Trials@uspto.gov
`571-272-7822
`
`Paper 11
`Entered: December 10, 2018
`
`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 B2
`____________
`
`Before PATRICK R. SCANLON, GEORGIANNA W. BRADEN, and
`JASON W. MELVIN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`571-272-7822
`
`Paper 11
`Entered: December 10, 2018
`
`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 B2
`____________
`
`Before PATRICK R. SCANLON, GEORGIANNA W. BRADEN, and
`JASON W. MELVIN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`CBM2018-00026
`Patent 8,577,813 B2
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`
`I. INTRODUCTION
`This is a preliminary proceeding to decide whether, under § 18
`of the Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125
`Stat. 284, 331 (2011) (“AIA”), a covered business method patent
`review of U.S. Patent No. 8,577,813 B2 (Ex. 1001, “the ’813 patent”
`or “the challenged patent”), should be instituted under 35 U.S.C.
`§ 324(a).1 A covered business method patent review may not be
`instituted “unless . . . the information presented in the petition . . . , if
`such information is not rebutted, would demonstrate that it is more
`likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.” 35 U.S.C. § 324(a); see 37 C.F.R. § 42.208. We have
`authority under 35 U.S.C. § 324(a).
`Apple Inc. filed a Petition requesting covered business method
`patent review of claims 1–26 of the challenged patent. Paper 3
`(“Pet.”), 1, 42. Patent Owner timely filed a Preliminary Response.
`Paper 7 (“Prelim. Resp.”).
`Upon consideration of the record, as explained in detail below,
`we determine that the ’813 patent is a covered business method patent,
`but that Petitioner has not shown it is more likely than not to prevail,
`so we deny the Petition and do not institute a covered business method
`review proceeding.
`
`
`1 GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309, 1310 (Fed. Cir. 2015)
`(describing transitional program for review of covered business
`method patents, pursuant to the AIA, as subject to “the ‘standards and
`procedures of[] a post-grant review under . . . 35 U.S.C. §§ 321–329,’”
`absent exceptions not applicable here (alteration in original) (quoting
`AIA § 18(a)(1))).
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`A. Related Matters
`As required by 37 C.F.R. § 42.8(b)(2), each party identifies
`several judicial or administrative matters that would affect or be
`affected by a decision in this proceeding, including concurrently filed
`CBM2018-00024 and CBM2018-00025. Pet. 4–5; Paper 4, 2 (Patent
`Owner’s Mandatory Notices). Petitioner does not identify IPR2018-
`00067, which instituted a trial proceeding with a different Petitioner on
`many of the same claims of the ’813 patent under 35 U.S.C. § 103(a).
`Prelim. Resp. 14; see Unified Patents Inc. v. Universal Secure Registry
`LLC, Case IPR2018-00067, slip op. 4 (PTAB, May 2, 2018) (Paper
`14).
`
`B. The ’813 Patent
`The ’813 patent is titled “Universal Secure Registry” and is
`directed to authenticating a user using biometric and secret information
`provided to a user device, encrypted, and sent to a secure registry for
`validation. Ex. 1001, (54), Abstract. The ’813 patent issued
`November 5, 2013, from an application filed September 20, 2011.
`Id. at (45), (22). The ’813 patent includes a number of priority claims,
`including dates as early as February 21, 2006. Id. at (63), (60), 1:6–32.
`1. Written Description
`The specification describes one aspect of the invention as an
`“information system that may be used as a universal identification
`system and/or used to selectively provide information about a person to
`authorized users.” Id. at 3:65–4:1. One method described for
`controlling access involves “acts of receiving authentication
`information from an entity at a secure computer network,
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`communicating the authentication information to the secure registry
`system, and validating the authentication information at the secure
`registry system.” Id. at 4:43–48. The “universal secure registry”
`(“USR”) is described as a computer system with a database containing
`entries related to multiple people, with a variety of possible
`information about each person, including validation, access, and
`financial information. Id. at 9:35–12:18.
`Validation information in the ’813 patent “is information about
`the user of the database to whom the data pertains and is to be used by
`the USR software 18 to validate that the person attempting to access
`the information is the person to whom the data pertains or is otherwise
`authorized to receive it.” Id. at 12:19–23. Such information must
`“reliably authenticate the identity of the individual” and may include
`“a secret known by the user (e.g., a pin, a phrase, a password, etc.), a
`token possessed by the user that is difficult to counterfeit (e.g., a secure
`discrete microchip), and/or a measurement such as a biometric (e.g., a
`voiceprint, a fingerprint, DNA, a retinal image, a photograph, etc.).”
`Id. at 12:23–31. The ’813 patent describes using such information in
`combination with other information “to generate a one-time
`nonpredictable code which is transmitted to the computer system” and
`used “to determine if the user is authorized access to the USR
`database.” Id. at 12:50–60; see id. at 45:55–46:36. According to the
`’813 patent, certain systems may relay communication between a user
`device and the secure registry through a point-of-sale (“POS”) device.
`Id. at 43:4–44:31.
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`One such system embodiment is illustrated in Figure 31,
`reproduced below.
`
`
`As shown above, in Figure 31, system 350 facilitates financial
`transactions using point-of-sale device 354, user device 352, and USR
`356, which can communicate with one another wirelessly over network
`357. Id. at 43:4–15. The ’813 patent defines the term “financial
`transaction” can include any of sales transactions including
`transactions conducted on-line or at a point of sale using credit or debit
`accounts, banking transactions, purchases or sales of investments and
`financial instruments or generally the transfer of funds from a first
`account to a second account. Id. at 43:6–12.
`2. Illustrative Claims
`Petitioner challenges claims 1–26. Pet. 1. Claims 1, 16, and 24
`
`are independent. Claims 1 and 24 are illustrative of the challenged
`subject matter and reproduced below.
`1.
`An electronic ID device configured to allow a user
`to select any one of a plurality of accounts associated with
`the user to employ in a financial transaction, comprising:
`a biometric sensor configured to receive a biometric input
`provided by the user;
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`a user interface configured to receive a user input
`including secret information known to the user and
`identifying information concerning an account selected by
`the user from the plurality of accounts;
`a communication interface configured to communicate
`with a secure registry;
`a processor coupled to the biometric sensor to receive
`information concerning the biometric input, the user
`interface and the communication interface, the processor
`being programmed to activate the electronic ID device
`based on successful authentication by the electronic
`ID . . . secret information, the processor also being
`programmed such that once the electronic ID device is
`activated the processor is configured to generate 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, and to communicate the
`encrypted authentication information via the
`communication interface to the secure registry; and
`wherein the communication interface is configured to
`wirelessly transmit the encrypted authentication
`information to a point-of-sale (POS) device, and wherein
`the secure registry is configured to receive at least a
`portion of the encrypted authentication information from
`the POS device.
`Ex. 1001, 51:65–52:29.
`24. A method of controlling access to a plurality of
`accounts, the method comprising acts of:
`generating, with an electronic ID device, a non-
`predictable value;
`generating, with the electronic ID device, encrypted
`authentication information from the non-predictable
`value generated by the electronic ID device,
`information associated with at least a portion of a
`biometric of the user received by the electronic ID
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`device, and secret information provided to the
`electronic ID device by the user;
`communicating the encrypted authentication
`information from the electronic ID device to a secure
`registry via a point-of-sale (POS) device to
`authenticate or not authenticate the electronic ID
`device with the secure registry;
`authorizing the POS device to initiate a financial
`transaction involving a transfer of funds to or from the
`account selected by the user when the encrypted
`authentication information is successfully
`authenticated; and
`denying the POS device from initiation of the financial
`transaction involving a transfer of funds to or from the
`account selected by the user when the encrypted
`authentication information is not successfully
`authenticated.
`Id. at 54:24–46.
`C. Asserted Ground of Unpatentability
`Petitioner challenges the patentability of claims 1–26 of the
`
`’827 patent under 35 U.S.C. § 101. Pet. 3, 42. Petitioner relies upon
`the Declaration of Victor Shoup, Ph.D. (Ex. 1002) to support its
`challenges.
`II. DISCUSSION OF PRELIMINARY MATTERS
`A. Standing to File a Petition for CBM Review
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. Section 18
`limits reviews to persons or their privies who have been sued or
`charged with infringement of a “covered business method patent.”
`AIA § 18(a)(1)(B); see 37 C.F.R. § 42.302. As discussed above in
`Section I.A., Petitioner represents it has been sued for infringement of
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`the ’813 patent and is not estopped from challenging the claims on the
`grounds identified in the Petition. Pet. 21–22 (citing Ex. 1003).
`B. Qualifying as a CBM Patent for CBM Review
`A threshold question is whether the ’813 patent is a “covered
`business method patent,” as defined by the AIA. The AIA defines a
`“covered business method patent” as “a patent that claims a method or
`corresponding apparatus for performing data processing or other
`operations used in the practice, administration, or management of a
`financial product or service . . . .” AIA § 18(d)(1); see 37 C.F.R.
`§ 42.301(a). “[Section] 18(d)(1) directs us to examine the claims when
`deciding whether a patent is a [covered business method] patent.” Blue
`Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016);
`Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir.
`2016) (CBM patents “are limited to those with claims that are directed
`to methods and apparatuses of particular types and with particular uses
`‘in the practice, administration, or management of a financial product
`or service’” (emphasis added); see also Secure Axcess, LLC v. PNC
`Bank Nat’l Assoc., 848 F.3d 1370, 1377 (Fed. Cir. 2017) (“The
`statutory definition by its terms makes what a patent ‘claims’
`determinative of the threshold requirement for coming within the
`defined class” of a covered business method patent.) (cert. granted,
`judgement vacated as moot by PNC Bank Nat. Ass’n. v. Secure Axcess,
`LLC, 138 S. Ct. 1982 (2018)).
`A patent need have only one claim directed to a covered
`business method to be eligible for review. See Transitional Program
`for Covered Business Method Patents—Definitions of Covered
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`Business Method Patent and Technological Invention; Final Rule,
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012); cf. Versata Dev. Grp.,
`Inc. v. SAP Am., Inc., 793 F.3d 1306, 1326–27 (Fed. Cir. 2015)
`(accepting single claim analysis to determine whether to institute a
`covered business method patent review). “When properly construed in
`light of the written description, the claim need only require one of a
`‘wide range of finance-related activities.’” Secure Axcess, 848 F.3d at
`1381; see also Versata, 793 F.3d at 1312–13, 1325–26 (identifying a
`qualifying claim); Blue Calypso, 815 F.3d at 1339–40 (identifying a
`qualifying claim); SightSound Techs., LLC v. Apple Inc., 809 F.3d
`1307, 1315–16 (Fed. Cir. 2015) (identifying a qualifying claim).
`The parties dispute whether the ’813 patent is a “covered
`business method patent,” as defined in the AIA and 37 C.F.R.
`§ 42.301. See Pet. 22–33; Prelim. Resp. 16–34. It is Petitioner’s
`burden to demonstrate that the ’813 patent is a covered business
`method patent. See 37 C.F.R. § 42.304(a). For the reasons discussed
`below, we determine Petitioner has made a sufficient showing that the
`’813 patent qualifies as a “covered business method patent.”
`1. Financial Product or Service
`Petitioner identifies several challenged claims that it contends
`satisfy the threshold financial requirement on the basis of their claim
`language. Pet. 24 (identifying claims 1, 7, 12–14, 17, 20–26).
`According to Petitioner, claims 1 and 24 (and those that depend from
`them) disclose a device and method for providing or denying access to
`information related to a user stored in a secure database in the context
`of a “financial transaction,” while dependent claims 7, 12–14, 17, 20–
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`23, and 25–26 all explicitly recite financial transactions, user account
`numbers, purchases, and/or selection of products or services. Id.
`Additionally, Petitioner argues that all independent claims recite a
`“point of sale” or “POS” device. Id.
`Petitioner contends the patent specification makes clear that the
`“accounts” recited in all challenged claims can be financial in nature.
`Id. (citing Ex. 1001, 6:66–7:1 (“In still another aspect, a user device is
`configured to allow a user to select any one of a plurality of accounts
`associated with the user to employ in a financial transaction.”), 7:47–
`50 (“authorizing the POS device to initiate a financial transaction
`involving a transfer of funds to or from the account selected by the
`user when the encrypted authentication information is successfully
`authenticated”)).
`We agree with Petitioner, because the challenged claims on their
`face explicitly recite financial terms and a financial product and/or
`service. See, e.g., Ex. 1001, 51:65–52:53 (claims 1, 16, and 24 recite a
`“point-of-sale (POS) device”; claim 7 received a “financial
`transaction”; claim 14 recites “options for purchase”; claims 15, 23,
`and 26 recite “at least one product or service”; claim 24 recites
`“financial transaction,” “transfer of fund to or from the account”;
`claims 22 and 25 recite “displaying option for purchase”).
`Additionally, the specification defines a financial transaction as
`including “transactions conducted on-line or at a point of sale using
`credit or debit accounts, banking transactions, purchases or sales of
`investments and financial instruments or generally the transfer of funds
`from a first account to a second account.” See Ex. 1001, 43:6–12.
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`2. Exclusion for Technological Inventions
`Petitioner contends the ’813 patent is not directed to a
`“technological invention” because it leverages known technology for
`verifying an account holder’s identity based on codes and/or
`information related to the account holder before enabling a transaction.
`Pet. 28. Indeed, according to Petitioner, the ’813 patent concedes that
`the claimed invention is not tied to any particular technology, and can
`be implemented in “a general-purpose computer system” using “a
`commercially available microprocessor” running “any commercially
`available operating system” and that the secure registry database itself
`“may be any kind of database,” which can communicate using “any
`[network] protocol.” Id. at 29 (quoting Ex 1001, 10:9–24, 11:4–17;
`citing Ex 1002 ¶ 56).
`Patent Owner disputes Petitioner’s contentions, arguing that the
`’813 patent claims a “technological invention” and, thus, is ineligible
`for CBM review. Prelim. Resp. 16–34. Patent Owner specifically
`argues: (1) Petitioner fails to analyze the claims’ limitations in detail
`and merely makes conclusory statements regarding the claims’
`purported lack of novelty and obviousness without pointing to a single
`prior art reference; (2) Petitioner’s assertion that the claims do not
`disclose a “technological feature” improperly rests on only hardware
`components and fails to analyze the software; (3) Petitioner fails to
`address the claimed subject matter as a whole; and (4) Petitioner
`neglects software contributions in the claims and mischaracterizes the
`technical problems addressed and the technical solutions provided by
`the ’813 patent. Id. at 16–17.
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`According to Patent Owner, the ’813 patent provides a technical
`solution to the technical problem of “how to securely and reliably
`authenticate the identity of a user of an electronic device and
`authenticate the electronic device itself for use in a distributed
`electronic transaction involving a point-of-sale device, even when
`distributed electronic transactions necessarily require electronic
`transmission of data vulnerable to interception to the provider.” Id. at
`21–22. Patent Owner further argues that the Petition fails to appreciate
`the contributions of the software that functions as part of the claimed
`invention to provide a technical solution. Id.
`Despite Patent Owner’s arguments, we agree with Petitioner and
`find that each step uses a feature that was known in the art as of the
`patent’s earliest priority date. See Pet. 28–29 (citing Ex. 1001, 10:9–
`24, 11:4–17). Additionally, as noted by Petitioner, the steps appear to
`be implemented in a conventional manner using non-specific software.
`See Pet. 28.
`3. Conclusion
`Based on the foregoing analysis, we are satisfied at this time that
`the ’813 patent meets the statutory definition under AIA Section
`18(d)(1) and is eligible for CBM review. See Blue Calypso, 815 F.3d
`at 1340; see also, e.g., Secure Axcess, 848 F.3d at 1381 (“Necessarily,
`the statutory definition of a CBM patent requires . . . a claim that
`contains . . . a financial activity element.”).
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`III. DISCUSSION OF CHALLENGE
`A. Claim Construction
`In a covered business method patent review, we currently
`construe claim terms in an unexpired patent according to their broadest
`reasonable construction in light of the specification of the patent in
`which they appear. 37 C.F.R. § 42.200(b); Versata Dev. Grp., Inc. v.
`SAP Am., Inc., 793 F.3d 1306, 1328 (Fed. Cir. 2015) (affirming use of
`the broadest reasonable construction standard in a covered business
`method patent review); cf. Cuozzo Speed Techs. LLC v. Lee, 136 S. Ct.
`2131, 2144–46 (2016) (upholding the use of the broadest reasonable
`interpretation standard in an inter partes review). Claim terms
`generally are given their ordinary and customary meaning, as would be
`understood by one of ordinary skill in the art in the context of the
`entire disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257
`(Fed. Cir. 2007). To rebut this presumption by acting as a
`lexicographer, the patentee must give the term a particular meaning in
`the specification with “reasonable clarity, deliberateness, and
`precision.” In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994). In
`addition, the broadest reasonable construction of a claim term cannot
`be so broad that the construction is unreasonable under general claim
`construction principles. Cf. Microsoft Corp. v. Proxyconn, Inc., 789
`F.3d 1292, 1298 (Fed. Cir. 2015) (discussing broadest reasonable
`construction in the context of an inter partes review).
`Petitioner proposes constructions for several terms, including
`“biometric input,” “secret information,” “authentication information,”
`“POS device,” and “secure registry.” Pet. 33–42. Patent Owner does
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`not address directly Petitioner’s proposed constructions. Prelim.
`Resp. 12–13. Rather, Patent Owner contends construction of the claim
`terms is unnecessary. Id.
`We agree with Patent Owner. Specifically, we conclude that no
`term needs to be construed expressly in order for us to determine
`whether a covered business method patent review should be instituted.
`See Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co. Ltd.,
`868 F.3d 1013, 1017 (Fed. Cir. 2017); Vivid Techs., Inc. v. Am. Sci. &
`Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999).
`B.
`Alleged Unpatentability of Claims 1–26 of the ’813 Patent under
`35 U.S.C. § 101.
`Petitioner contends claims 1–26 of the ’813 patent are
`unpatentable under 35 U.S.C. § 101. Pet. 42–69. Patent Owner
`disputes Petitioner’s contentions. Prelim. Resp. 34–54. For reasons
`that follow, we determine Petitioner has failed to demonstrate it is
`more likely than not it will prevail on its challenge to the claims.
`1. § 101 is a Proper Ground in a CBM Review
`A challenge under 35 U.S.C. § 101 is a proper ground to present
`in a CBM proceeding. See Versata, 793 F.3d at 1330 (“[T]he PTAB
`acted within the scope of its authority delineated by Congress in
`permitting a § 101 challenge under AIA § 18.”).
`2. Principles of Law
`A patent may be obtained for “any new and useful process,
`machine, manufacture, or composition of matter, or any new and
`useful improvement thereof.” 35 U.S.C. § 101. The Supreme Court
`has held that this statutory provision contains an important implicit
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`exception: laws of nature, natural phenomena, and abstract ideas are
`not patentable. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct.
`2347, 2354 (2014); Gottschalk v. Benson, 409 U.S. 63, 67 (1972)
`(“Phenomena of nature, though just discovered, mental processes, and
`abstract intellectual concepts are not patentable, as they are the basic
`tools of scientific and technological work.”). Notwithstanding that a
`law of nature or an abstract idea, by itself, is not patentable, the
`practical application of these concepts may be deserving of patent
`protection. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132
`S. Ct. 1289, 1293–94 (2012).
`In Alice, the Supreme Court reaffirmed the framework set forth
`previously in Mayo “for distinguishing patents that claim laws of
`nature, natural phenomena, and abstract ideas from those that claim
`patent-eligible applications of those concepts.” Alice, 134 S. Ct. at
`2355. The first step in the analysis is to “determine whether the claims
`at issue are directed to one of those patent-ineligible concepts” such as
`an “abstract idea.” Id. We must take care, however, when determining
`if a claim is directed to an “abstract idea.” “Describing the claims at
`such a high level of abstraction and untethered from the language of
`the claims all but ensures that the exceptions to § 101 swallow the
`rule.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1337 (Fed.
`Cir. 2016).
`If the claims are directed to a patent-ineligible concept or
`abstract idea, the second step in the analysis is to consider the elements
`of the claims “individually and ‘as an ordered combination’” to
`determine whether there are additional elements that “‘transform the
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`nature of the claim’ into a patent-eligible application.” Alice, 134
`S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1298, 1297). In other
`words, the second step is to “search for an ‘inventive concept’—i.e., an
`element or combination of elements that is ‘sufficient to ensure that the
`patent in practice amounts to significantly more than a patent upon the
`[ineligible concept] itself.’” Id. (quoting Mayo, 132 S. Ct. at 1294)
`(brackets in original). “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.” McRO, Inc.
`v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1313 (Fed.
`Cir. 2016). Yet, the prohibition against patenting an abstract idea
`“cannot be circumvented by attempting to limit the use of the formula
`to a particular technological environment or adding insignificant
`postsolution activity.” Bilski v. Kappos, 561 U.S. 593, 610–11 (2010)
`(citation and internal quotation marks omitted).
`In a covered business method review proceeding, “the petitioner
`has the burden from the onset to show with particularity why the patent
`it challenges is unpatentable.” Harmonic Inc. v. Avid Tech., Inc.,
`815 F.3d 1356, 1363 (Fed. Cir. 2016) (citing 35 U.S.C. § 312(a)(3)
`(requiring inter partes review petitions to identify “with particularity
`. . . the evidence that supports the grounds for the challenge to each
`claim”)). This burden of persuasion never shifts to Patent Owner. See
`Dynamic Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378
`(Fed. Cir. 2015) (discussing the burden of proof in inter partes
`review). Furthermore, Petitioner cannot satisfy its burden of proving
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`obviousness by employing “mere conclusory statements.” In re
`Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1380 (Fed. Cir. 2016).
`At this preliminary stage, using the framework set out in Alice
`and applying the above principles, we determine whether the
`information presented in the Petition demonstrates it is more likely
`than not Petitioner would prevail in establishing that the challenged
`claims are directed to ineligible subject matter.
`3. Whether the Challenged Claims are Directed to an Abstract
`Idea
`In the first step of our analysis, we determine whether the
`challenged claims are directed to a patent-ineligible concept, such as
`an abstract idea. See Alice, 134 S. Ct. at 2355. Petitioner contends that
`challenged 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.” Pet. 44 (citing
`Ex. 1002 ¶ 78). Using independent claim 1 as an exemplary claim,
`Petitioner argues that “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. (citing Ex. 1001,
`1:36–46).
`Petitioner argues that adding limitations using a computer
`database to the generic concept expressed in claim 1 does confer patent
`eligibility. Id. at 45 (citing Bilski, 561 U.S. at 612; CLS Bank Int’l v.
`Alice Corp. Pty., 717 F.3d 1269, 1300-01 (Fed. Cir. 2013), aff’d, 134
`S. Ct. 2347 (2014); Ex. 1002 ¶ 80). According to Petitioner, “[t]he
`patent specification also fails to meaningfully limit the breadth of the
`claimed abstract idea.” Id. at 49. Petitioner specifically argues that the
`
`17
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`CBM2018-00026
`Patent 8,577,813 B2
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`patent specification does not limit the claims to specific hardware or
`software, but instead emphasizes the broad and generic nature of
`components and systems in which the invention can be implemented.
`Id. at 49–50 (citing Ex. 1001, 10:1–4, 10:24–26, 10:58–60, 11:24–28).
`Petitioner notes that although the ’813 patent places significant
`emphasis on database security it imposes no limits on how to
`implement such security in the database, how to communicate with the
`secure database, or how to implement these concepts in the Electronic
`ID device. Id. at 50–51 (citing Ex. 1001, Abstract, 1:12–19, 4:1–5,
`4:21–36, 11:28–35; Ex. 1002 ¶ 82).
`Petitioner further argues that claim 1 “recites generic computing
`functions, but does not claim to improve the functionality of any
`computer technology.” Id. at 47 (citing Bilski, 561 U.S. at 611).
`Petitioner compares challenged claim 1 to the claims in Secured Mail
`Solutions, 873 F.3d 905 (Fed. Cir. 2018). Pet. 46. In that case, the
`Federal Circuit considered several patents directed to a method for
`verifying the authenticity of a mail object, such as an envelope or
`package, using an identifier or barcode where a portion of the barcode
`was stored in a database. Secured Mail Solutions, 873 F.3d at 909.
`The Federal Circuit found that the claims recited “the abstract process
`of communicating information about a mail object using a personalized
`marking.” Id. at 911. The Federal Circuit specifically held that “the
`claims of Secured Mail’s patents are not directed to an improvement in
`computer functionality. For example, the claims are not directed to a
`new barcode format, an improved method of generating or scanning
`barcodes, or similar improvements in computer functionality.” Id.
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`CBM2018-00026
`Patent 8,577,813 B2
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`at 910.
`Petitioner also cites to the Federal Circuit’s holding in Smart
`Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d
`1364, 1372 −73 (Fed. Cir. 2017), where the court found that the
`generic functions of downloading, receiving, determining, verifying,
`and denying were not patent eligible without something more. Id. The
`Federal Circuit also pointed out that even if the claimed invention
`made financial transactions faster, they were still directed to patent
`ineligible subject matter because they “are not directed to specific rules
`that improve a technological process.” Id. Petitioner argues that
`challenged claim 1 similarly recites generic computing functions and
`does not claim to improve the functionality of any computer
`technology. Pet. 47.
`Petitioner then contends that “[t]he claimed verification method
`is also directed to an abstract concept for the additional reason that the
`claim recites nothing more than a mental process.” Id. at 48 (citing
`Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1145 (Fed.
`Cir. 2016) (“‘claims . . . directed to a mental process [are] a
`subcategory of unpatentable abstract ideas’ under Alice”). According
`to Petitioner, “a user seeking access to a private account could arrive at
`a bank and present a dynamic passcode.” Pet. 49. “The bank teller
`would then compare the received passcode to information in a
`spreadsheet containing an entry for the account holder. If the received
`code matches the expected code in the spreadsheet, access is granted.”
`Id. (citing Ex. 1002 ¶ 81).
`Lastly, Petitioner notes that the Patent Office recently rejected
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`CBM2018-00026
`Patent 8,577,813 B2
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`pending claims in four continuation applications of the ’813 patent
`under § 101 because they were “directed to the abstract idea of
`‘receiving and processing data.’” Id. at 51 (citing Exs. 1014–1017).
`According to Petitioner, the rejected claims cover substantially the
`same subject matter as those of the ’813 patent. Id. Petitioner then
`argues that the examiner “found that the elements of authenticating an
`identity and activation of an electronic device for use in transactions do
`not add ‘significantly more’ to the claims beyond this abstract idea.”
`Id. (citing Exs. 1014–1017).
`In response, Patent Owner contends Petitioner improperly strips
`elements from the claims and overly simplifies the claims to create its
`proposed abstract idea. Prelim. Resp. 36. Patent Owner warns that the
`“Supreme Court has expressed its reluctance to broadly apply these
`three narrow judicial exceptions” and that a claim must be reviewed as
`a whole otherwise the first step of Alice would be superfluous because
`any claim stripped of its novel aspects is likely to cover an abstract
`idea. Id. at 35–36 (citing Alice, 134 S. Ct. at 2354). Patent Owner
`argues that Petitioner ignores many key claim limitations that remove
`the claims from the realm of unpatentable subject matter. Patent
`Owner specifically argues:
`
`the specification shows that the claimed subject matter is
`directed to specific, concrete, technological improvements
`to secure distributed transaction approval systems that
`incorporate an electronic identification (ID) device that
`performs user identity authentication locally at the
`electronic ID device and/or generate
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