`A. The Decision was an Abuse of Discretion by the Board’s
`
`Misinterpretation of the Claim Scope and Misapplication of the Case Law.
`
`1. The Board made an erroneous conclusion of law by overlooking
`
`prior decisions that clarify the definition of “covered business method
`
`patent.”
`
`The PTAB has recently issued several decisions that were not considered in
`
`
`
`
`
`this case that clarify the definition of a “covered business method patent.”
`
`According to the decisions, the following factors weigh in favor of concluding that
`
`a patent at issue is not a covered business method patent eligible for review: (1)
`
`claims of general utility with (2) no explicit or inherent finance-related
`
`terminology or limitations. See, e.g., Plaid Technologies Inc. v. Yodlee, Inc., Case
`
`CBM2016-0037, slip op. at 7 (PTAB Aug. 16, 2016) (citations omitted). The
`
`Decision in this case is inconsistent with these recent decisions.
`
`At page 8, the Decision states (with emphasis added), “In short, the claimed
`
`‘electronic transaction between the user and an external-entity’ encompasses sales
`
`of goods or services in e-commerce, and the terms ‘user’ and ‘external-entity,’ as
`
`Patent Owner has expressly defined them in the Specification, show that claim 1
`
`pertains to the offering and consumption, of goods and services via an electronic
`
`transaction between two parties.” (Decision, pg. 8.) However, merely asserting
`
`
`
`2
`
`
`
`that the claim terms encompass or pertain to sales or goods in e-commerce is not
`
`sufficient to establish that the claim terminology is explicitly or inherently finance-
`
`related. Accordingly, the Board’s institution of a CBMR in this case is erroneous
`
`under the factors currently applied by the PTAB.
`
`Further, Patent Owner respectfully submits that the Decision to institute the
`
`CMBR is in error based on the above-identified factors. As argued previously,
`
`claim 1 is devoid of any finance-related terminology or limitations. (Prelim. Resp.,
`
`pp. 9–21.) The Board does not contend otherwise in the Decision. (Decision, p. 6.)
`
`Nor has the Board identified any such explicit terminology or limitations in claim
`
`1. (Id.) Thus, the terminology of claim 1 is not explicitly finance-related.
`
`Moreover, the terminology of claim 1 does not inherently recite any finance-
`
`related terminology or limitations. Inherency requires that an allegedly inherent
`
`characteristic is necessarily present. In re Rijckaert, 9 F.3d 1531, 1534, 28
`
`USPQ2d 1955, 1957 (Fed. Cir. 1993), Ex parte Levy, 17 USPQ2d 1461, 1464 (Bd.
`
`Pat. App. & Inter. 1990).
`
`In this case, the Board determined that claim 1 is directed to a financial
`
`product based on the interpretation of the limitation “during an electronic
`
`transaction between the user and an external-entity” as a financial product.
`
`(Decision, pp. 7-8.) Patent Owner directs the Board’s attention to the fact that all
`
`of the steps of “receiving,” “generating,” “providing,” “receiving,” and
`
`
`
`3
`
`
`
`“authenticating” as recited in the order of claim 1 do not include a step of selling or
`
`buying products or services in e-commerce between the user and an external-entity
`
`as contrary to the Board interpretation but all of these steps are performed by the
`
`central-entity for authenticating the user. More specifically, the first “receiving
`
`step” and the “providing” step are performed by the central-entity with the user;
`
`the “generating” step is performed by the central-entity itself; and the second
`
`“receiving” step and the “authenticating step” are performed by the central-entity
`
`with the external-entity. It is evident that the steps performed between the
`
`authenticating central-entity and the user or the external-entity do not pertain to
`
`the electronic transaction between the user and external-entity, but pertains to the
`
`user authentication process, although these steps are performed “during the
`
`[electronic] transaction” between the user and the external-entity.
`
`In the second “receiving” step, it is recited that “which said dynamic code …
`
`was provided to the external-entity by the user during the transaction.” In claim 1,
`
`this is only limitation related to an activity between the user and the external-
`
`entity. However, this activity of providing the dynamic code to the external-entity
`
`by the user does not pertain to any activity of the electronic transaction between the
`
`user and the external entity although it occurs during the electronic transaction like
`
`other claimed steps performed by the central-entity. All of the limitations of claim
`
`
`
`4
`
`
`
`1 pertain to the user authentication method during the electronic transaction, not
`
`pertaining to any activities of the electronic transaction.
`
`In a sense, claim 1 merely provides what might be a skeleton key to a locked
`
`building independent of the type of transactions happening inside the building.
`
`Access to the building can be for any purpose because claim 1 does not specify the
`
`purpose for the access. Providing a skeleton key for access to the building, it is
`
`respectfully submitted, is not a financial transaction such as sales of goods. After
`
`access, a User in a separate, non-claimed step can use offered online services to
`
`make a purchase or to get access to a restricted web site. Following the claimed
`
`steps of using a skeleton key to gain access, even to a bank, the continued process
`
`of the transaction does not make the skeleton key part of the continued process
`
`related to a financial product or service.
`
`
`
`Further, the Board has identified some implementations in the ‘432 Patent
`
`directed to financial transactions. However, the Board overlooked alternative
`
`implementations lacking any aspects directed to financial transactions. For
`
`example, at column 3, lines 30-38, the ‘432 patent discloses:
`
`This invention also relates to a system and method provided by a
`
`Central-Entity for centralized identification and authentication of
`
`users to allow them access to restricted web sites ….
`
`
`
`5
`
`
`
`This invention further relates to a system and method provided by a
`
`Central-Entity for centralized identification and authentication of
`
`users to allow them to purchase goods and services from an External-
`
`Entity ….
`
`Additionally, with reference to FIG. 2, col 4, line 62 to col. 5, line 9 of the
`
`‘432 Patent disclose (with emphasis added):
`
`… During the registration phase, the user 10 provides his personal or
`
`financial information to the Central-Entity 30. The user 10 registers at
`
`the Central-Entity 30, 100, 104 and receives his account and login
`
`information such as UserName and Password 108. User 10 can access
`
`his account at any time by accessing the Central-Entity's system using
`
`a communication network 50 and logging into the system.
`
`Next is the transaction phase, where the user 10 attempts to access a
`
`restricted web site or attempts to buy services or products 110, as
`
`illustrated in FIG. 4, through a standard interface provided by the
`
`External-Entity 20, similar to what exists today and selects digital
`
`identity as his identification and authorization or payment option. The
`
`External-Entity 20 displays the access or purchase authorization form
`
`requesting the user 10 to authenticate himself using his UserName and
`
`SecureCode as digital identity. …
`
`As evident above, the ‘432 patent discloses implementations entirely
`
`directed to “centralized identification and authentication of users to allow them
`
`access to restricted web sites” and discloses alternative implementations directed
`
`to “centralized identification and authentication of users to allow them to purchase
`
`
`
`6
`
`
`
`goods and services from an External-Entity.” Accordingly, the terms of claim 1 are
`
`not necessarily directed to financial transactions. Therefore, claim 1 does not
`
`inherently recite any finance-related terminology or limitations.
`
`
`
`2. The Decision relies on erroneous facts because the Board overlooked
`
`implementations that are not financial-related and, consequently,
`
`imported financially-related implementations into the claims from the
`
`specification.
`
`The Decision states: “In short, the claimed ‘electronic transaction between
`
`
`
`the user and an external-entity’ encompasses sales of goods or services in e-
`
`commerce, and the terms ‘user’ and ‘external-entity,’ as Patent Owner has
`
`expressly defined them in the Specification, show that claim 1 pertains to the
`
`offering and consumption, of goods and services via an electronic transaction
`
`between two parties.” (Decision, pg. 8). Patent Owner respectfully disagrees and
`
`submits that these assertions are incorrect.
`
`As discussed supra, the specification of the ‘432 Patent discloses some
`
`financial-related implementations. However, it also discloses alternative
`
`implementations that are entirely not financially-related, such as providing
`
`personal information to the central entity and accessing a restricted website. (See,
`
`e.g., Exh. 1001, FIG. 2, 3:30-34, and 4:62-50.) Indeed, not all restricted websites
`
`are finance-related. (E.g., providing a username and password by a member of
`
`
`
`7
`
`
`
`Yahoo.com to access a restricted website for a chat room or a personal email
`
`account.) In the Decision the Board conflated the different implementations and
`
`only noted the financially-related aspects. Then, based solely on the financially-
`
`related aspects, concluded that the above-noted claim terminology must be
`
`financially-related. The Board’s conclusion is erroneous because limitations from
`
`the specification cannot be imported into the claims. Superguide Corp. v. DirecTV
`
`Enterprises, Inc., 358 F.3d 870, 875 (Fed. Cir. 2004). Rather, pursuant to 37 C.F.R.
`
`§ 42.100(b), the Board must give a claim its broadest reasonable construction in
`
`light of the specification. And, as detailed below, when the non-financial
`
`implementations are considered, the broadest reasonable interpretation of the claim
`
`terminology is not restricted to financial activities.
`
`Notably, the PTAB has previously held that not all electronic transactions
`
`are financial transactions. See J.P. Morgan Chase & Co. v. Intellectual Ventures II
`
`LLC, CBM2014-00160. In the case, as detailed supra, not all implementations of
`
`electronic transactions disclosed in the ‘432 Patent are financially-related. Rather,
`
`the Specification consistently and repeatedly describes that the claimed method can
`
`be used for authentication of a user in a non-financial context as well. (See, e.g.,
`
`Ex. 1001, 1:35-37, 3:30-38, and 4:55-58.) Indeed, because such steps are not
`
`required parts of the claimed authentication method, the ‘432 Patent lacks detailed
`
`description as to steps for buying or selling products (e.g., steps for selecting goods
`
`
`
`8
`
`
`
`or paying the goods using credit cards). The Specification merely discloses these
`
`general applications (e.g., “to get access to the restricted web sites or electronically
`
`purchase desired goods or services”), as non-limiting and illustrative examples,
`
`available after the claimed method is performed.
`
`
`
`Further as recited in claim 4 (which was disclaimed) and claim 5, the
`
`method of claim 1 can be used during a financial or a non-financial transaction.
`
`Thus, the doctrine of claim differentiation emphasizes that claim 1 is much broader
`
`than during a mere financial transaction.
`
`For all the foregoing reasons, the implementations of the ‘432 patent
`
`directed to financially-related activities are non-limiting examples that the Board
`
`imported into the claims. Such importation is clearly erroneous and fails to give the
`
`claim terminology its broadest reasonable interpretation in light of the disclosed
`
`examples that are entirely non-financial implementations. Accordingly, the claim
`
`interpretation set forth in the Decision relies on erroneous facts as to the scope of
`
`the disclosure.
`
`3. The Board misinterpreted the claimed invention as reciting
`
`financially-related activities by misapplying SightSound.
`
`At page 8 of the Decision, the Board concluded that claim 1 “recites a
`
`
`
`method for performing data processing or other operations used in the practice,
`
`administration, or management of a financial service” in view of SightSound
`
`
`
`9
`
`
`
`Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315 (Fed. Cir. 2015). The claim at
`
`issue in SightSound recites, in part: “selling electronically by the first party to the
`
`second party through telecommunications lines, the desired digital video or digital
`
`audio signals in the first memory; and transferring the desired digital video or
`
`digital audio signals from the first memory of the first party.” (emphasis added).
`
`Thus, the claim in SightSound, explicitly recites the steps of selling and
`
`transferring the desired digital video or digital signals to the buyer pertaining to
`
`sales of goods. However, as set forth supra, claim 1 of ‘432 is devoid of any
`
`explicit recitation of financially-related activities.
`
`4. The Board misinterpreted the claimed invention as lacking general
`
`utility by misapplying Blue Calypso.
`
`At page 9 of the Decision, the Board cited Blue Calypso LLC v. Groupon,
`
`
`
`Inc., 815 F.3d 1331, 1338–40 (Fed. Cir. 2016) and asserted that that claim 1 lacks
`
`“general utility” because “the Specification of the ‘432 patent consistently
`
`describes its purported invention as directed to a method and system for allowing
`
`secured electronic sales transactions in e-commerce.” However, the Blue Calypso
`
`court states, “[a]s the Board acknowledged, ‘the ‘055 patent repeatedly, and almost
`
`exclusively discloses ‘incentive’ and ‘incentive program’ in a financial context.”
`
`(emphasis added). Blue Calypso LLC v. Groupon, Inc., 815 F.3d 1331, 1339-1340
`
`
`
`10
`
`
`
`(Fed. Cir. 2016). In Blue Calypso, the Specification exclusively discloses the claim
`
`term “subsidy” in a financial context.
`
`
`
`As set forth supra, in contrast to Blue Calypso, the example implementations
`
`disclosed in the ‘432 patent relate to “centralized identification and authentication
`
`of users to allow them access to restricted web sites” and “centralized
`
`identification and authentication of users to allow them to purchase goods and
`
`services from an External-Entity.” (See, e.g., Exh. 1001, FIG. 2, 3:30-34, and 4:62-
`
`50.) In other words, while some implementations of the disclosed invention are
`
`directed to purchasing goods and services, other implementations are not.
`
`Accordingly, the terms of claim 1 are not exclusively directed to financial
`
`transactions.
`
`
`
`Further, the Blue Calypso court states: “Blue Calypso relies on a handful of
`
`Board decisions declining to institute CBM review on patents unrelated to the Blue
`
`Calypso Patents. See … Sega of Am., Inc. v. Uniloc USA, Inc., CBM2014-00183
`
`… J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, CBM 2014-00160.”
`
`Blue Calypso LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016).
`
`Further, the Blue Calypso court states: “Contrary to Blue Calypso’s argument, each
`
`of these cases properly focuses on the claim language at issue and, finding nothing
`
`explicitly or inherently financial in the construed claim language, declines to
`
`
`
`11
`
`
`
`institute CBM review.” Id. Thus, the Federal Circuit confirmed that the decisions
`
`made in the Sega and J.P. Morgan Chase CBM proceedings are proper.
`
`
`
`Patent Owner submits that the Board should have applied the “general
`
`utility” test as applied by the J.P. Morgan Chase and other CBM proceedings as
`
`cited by Patent Owner at page 12 of the Preliminary Response and as discussed on
`
`pages 14-21 of the Preliminary Response. Patent Owner asserted that “the claims
`
`of the ‘432 patent are of ‘general utility,’ i.e., they recite a particular novel
`
`technique for authenticating a user during an electronic transaction between the
`
`user and an external-entity without restricting the field of use of the claimed
`
`invention to financial sector or financial activity.” Preliminary Response, pg. 12.
`
`
`
`For all of the forgoing reasons, the Board abused its discretion by
`
`mischaracterized the disclosure of the ‘432 patent, misinterpreting the claims to be
`
`exclusively limited to a financial transaction. Further, the Board misapplied the
`
`case law in SightSound and Blue Calypso. Patent Owner, therefore, respectfully
`
`submits that the Board abused its discretion and requests that the Decision to
`
`institute the CBMR of the ‘432 patent be withdrawn.
`
`B. The Board committed a clear error in concluding that the claims at
`
`issue are unpatentable over the cited art.
`
`
`
`The Board’s determination, at pages 10-13 of the Decision, that the claimed
`
`invention of the ‘432 does not recite a technological feature that is novel and non-
`
`
`
`12
`
`
`
`obvious over the prior art of record presented by Petitioner is a clear error as a
`
`matter of law.
`
`First of all, a CBMR of claims 1-3, 5-28 and 30-55 was instituted has been
`
`obviousness over Nicholson in view of Brown, not for anticipation. Thus, it is
`
`confirmed by the Board that the claims of the ‘432 patent are novel over
`
`Nicholson.
`
`Additionally, the claims of the ‘432 patent would not have been obvious
`
`over Nicholson because the invention date of the ‘432 patent antedates that of
`
`Nicholson.
`
`35 U.S.C. 103(a) (pre-AIA) states:
`
`(a) A patent may not be obtained though the invention is not identically
`
`disclosed or described as set forth in section 102, if the differences between
`
`the subject matter sought to be patented 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 said subject
`
`matter pertains. (emphasis added).
`
`Since the pre-AIA 35 U.S.C. 103(a) applies to the ‘432 patent, a person
`
`having ordinary skill in the art must have been defined at the time the invention
`
`was made. It is undisputable that the claimed invention of the ‘432 patent was
`
`made prior to August 29, 2001 because the disclosure of the ‘926 application (the
`
`
`
`13
`
`
`
`‘432 patent) is identical to that of the first prior-filed ‘635 application (the ‘837
`
`patent).
`
`Nicholson was filed on July 14, 2006 as US 14/486,880, claiming a benefit
`
`of US provisional application 60/700,506 filed on July 19, 2005. If the claims of
`
`the ‘880 application are supported by the disclosures of the ‘506 provisional
`
`application, Nicholson’s constructive invention date would be July 19, 2005 which
`
`is antedated by the August 29, 2001 invention date of the ‘432 patent.
`
`It is a clear error that the Board preliminarily determined that ‘432 patent
`
`claims do not recite limitations which are non-obvious over Nicholson in view of
`
`Brown because it is well-established that obviousness is a question of law based on
`
`facts determined by one of ordinary skill in the art at the time the invention was
`
`made. Therefore, contrary to the Board’s determination, the claims of the ‘432
`
`patent would not have been obvious over Nicholson, and the CBMR institution of
`
`claims 1-3, 5-28 and 30-55 as being obvious over Nicholson in view of Brown
`
`should be withdrawn. Further, Patent Owner respectfully requests that the
`
`arguments presented in the Patent Owner’s Preliminary Response, at pages 23-31,
`
`for the second prong of 37 C.F.R. § 42.301(b), should be further considered.
`
`C. Petition to Accept an Unintentionally Delayed Benefit Claim granted.
`
`
`
`
`Patent Owner advises the Board that the Office granted a Petition to Accept
`
`an Unintentionally Delayed Benefit Claim in the ‘432 Patent. This Petition was
`
`
`
`14
`
`
`
`granted on September 19, 2016, received by Patent Owner on September 21, 2016,
`
`and submitted to the Board on September 23, 2016 as Exhibit 2006. This benefit
`
`claim establishes a second chain of priority to the filing date of the first prior-filed
`
`application through the third prior-filed application. Patent Owner requests that the
`
`Board exercise its discretion to reconsider the priority date of the claims of the
`
`‘432 patent in view of the third prior-filed application.
`
`IV. CONCLUSION
`
`For the foregoing reasons, Patent Owner submits that the Board has abused
`
`
`
`its discretion and requests that the Board decline to institute the CBM review of the
`
`‘432 patent.
`
`Respectfully submitted,
`
` /Jae Youn Kim /
`Jae Youn Kim
`Reg. No. 69,215
`Lead Counsel for Petitioner
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`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;
`hnovick@nkllaw.com;
`slee@nkllaw.com
`
`
`
`15
`
`
`
`CERTIFICATE OF SERVICE
`
`
`
`Pursuant to 37 C.F.R. §42.6(e)(1), this is to certify that I caused to be served
`
`a copy of the foregoing “PATENT OWNER’S REQUEST FOR REHEARING” via
`
`electronic mail on October 5, 2016 to the Petitioner’s counsel of record at the
`
`following email addresses:
`
`W. Karl Renner, Lead Counsel
`
`Thomas Rozylowicz, Back-up Counsel
`
`CBM36137-0007CP2@fr.com
`
`PTABInbound@fr.com
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`__/Jae Youn Kim/_______
`Jae Youn Kim
`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
`
`
`
`1
`
`
`
`
`
`Date: October 5, 2016