UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case CBM2018-00024
`U.S. Patent No. 8,577,813
`________________
`
`[CORRECTED] PATENT OWNER'S RESPONSE
`PURSUANT TO 37 C.F.R. § 42.120
`
`

`

`TABLE OF CONTENTS
`
`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`Page
`
`I.
`II.
`
`INTRODUCTION ........................................................................................... 1
`OVERVIEW OF THE ’813 PATENT ............................................................ 6
`A.
`The ’813 Patent Specification ............................................................... 6
`B.
`The ’813 Patent Claims ......................................................................... 9
`C.
`Prosecution History of the ’813 Patent ................................................. 9
`III. OVERVIEW OF THE ASSERTED PRIOR ART ........................................ 10
`A. Maes (Ex. 1213) .................................................................................. 10
`B.
`Jakobsson (Ex. 1214) .......................................................................... 13
`C. Maritzen (Ex. 1215) ............................................................................ 14
`D.
`Labrou (Ex. 1216) ............................................................................... 16
`LEVEL OF ORDINARY SKILL IN THE ART ........................................... 18
`IV.
`CLAIM CONSTRUCTION .......................................................................... 18
`V.
`STANDARD OF REVIEW ........................................................................... 19
`VI.
`VII. THE ’813 PATENT DOES NOT QUALIFYAS A “COVERED
`BUSINESS METHOD PATENT” ................................................................ 19
`IBG LLC v. Trading Technologies Int’l, Inc. Mandates
`A.
`Dismissal ............................................................................................. 21
`The Petition Fails To Prove The Claimed Subject Matter As A
`Whole Does Not Recite A Technological Feature That Is Novel
`And Unobvious Over The Prior Art .................................................... 25
`The Petition Fails To Prove The Claimed Subject Matter As A
`Whole Does Not Solve A Technological Problem Using A
`Technical Solution ............................................................................... 31
`VIII. GROUND 1: THE PETITION FAILS TO PROVE MAES IN VIEW
`OF JAKOBSSON RENDERS THE CHALLENGED CLAIMS
`OBVIOUS ...................................................................................................... 38
`A.
`The Petition Fails to Prove Maes Discloses A “Secure Registry” ...... 38
`B.
`The Petition Fails To Prove Jakobsson Discloses A “Secure
`Registry” .............................................................................................. 42
`
`B.
`
`C.
`
`i
`
`

`

`C.
`
`D.
`
`E.
`
`F.
`G.
`
`H.
`
`I.
`
`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`3.
`
`4.
`
`The Petition Fails To Prove A POSITA Would Have Been
`Motivated To Combine Maes And Jakobsson To Teach A
`“Secure Registry” ................................................................................ 43
`1.
`The Petition’s Arguments Are Conclusory ............................... 44
`2.
`The Petition Fails To Show How The Combination
`Would Work. ............................................................................. 46
`The Petition Fails To Prove Obvious To Try/Reasonable
`Expectation Of Success ............................................................. 47
`The Combination Would Change The Principal Of
`Operation Of Maes .................................................................... 48
`The Petition Fails To Prove Jakobsson Discloses “Generate
`Encrypted Authentication Information …” ......................................... 51
`The Petition Fails To Prove A POSITA Would Have Been
`Motivated To Combine Maes And Jakobsson To Teach “A
`Non-Predictable Value And To Generate Encrypted
`Authentication Information From The Non-Predictable Value,
`Information Associated With At Least A Portion Of The
`Biometric Input, And The Secret Information” .................................. 53
`1.
`The Petition Fails To Prove The References Propose The
`Same Solution For The Same Problem ..................................... 53
`The Proposed Combination Changes The Basic
`Principles Of Maes .................................................................... 57
`The Petition Fails To Prove Dependent Claim 4 Is Invalid ................ 59
`The Petition Fails To Prove Maes Discloses “Display Indicators
`For The Plurality Of Accounts In The User Interface, And The
`User Interface Is Configured To Accept User Selection Of A
`Respective One Of The Plurality Of Accounts.”/ “Displaying,
`On The User Interface Indicators For The Plurality Of User
`Accounts Stored In A Memory Of The Electronic ID Device”
`For Dependent Claims 13 And 17 ....................................................... 61
`The Petition Fails To Prove Maes Discloses “De-Activating
`The Electronic ID Device…If The Identity Of The User Is Not
`Successful” For Dependent Claim 18 ................................................. 63
`The Petition Fails To Prove Jakobsson Discloses “An Act Of
`Generating A Seed” For Dependent Claim 19 .................................... 64
`
`2.
`
`ii
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`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`2.
`
`3.
`
`The Petition Fails To Prove Dependent Claim 20 Is Invalid .............. 66
`J.
`IX. GROUND 2: THE PETITION FAILS TO PROVE CLAIMS 6-10
`ARE INVALID .............................................................................................. 67
`A.
`The Petition Fails To Prove Not Permitting User Input (Cl. 6-
`10) ........................................................................................................ 67
`1.
`The Petition Fails to Prove Maes Discloses Not
`Permitting User Input ................................................................ 68
`The Petition Fails to Prove Maritzen Discloses Not
`Permitting User Input ................................................................ 69
`The Petition Fails To Prove A POSITA Would Combine
`Maes And Maritzen ................................................................... 70
`The Petition Fails To Prove Dependent Claim 10 Is Invalid .............. 71
`B.
`GROUND 3: THE PETITION FAILS TO PROVE CLAIMS 14-15,
`22-23, 25-26 ARE INVALID ........................................................................ 72
`A.
`The Petition Fails To Prove Maes Discloses Displaying Options
`For Purchase/Accepting Selections ..................................................... 73
`The Petition Fails To Prove A POSITA Would Combine Maes
`and Labrou ........................................................................................... 74
`PETITIONER FAILED TO CONSIDER THE STRONG EVIDENCE
`OF SECONDARY CONSIDERATIONS OF NON-OBVIOUSNESS ........ 76
`A.
`Long-felt Need and Failure of Others ................................................. 76
`B.
`Commercial Success............................................................................ 80
`XII. CONCLUSION .............................................................................................. 81
`
`XI.
`
`X.
`
`B.
`
`iii
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page(s)
`
`Apple Inc. v. Int’l Trade Comm’n,
` 725 F.3d 1356 (Fed. Cir. 2013) ..........................................................................76
`Apple Inc. v. Samsung Elecs. Co. Ltd.,
` 816 F.3d 788 (Fed. Cir. 2016) ............................................................................76
`Apple v. Uniloc Luxembourg S.A.,
` IPR2018-00420 (PTAB Aug. 6, 2018) ...............................................................46
`Apple, Inc. v. Universal Secure Registry LLC,
` CBM2018-00026 (PTAB Dec. 10, 2018) ........................................... 2, 23, 24,28
`Arendi S.A.R.L. v. Apple Inc.,
` 832 F.3d 1355 (Fed. Cir. 2016) ..........................................................................44
`Bloomberg L.P. v. Quest Licensing Corp.,
` CBM2014-00205 (PTAB Apr. 7, 2015) ...................................................... 20, 25
`Cutsforth Inc. v. MotivePower, Inc.,
` 636 F. App’x 575 (Fed. Cir. 2016) .....................................................................44
`E*Trade Fin. Corp. v. Droplets, Inc.,
` CBM2014-00123 (PTAB Oct. 30, 2014)............................................................28
`Emnos USA Corp. v. Dunnhumby Ltd.,
` CBM2015-00116 (PTAB Nov. 10, 2015) ..........................................................20
`Enfish, LLC v. Microsoft Corp.,
` 822 F.3d 1327 (Fed. Cir. 2016) ................................................................... 30, 31
`Experian Mktg. Solutions, Inc. & Epsilon Data Mgmt. v. Rpost Commc’n Ltd,
` CBM2014-00010 (PTAB. April 22, 2014) .................................................. 26, 29
`Finjan, Inc. v. Blue Coat Systems, Inc.,
` 879 F.3d 1299 (Fed. Cir. 2018) ..........................................................................30
`General Electric Company v. United Technologies Corp.,
` IPR2016-00531 (PTAB June 26, 2017) ..............................................................49
`Gillette Co. v. S.C. Johnson & Son, Inc.,
` 919 F.2d 720 (Fed. Cir. 1990) ............................................................................39
`
`iv
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`Grain Processing Corp. v. American Maize-Prods. Co.,
` 840 F.2d 902 (Fed. Cir. 1988) ............................................................................39
`Heidelberger Druckmaschinen AG v. Hantscho Commercial Prods., Inc.,
` 21 F.3d 1068 (Fed. Cir. 1994) ............................................................................76
`HTC Corp. v. Ancora Technologies Inc.,
` CBM2017-00054 (PTAB Dec. 1, 2017) .............................................................25
`HTC Corp., ZTE (USA), Inc. v. Cellular Comms. Equip., LLC,
` 877 F.3d 1361 (Fed. Cir. 2107) ............................................................. 41, 43, 61
`IBG LLC v. Trading Technologies Int’l, Inc.,
` 2019 WL 581580 (Fed Cir., Feb. 13, 2019) ............................................... passim
`In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig.,
` 676 F.3d 1063 (Fed. Cir. 2012) ..........................................................................75
`In re Magnum Oil Tools Int’l, Ltd.,
` 829 F.3d 1364 (Fed. Cir. 2016) ..........................................................................44
`Microsoft Corp. v. Koninklijke Philips N.V.,
` IPR2018-00185 (PTAB May 22, 2018) ..............................................................49
`Personal Web Techs., LLC v. Apple, Inc.,
` 848 F.3d 987 (Fed. Cir. 2017) ............................................................................46
`Samsung Elecs. Co., Ltd. v. Infobridge Pte. Ltd.,
` IPR2017-00100 (PTAB Apr. 23, 2018) ..............................................................19
`Stratoflex, Inc. v. Aeroquip Corp.,
` 713 F.2d 1530 (Fed. Cir. 1983) ..........................................................................76
`Stryker Corp. v. Karl Storz Endoscopy America, Inc.,
` IPR2015-00764 (PTAB Sept. 2, 2015) ...............................................................56
`Trivascular, Inc. v. Samuels,
` 812 F.3d 1056 (Fed. Cir. 2016) ..........................................................................19
`Universal Secure Registry, LLC v. Apple, Inc.,
` No. 1:17-cv-00585-CFC-SRF (D. Del., Sept. 19, 2018) ................................2, 23
`
`Statutory Authorities
`<<so: 000>>35 U.S.C. § 101 ................................................................................................ passim
`<<so: 001>>35 U.S.C. §103 .................................................................................................. 38, 39
`<<so: 003>>35 U.S.C. § 314(a) ....................................................................................................19
`
`v
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`<<so: 004>>35 U.S.C. § 316(e) ................................................................................................1, 19
`Rules and Regulations
`
`<<so: 008>>37 C.F.R. § 42.301(a) ....................................................................................... 20, 22
`<<so: 008>>37 C.F.R. § 42.301(b) ....................................................................................... 20, 25
`<<so: 011>>37 C.F.R. § 42.304(a) ..............................................................................................19
`<<so: 012>>MPEP §2141.02 .......................................................................................................39
`Additional Authorities
`
`157 Con. Rec. S5402 (September 8, 2011) ..............................................................30
`
`vi
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`LIST OF EXHIBITS
`
`Description
`Declaration of Markus Jakobsson in Support of Patent
`Owner’s Preliminary Response
`Curriculum Vitae of Markus Jakobsson
`Universal Secure Registry LLC v. Apple Inc., No. 17-585,
`Doc. 77 (D. Del., May 22, 2018)
`Declaration of Alan Schiffman in Support of Patent Owner’s
`Preliminary Response
`Curriculum Vitae of Alan Schiffman
`Declaration ISO of Unopposed Motion for Admission Pro
`Hac Vice of Harold A. Barza
`Declaration ISO of Unopposed Motion for Admission Pro
`Hac Vice of Jordan B. Kaericher
`U.S. Application No. 13/237,184
`U.S. Application No. 12/393,586
`Declaration by Dr. Markus Jakobsson Ph.D. in Support of
`Motion to Amend
`Declaration of Markus Jakobsson in Support of
`Patent Owner’s Response
`N. Asokan, et. al, The State of the Art in Electronic Payment
`Systems, IEEE Computer, Vol. 30, No. 9, pp. 28-35 (IEEE
`Computer Society Press, Sept. 1997)
`M. Baddeley, Using E-Cash in the New Economy: An
`Economic Analysis of Micropayment Systems, J. Electronic
`Commerce Research, Vol. 5, No. 4, pp. 239-253 (Nov. 2004)
`Rough Deposition Transcript of Dr. Victor John Shoup
`Universal Secure Registry, LLC v. Apple, Inc., No. 1:17-cv-
`00585-CFC-SRF, Doc. 137 (D. Del., Sept. 19, 2018)
`Deposition Transcript of Dr. Victor John Shoup
`
`Exhibit #
`2001
`
`2002
`2003
`
`2004
`
`2005
`2006
`
`2007
`
`2008
`2009
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`2015
`
`2016
`
`vii
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`Apple Inc.’s (“Petitioner”) Petition (Paper 3, “Petition”) proffers three
`
`invalidity grounds for U.S. Patent No. 8,577,813 (“’813 patent”) (Ex. 1201): (1)
`
`Claims 1-2, 4-5, 11, 13, 16-20, and 24 are allegedly obvious in view of U.S. Patent
`
`No. 6,016,476 (“Maes”) (Ex. 1213) and International Patent Application
`
`Publication No. WO 2004/051585 (“Jakobsson”) (Ex. 1214); (2) Claims 6-10 are
`
`allegedly obvious in view of Maes, Jakobsson, and U.S. Patent Application
`
`Publication No. 2004/0236632 (“Maritzen”) (Ex. 1215); and (3) Claims 14-15, 22-
`
`23, and 25-26 are obvious in view of Maes, Jakobsson and U.S. Patent Application
`
`Publication No. 2004/0107170 A1 (“Labrou”) (Ex. 1216). On November 20,
`
`2018, the Board instituted review (Paper 10). Patent Owner Universal Secure
`
`Registry, L.L.C. (“PO”) submits this Response.
`
`I.
`
`INTRODUCTION
`
`Petitioner has not met its “burden of proving a proposition of unpatentability
`
`by a preponderance of the evidence.” 35 U.S.C. § 316(e). The Petition should be
`
`denied for many reasons.
`
`First, the Federal Circuit just clarified the law regarding the “technological
`
`invention” exception to CBM review. See IBG LLC v. Trading Technologies Int’l,
`
`Inc., 2019 WL 581580, at *1 (Fed Cir., Feb. 13, 2019) (“IBG”). Specifically, the
`
`Court vacated Board decisions holding four patents with the same specification not
`
`to be “technological inventions” where both the Board and Federal courts found
`
`1
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`

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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`two patents in the family to be eligible under Section 101. Id., *1-*3. This
`
`proceeding presents identical facts as both the Board and a federal court have
`
`found the ’813 patent to be eligible under Section 101. See Apple, Inc. v.
`
`Universal Secure Registry LLC, CBM2018-00026 (Paper 11), slip op., 24 (PTAB
`
`Dec. 10, 2018); Universal Secure Registry, LLC v. Apple, Inc., No. 1:17-cv-00585-
`
`CFC-SRF, Doc. 137 (D. Del., Sept. 19, 2018) (Ex. 2015). Just like in IBG, since
`
`the claims in this case have already been found not to be directed to an abstract
`
`idea, it would “internally inconsistent” to nevertheless find the claims directed to a
`
`non-technological invention. IBG, *1-*3.
`
`Indeed, it is plain that the Petition failed to establish CBM eligibility because
`
`the claims solve a “technical problem using a technical solution.” For a patent to
`
`be CBM eligible a petitioner must prove that it is not a technological invention,
`
`i.e., (i) whether the claimed subject matter as a whole recites a technological
`
`feature that is novel and unobvious over the prior art; and (ii) solves a
`
`technological problem using a technical solution. Here, the Board held the ’813
`
`patent is not directed to a “technological invention” because “each [claimed] step[]
`
`uses a technological feature that was known in the art as of the patent’s earliest
`
`priority date.” Op., 12. And, “additionally,” “the steps appear to be implemented
`
`in a conventional manner.” Id., 13 (citing Ex. 1201, ’813 patent, 43:54-44:7 and
`
`Pet. 14). This, however, conflates the analysis, and both the Petition and,
`
`2
`
`

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`Case No. CBM2018-00024
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`respectfully, the Board’s institution decision, failed to establish that the claims
`
`solve a technological problem using a technical solution. As explained below, the
`
`specification and claims make clear the steps are not the invention; rather, the
`
`claims as a whole were the revolutionary advancement for which the Patent Office
`
`granted the ’813 patent. Indeed, just as in IBG, the claims here address a specific
`
`technical problem and set forth a “specific implementation of a solution to a
`
`problem in the software arts.” IBG, *2. In other words, it is insufficient to simply
`
`conclude that the claims use “known” features.
`
`The Petition also fails to prove the claimed subject matter provides technical
`
`solutions to solve technical problems. For instance, Petitioner ignores the software
`
`contributions in the claims and fails to address the claimed invention as a whole—
`
`indeed, Petitioner’s analysis fails to address any claim language. See Pet., 16-18.
`
`Also, Petitioner mischaracterizes the problem and the claimed solution.
`
`Second, the Petition fails to prove that Maes in view of Jakobsson renders
`
`the challenged claims obvious (Ground 1) for several reasons.
`
`i) To start, the Petition fails to prove either Maes or Jakobsson disclose a
`
`“secure registry,” as required by each independent claim. In this regard,
`
`controlling precedent requires that in determining the differences between the prior
`
`art and the claims, the question is not whether the differences themselves would
`
`have been obvious, but whether the claimed invention as a whole would have been
`
`3
`
`

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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`obvious. If the Board treats the claim as a whole, Maes alone cannot teach a
`
`“secure registry” because neither financial institution 70 or central server 60,
`
`which the Petition alleges to be “coupled” to financial institution 70 (Pet., 35), can
`
`teach the claimed “secure registry” because neither deals with, considers, or
`
`suggests
`
`the claimed “encrypted authentication
`
`information,” or claimed
`
`architecture. And, the Petition has failed to prove central server 60 is the claimed
`
`secure registry because it has not established that it receives “encrypted
`
`authentication information” from a POS device as required by the claim language
`
`(1[g]).
`
`Likewise, the Petition has failed to prove that Jakobsson discloses a “secure
`
`registry” because nothing in the cited portion describes an access restriction for the
`
`underlying database (as required by the Petitioner’s claim construction); it merely
`
`discloses an authentication mechanism to ensure users are authenticated prior to
`
`authorizing transaction. And, further, the Petition has failed to prove it is obvious
`
`to modify financial institution 70 to include the functions of Jakobsson (“generated
`
`encrypted authentication information”) and then make the Petition’s alleged simple
`
`substitution (a now modified) element of Maes.
`
`ii). The Petition also fails to prove Jakobsson discloses “generate encrypted
`
`authentication information” because a POSITA would understand that encryption
`
`is a function for which there is an inverse (namely decryption), and the cited
`
`4
`
`

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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`portions of Jakobsson fail to make any such disclosure. Additionally, the Petition
`
`fails to prove a POSITA would have been motivated to combine Maes and
`
`Jakobsson
`
`to
`
`teach “a non-predictable value and
`
`to generate encrypted
`
`authentication information from the non-predictable value, information associated
`
`with at least a portion of the biometric input, and the secret information.”
`
`iii). The Petition also fails to prove either Maes or Jakobsson disclose claim
`
`4’s limitation of “wherein the secret information includes the identifying
`
`information.” Petitioner’s citation to Maes fails because the PIN number, which is
`
`the accused secret information, does in no way include the credit card information,
`
`which is the accused identifying information. And, with respect to the
`
`combination, the Petition fails to prove any motivation to combine these references
`
`in such a manner.
`
`iv). The petition fails to proffer any citation to Maes that disclose the
`
`claimed limitations of Claims 13 and 17, i.e., displaying indicators of a plurality of
`
`accounts or accepting selection thereof. Likewise, for claim 18, the Petition fails
`
`to establish that Maes discloses this limitation. And, similarly, the Petition fails to
`
`prove Jakobsson discloses “an act of generating a seed” for claim 19.
`
`Third, for Ground 2, the Petition fails to prove that Maes in view of
`
`Jakobsson and Maritzen disclose the requirements of claims 6 to 10 involving the
`
`5
`
`

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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`electronic ID device to not permit entry of user input if the biometric input is
`
`determined to not belong to an authorized user.
`
`Fourth, with respect to Ground 3, the Petition fails to prove that Maes in
`
`view of Jakobsson and Labrou discloses limitations for claims 14, 22 and 25 (user
`
`interface to display options for purchase) and claim 15, 23 and 26 (user interface to
`
`accept selection of at least one product or service).
`
`Fifth, Petitioner fails to address secondary considerations indicating the
`
`claims would not have been obvious.
`
`As a result, Petitioner has not met its burden to show the proffered claims
`
`are invalid.
`
`II. OVERVIEW OF THE ’813 PATENT
`
`A.
`
`The ’813 Patent Specification
`
`The ’813 patent provides improved systems, devices and methods that allow
`
`users to securely authenticate their identity and authenticate their electronic ID
`
`device when engaging in a distributed electronic transaction involving a point-of-
`
`sale device. Ex. 1201, ’813 patent, Fig. 31, 43:4-51:55; see Ex. 2011, Markus
`
`6
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`U.S. Patent No. 8,577,813
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`Decl., ¶25.1 When used in conjunction with the patent’s Universal Secure Registry
`
`(“USR”), the claimed Electronic ID Device can both securely identify the user, and
`
`separately authenticate and approve the user’s financial transaction requests made
`
`through a POS device. Id., 43:4-15, Fig. 31. See Ex. 2011, Markus Decl., ¶25
`
`The USR (USR 10 in Fig. 1, USR 356 in Fig. 31) includes a secure database that
`
`stores account (e.g., credit card) information for a plurality of users. Ex.
`
`1201, ’813 patent, 44:39-53.
`
`The ‘813 specification identifies a number of disadvantages of prior art
`
`approaches to providing secure access. See Ex. 2011, Markus Decl., ¶26. For
`
`example, a prior art authorization system may control access to computer networks
`
`using password protected accounts, but such a system is susceptible to tampering
`
`and difficult to maintain. Ex. 1201, ’813 patent, 1:64-2:15. Moreover, prior art
`
`hand-held computer devices may be used to verify identity, but security could be
`
`compromised if a device ends up in the wrong hands. Id., 2:16-43. See Ex. 2011,
`
`Markus Decl., ¶26.
`
`To prevent unauthorized use of the claimed Electronic ID Device, a user
`
`1 As Patent Owner’s expert is an inventor of one of Petitioner’s prior art
`
`references, herein such expert’s declaration is referred to as “Markus Decl.” to
`
`avoid confusion.
`
`7
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`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`must first authenticate themselves to the device to activate it for a transaction. Id.
`
`The ‘813 patent describes multiple ways to do this, including using a biometric
`
`input (e.g., fingerprint) and/or secret information (e.g., a PIN). Ex. 1201, ’813
`
`patent, 45:55-46:45, 50:1-22, 51:7-26. Once activated, the Electronic ID Device
`
`allows a user to select an account for transaction, such as a financial transaction,
`
`and generates encrypted authentication information that is sent via the POS device
`
`to the USR for authentication and approval of the requested financial transaction.
`
`Id., 46:22-36. Notably, this encrypted authentication information is not the user’s
`
`credit card information, which could be intercepted and misused. See Ex. 2011,
`
`Markus Decl., ¶27. Instead, the Electronic ID Device first generates a
`
`nonpredictable value, and then generates single-use authentication information
`
`from the non-predictable value, information associated with the biometric data, and
`
`the secret information. Ex. 1201, ’813 patent, 46:14-36, 50:56-65. See Ex. 2011,
`
`Markus Decl., ¶27. This encrypted authentication information is transmitted to the
`
`secure registry, where it is used to determine transaction approval. Ex. 1201, ’813
`
`patent, 11:36-45, 12:19-44, 12:64-13:8, 48:60-49:24, 50:23-32,51:7-26. See Ex.
`
`2011, Markus Decl., ¶27.
`
`8
`
`

`

`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
`
`B.
`
`The ’813 Patent Claims
`
`The ’813 patent includes 26 claims. Claims 1, 16, and 24 are independent.
`
`All of the claims relate to communicating authentication information from an
`
`electronic ID device.
`
`C.
`
`Prosecution History of the ’813 Patent
`
`The ’813 patent issued on November 5, 2013 from U.S. Application No.
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`13/237,184 (“’184 Application”) filed on September 20, 2011. The ’729
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`Application claims the benefits of multiple patents and patent applications, the
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`earliest of which, U.S. Provisional application no. 60/775,046, has a filing date of
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`Feb. 21, 2006.
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`The ’184 Application was subject to a thorough examination by Examiner
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`Calvin Cheung. See Exs. 1207-1212. During prosecution, the Applicant and the
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`Examiners discussed the application and prior art in detail, both through paper
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`submissions and telephonic interviews. See Exs. 1207-1211. Ultimately,
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`Examiner Cheung allowed the ’184 Application (Ex. 1212, 5-9) over a large body
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`of cited prior art. See Ex. 1201, ’813 patent, 2-3. Examiner Cheung indicated that
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`he allowed the claims of the ’184 Application because the prior art, taken either
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`individually or in combination with other prior art of record, failed to disclose,
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`suggest, teach, or render obvious the claimed limitations in the context of the
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`invention as a whole. See Ex. 1212, 6-9.
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`III. OVERVIEW OF THE ASSERTED PRIOR ART
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`A. Maes (Ex. 1213)
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`An “object of [Maes’] present invention” is to provide a PDA that is
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`“compatible with the current infrastructure (i.e., immediately employed without
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`having to change the existing infrastructure)” and in which the user can store all
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`their financial card information. Ex. 1213, Maes, 2:23-49, 7:61-7:19. See Ex.
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`2011, Markus Decl., ¶31. When the user needs to conduct a transaction, the PDA
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`writes selected card information to a smartcard (“Universal Card”) that is swiped
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`across a sales terminal. Ex. 1213, Maes, 4:1-11, 2:23-30.
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`A user of Maes enrolls for the service. Id., 6:56-67. Prior to conducting a
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`transaction, the user connects the PDA to the central server of the service provider
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`in a “client/server” mode to download a temporary digital certificate. Id., 3:39-52.
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`After downloading the certificate, the PDA initiates financial transactions without
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`connecting to a server, in what is called “local mode.” Id., 3:52-67, Figs. 5-6.
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`Where the Maes PDA is being used with a sales terminal that supports
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`electronic data transfer, the local mode operates as shown below:
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`Id., 3:53-467, 12:5-29, Fig. 5. The user selects a card stored in the PDA. Id., 12:5-
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`29. The PDA determines that the user is authorized to initiate the transaction by
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`performing local verification (i.e., verification on the PDA) of the user’s biometric
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`and/or PIN, and also confirming the digital certificate is valid. Id., 3:53-467, Fig.
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`5. If the verification is valid, the PDA determines the user is authorized to conduct
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`the transaction, and the card information is transmitted to a financial institution.
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`Id., 312:5-29, Fig. 5. See Ex. 2011, Markus Decl., ¶34.
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`Maes discloses an alternative local mode of operation that is designed to
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`“provide[] biometric security for transactions that do not involve electronic data
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`transfer” (e.g., transactions “performed remotely over the telephone”) using an
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`“authorization number.” Ex. 1213, Maes, 12:30-39, 6:50-55, 2:42-48. See Ex.
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`2011, Markus Decl., ¶35. In these situations, after the PDA locally verifies the
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`user using the biometrics and other information, it displays the authorization
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`number on the PDA screen. Ex. 1213, Maes, 12:30-13:5. The user then “verbally
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`communicate[s]” the card information and authorization number “to the merchant
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`in order to process the transaction.” Id., 12:30-13:5. The operation of this
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`alternative local mode is shown below:
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`B.
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`Jakobsson (Ex. 1214)
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`Jakobsson discloses an event detection and alert system for personal
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`identification systems. Ex. 2011, Markus Decl., ¶36. Specifically, “[t]he invention
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`addresses the[] shortcomings [of the prior art] by including an indication of the
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`occurrence of an event directly into the efficient computation of an identity
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`authentication code, where the verifier may efficiently verify the authentication
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`code and identify the signaling of an event state.” Ex. 1214, Jakobsson [0010].
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`See Ex. 2011, Markus Decl., ¶36. “Example reportable events include: device
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`tampering; an event external to the device detected by the device; an
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`environmental event, such as temperature exceeding or falling below a threshold;
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`static discharge; high or low battery power; geographic presence at a particular
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`location; confidence level in a biometric reading; and so on.” Ex. 1214, Jakobsson,
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`[0011]; Ex. 2011, Markus Decl., ¶36.
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`Jakobsson’s user device (such as a key fob or telephone, Ex. 1214,
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`Jakobsson, [0016]) generates an “identity authentication code” that depends on
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`values including at least a dynamic variable, an event state, and a device secret. Id.
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`at [0017], [0020]; Ex. 2011, Markus Decl., ¶37. The identity authentication code is
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`sent with “one or more of a user identifier, a PIN, password, a biometric reading,
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`and other additional authentication information” to a verifier for verification. Ex.
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`1214, Jakobsson, [0021]; Ex. 2011, Markus Decl., ¶37.
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`C. Maritzen (Ex. 1215)
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`Maritzen discloses a toll booth payment system focused upon maintaining
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`anonymity. Ex. 2011, Markus Decl., ¶38. It recognizes “[a] situation that still
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`requires use of cash is in the collection of fees at vehicle-accessed payment
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`gateways such as toll booths, vehicular kiosks, smog-certification stations, and the
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`like.” Ex. 1215, Maritzen, [0003]. Maritzen explains that “[t]he collection of fees
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`at these gateways is time consuming