`571.272.7822
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`
`Paper No. 13
`Entered: March 18, 2019
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY, LLC,
`Patent Owner.
`_______________
`
`Case CBM2018-00026
`Patent 8,577,813
`_______________
`
`Before PATRICK R. SCANLON, GEORGIANNA W. BRADEN, and
`JASON W. MELVIN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`
`
`
`DECISION
`Denying Petitioner’s Request for Rehearing
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`
`CBM2018-00026
`Patent 8,577,813
`
`
`I.
`INTRODUCTION
`Apple Inc. (“Petitioner”) timely filed a Request for Rehearing under
`37 C.F.R. § 42.71(d) on January 9, 2019. Paper 12 (“Req. Reh’g”).
`Petitioner’s Request for Rehearing seeks reconsideration of our Decision
`(Paper 11, “Decision”) entered on December 10, 2018, denying institution of
`a covered business method patent review of claims 1–26 of U.S. Patent
`No. 8,577,813 B2 (Ex. 1001, “the ’813 patent”). See Decision 24.
`Petitioner alleges the Board erred in (1) interpreting and applying Alice step
`1 by failing to consider the nature of the claims as a whole and (2) failing to
`analyze the ’813 patent under Alice step 2. Reh’g Req. 1–2. Petitioner
`requests that its Request for Rehearing be referred to an expanded panel for
`decision. Id. at 2.
`For the reasons provided below, we deny Petitioner’s request.
`
`II. ANALYSIS
`
`A request for rehearing “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.”
`37 C.F.R. § 42.71(d). The party challenging a decision bears the burden of
`showing the decision should be modified. Id. When rehearing a decision on
`a petition, a panel will review the decision for an abuse of discretion.
`37 C.F.R. § 42.71(c).
`
`A. Alice Step 1 and the Nature of the Claims as a Whole
`
`Petitioner challenges our decision because it contends our
`“conclusions under Alice step 1 cannot be reconciled with [our] own
`findings.” Reh’g Req. 3. Specifically, Petitioner argues:
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`CBM2018-00026
`Patent 8,577,813
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`[t]he [Decision Denying Institution] first finds – correctly – that
`“each step uses a feature that was known in the art” and “the steps
`appear to be implemented in a conventional manner using non-
`specific software.” ([Decision] 12.) However, the Board later
`contradicts itself by concluding that the claims are not abstract
`because the same features are “used in a specific order, each of
`which is narrowly configured to the claimed invention as an
`improvement to the technology.” ([Decision] 23.).
`Reh’g Req. 3.
`We do not understand how finding specific limitations to have been
`known in the art contradicts a finding that such known limitations put into a
`specific order narrowly configures the claimed invention so that it is not an
`abstract idea. Nor do we agree with Petitioner that the specific order of a
`claim, when viewed as a whole, cannot move a claim invention away from
`the realm of the abstract. See McRO, Inc. v. Bandai Namco Games Am. Inc.,
`837 F.3d 1299, 1313 (Fed. Cir. 2016) (“Whether at step one or step two of
`the Alice test, . . . a court must look to the claims as an ordered combination,
`without ignoring the requirements of the individual steps.”).
`Petitioner argues the Board repeatedly misconstrues Petitioner’s
`argument as being that the claims require simply “verifying an account
`holder’s identity based on codes or account holder information” with
`nothing more. Reh’g Req. 6 (citing Decision 22). Yet, the Petition
`specifically states:
`The ’813 patent fails the first step of Alice because the claims are
`directed to the abstract idea of verifying an account holder’s identity
`based on codes and/or information related to the account holder before
`enabling a transaction. See Ex-1002, Shoup-Decl. ¶ 78.
`Pet. 44.
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`Patent 8,577,813
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`Although claim 1 is limited to a computer system, the underlying
`problem that the claim purports to solve is age old: verifying the
`identity of individuals and other entities seeking access to certain
`privileges.
`
`Id.
`
`For the foregoing reasons, claim 1 of the ’813 patent is directed to the
`unpatentable abstract idea of verifying an account holder’s identity
`based on codes and/or information related to the account holder before
`enabling a transaction. See Ex-1002, Shoup-Decl. ¶ 84.
`Id. at 52.
`
`
`Petitioner then contends the Board erroneously conflates an Alice step
`2 analysis under Alice step 1, because the Board improperly concludes that
`the claims “require more than simply verifying an account holder’s
`identity.” Reh’g Req. 4 (quoting Decision 22). Petitioner now
`acknowledges that the claims include other limitations, but asserts that
`“these generic components and techniques are used in conventional ways –
`as the patent repeatedly emphasizes and as the Board itself found at
`[Decision] 12 – and do not change the fact that the claim as a whole is
`directed to the abstract idea of verifying an account holder’s identity.” Id. at
`6. To support its position, Petitioner argues the Board erred in applying the
`Federal Circuit’s decisions in Secured Mail Solutions and Smart Sys.
`Innovations (Reh’g Req. 7), and relies on a recently decided case unrelated
`to the ’817 patent and with different claim limitation to indicate that
`verifying an account holder’s identity is an abstract idea. Id. at 10 (citing
`Asghari-Kamrani and TeleSign Corp. v. Twilio, Inc., No. 3:18-cv-03279-
`VC, Dkt. No. 219, at *2 (N.D. Cal. Oct. 19, 2018), appeal docketed, No. 19-
`1312 (Fed. Cir. Dec. 14, 2018)).
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`Patent 8,577,813
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`Despite Petitioner’s argument that “[t]here is no indication that any of
`these elements are narrowed from their broadest, conventional
`configuration” (Reh’g Req. 10), we disagree. As explained in our Decision,
`we find that these claims are directed to an improvement in the security of
`mobile devices by using a biometric sensor, a user interface, a
`communication interface, and a processor working together to generate a
`time varying or other type of code that can be used for a single transaction,
`preventing the merchant from retaining identifying information that could be
`used fraudulently in subsequent transactions. Decision 22 (citing Ex. 1001,
`52:1–29). We also find that the challenged claims are tied to a tangible
`device with a biometric sensor, user interface, processor, and other elements
`that are used in a specific order. Id. at 22–23 (citing Ex. 1001, 51:65–
`52:29). This is important, even if some of these elements were known
`previously in the art, because our analysis is under 35 U.S.C. § 101 and not
`35 U.S.C. § 103. Thus, our ultimate conclusion in the Decision that the
`claims recite a specific arrangement of components or steps that accomplish
`a desired result for a known problem and are not deemed an abstract idea
`under 35 U.S.C. § 101 and the prevailing case law. Id. at 23.
`Petitioner has not shown how we overlooked or misapprehended its
`arguments or evidence as required by 37 C.F.R. § 42.71(d). Rather,
`Petitioner uses its Request for Rehearing as an opportunity to reargue its
`position; a position with which we disagree. Merely disagreeing with our
`analysis or conclusions does not serve as a proper basis for a rehearing. It is
`not an abuse of discretion to provide analysis or conclusions with which a
`party disagrees. Thus, Petitioner’s challenge does not meet the standard set
`forth for a request for rehearing.
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`B. Analysis of the ’813 Patent Under Alice Step 2
`
`Petitioner contends that because the Board erred in its step 1 analysis,
`the Board further erred by not analyzing the challenged claims under Alice
`step 2. Reh’g Req. 13. According to Petitioner, the challenged claims fail
`under Alice step 2 because they do not recite any inventive concept that
`amounts to significantly more than an abstract idea. Id. (citing Pet. 58–60).
`Petitioner has not shown how we overlooked or misapprehended its
`arguments or evidence with regards to our analysis or conclusion under Alice
`step 1. As discussed above and in the Decision, because we find the claims
`are not directed to an abstract idea, we do not proceed to the second step of
`the Alice test to make a determination as to whether the challenged claims
`describe an inventive concept. See Decision 23.
`
`C. Request for an Expanded Panel
`
`Regarding Petitioner’s request for an expanded panel to address its
`Request for Rehearing in order to maintain uniformity of the Board’s
`decisions. Reh’g Req. 2.
`Our governing statutes and regulations do not provide for parties to
`request, or panels to authorize, an expanded panel. See generally 35 U.S.C.
`§ 6; 37 C.F.R. §§ 41.1–42.412. The Chief Judge may consider panel
`expansions upon a “suggestion” from a judge, panel, or party. PTAB SOP 1,
`15; see also Apple Inc. v. Rensselaer Polytechnic Inst., Case IPR2014-
`00319, slip op. at 2 n.1 (PTAB Dec. 12, 2014) (Paper 20) (expanded panel)
`(per curiam). The members of the Board deciding an institution matter are
`not authorized to select themselves or, of their own accord, select other
`Board members to decide the matter, upon request of a party or otherwise.
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`As indicated in the Standard Operating Procedure, the Chief Judge, on
`behalf of the Director, may act to expand a panel on a suggestion from a
`judge or panel. PTAB SOP 1 at 1. The standard operating procedure
`exemplifies some of the reasons for which the Chief Judge may expand a
`panel. PTAB SOP 1, 15 (§ III.M). For example, an expanded panel may be
`appropriate “where appropriate, to secure and maintain uniformity of the
`Board’s decisions, e.g., in related cases ordinarily involving different three
`judge panels.” Id. (§ III.M.1). The Standard Operating Procedure creates
`“internal norms for the administration of PTAB” but “does not create any
`legally-enforceable rights.” PTAB SOP 1.
`In this case, the acting-Chief Judge has considered Petitioner’s
`suggestion for an expanded panel, but has determined that an expanded
`panel is not warranted.
`
`III. CONCLUSION
`
`After considering Petitioner’s arguments for rehearing, we determine
`Petitioner has not carried its burden of showing that we misapprehended or
`overlooked any matter or that the Decision denying institution of inter partes
`review was an abuse of discretion.
`
`IV. ORDER
`
`It is hereby ORDERED that Petitioner’s request for rehearing is
`denied.
`
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`CBM2018-00026
`Patent 8,577,813
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`PETITIONER:
`
`Monica Grewal
`Benjamin Fernandez
`WILMER CUTLER PICKERING HALE AND DORR LLP
`Monica.grewal@wilmerhale.com
`Ben.fernandez@wilmerhale.com
`
`
`
`PATENT OWNER:
`
`Jim Glass
`Tigran Guledjian
`Christopher Mathews
`Nima Hefazi
`Richard Lowry
`QUINN EMANUEL URQUHART & SULLIVAN LLP
`jimglass@quinnemanuel.com
`tigranguledjian@quinnemanuel.com
`chrismathews@quinnemanuel.com
`nimahefazi@quinnemanuel.com
`richardlowry@quinnemanuel.com
`
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