`PATENT TRIAL & APPEAL BOARD
`
`
`John D’Agostino
`In re Patent of:
`U.S. Patent No.: 8,036,988
`Issue Date:
`October 11, 2011
`Application No.: 12/902,399
`Filing Date:
`October 23, 2010
`Title:
`System and Method for Performing
`Secure Credit Card Transactions
`
`DECLARATION OF DR. JACK D. GRIMES, Ph.D.
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`
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`
`
`MasterCard, Exh. 1008, p. 1
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`
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`TABLE OF CONTENTS
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`Page
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`I.
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`INTRODUCTION .......................................................................................... 1
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`II. MATERIALS CONSIDERED ....................................................................... 1
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`III. BACKGROUND AND QUALIFICATIONS ................................................ 3
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`IV. STATE OF THE ART .................................................................................... 4
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`V.
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`LEVEL OF ORDINARY SKILL IN THE ART ............................................ 7
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`VI. CLAIM CONSTRUCTION ........................................................................... 8
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`VII. DISCUSSION OF RELEVANT PRIOR ART ............................................ 13
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`A.
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`B.
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`C.
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`Legal Standards .................................................................................. 13
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`Summary of My Opinions .................................................................. 16
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`U.S. Patent No. 6,422,462 to Cohen .................................................. 17
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`D. U.S. Patent No. 6,636,833 to Flitcroft et al. ....................................... 25
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`E.
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`F.
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`U.S. Patent No. 5,826,243 to Musmanno et al. .................................. 35
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`U.S. Patent No. 6,422,462 to Cohen as 102(e) Prior Art ................... 38
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`G. U.S. Patent No. 8,636,833 to Flitcroft as 102(e) Prior Art ................ 68
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`
`
`i
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`MasterCard, Exh. 1008, p. 2
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`I, Jack D. Grimes, Ph.D., declare as follows:
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`I.
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`INTRODUCTION
`(1)
`
`I submit this Declaration in support of MasterCard International
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`Incorporated’s “Petition for Inter Partes Review of U.S. Patent No. 8,036,988”
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`(“Petition”). I make this Declaration based upon personal knowledge and
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`experience in the relevant technical field, specifically related to systems and
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`methods for performing secure payment card transactions, and on my review and
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`consideration of related documents and information referenced in this Declaration.
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`I am not a lawyer and, consequently, this Declaration references, and is based on,
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`my understanding of certain legal principles as informed by conversations with
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`outside counsel for MasterCard International Incorporated (“MasterCard”).
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`(2)
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`I reside at 5025 Wine Cellar Drive, Sparks, NV. I am an independent
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`consultant. I have prepared this Declaration for consideration by the Patent Trial
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`and Appeal Board. I am over eighteen years of age and I would otherwise be
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`competent to testify as to the matters set forth herein if I am called upon to do so.
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`II. MATERIALS CONSIDERED
`(3)
`
`In developing my opinions below relating to the ’988 Patent, I have
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`considered the following materials:
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` Exhibit 1001 – U.S. Patent No. 8,036,988
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` Exhibit 1002 – File History for U.S. Patent No. 8,036,988
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`
`
`1
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`MasterCard, Exh. 1008, p. 3
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`
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` Exhibit 1003 – File History for U.S. Reexamination No. 90/012,517
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` Exhibit 1004 – U.S. Patent No. 6,422,462 (“Cohen”)
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` Exhibit 1005 – U.S. Patent No. 6,636,833 (“Flitcroft”)
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` Exhibit 1006 – U.S. Patent No. 5,826,243 (“Musmanno”)
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` Exhibit 1007 – Complaint in D’Agostino v. MasterCard, Inc. et al. (13-cv-
`
`0738)
`
` Exhibit 1009 – Excerpts from Random House Webster’s Unabridged
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`Dictionary, Second Edition (“Random House Webster”)
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` Exhibit 1010 – U.S. Patent No. 6,064,987 (“Walker”)
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` Exhibit 1011 – U.S. Patent No. 5,283,829 (“Anderson”)
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` Exhibit 1012 – ISO 8583 Financial Transaction Card Originated Messages –
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`Interchange Message Specifications (1992) (“ISO 8583”)
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` Exhibit 1013 – File History for U.S. Patent No. 7,840,486
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` Exhibit 1014 – Patent Trial and Appeal Board’s (“PTAB”) 3/7/14 CBM
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`Decision for U.S. Patent No. 8,036,988
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` Exhibit 1015 – Patent Owner’s 12/24/13 Preliminary Response to
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`Petitioner’s Request for CBM Patent Review of the ‘988 Patent
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` Exhibit 1016 – U.S. Provisional App. No. 60/079,884 for Cohen
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` Exhibit 1017 – U.S. Provisional App. No. 60/099,614 for Flitcroft
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` Exhibit 1018 – U.S. Provisional App. No. 60/098,175 for Flitcroft
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`
`
`2
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`MasterCard, Exh. 1008, p. 4
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`
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` Exhibit 1019 – U.S. Provisional App. No. 60/092,500 for Flitcroft
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`III. BACKGROUND AND QUALIFICATIONS
`(4)
`I earned B.S. and M.S. degrees in Electrical Engineering, and a Ph.D.
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`degree in Electrical Engineering (with a minor in Computer Science), all from
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`Iowa State University. I also earned an M.S. degree in Experimental Psychology
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`from the University of Oregon. I have been active in several professional societies
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`and have worked in the computer and electronics field for over forty (40) years
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`including teaching at two universities. Details of my education and work
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`experience are set forth in my curriculum vitae, which is attached as Appendix A.
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`(5)
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`From 1996 until 1999, I worked at Visa International (“Visa”) and was
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`Senior Vice President for Technology, Architecture & Strategy. My
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`responsibilities included developing the strategies for Visa in chip card technology,
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`management of large-scale software projects, and the evaluation of investments in
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`technology companies. My duties included management of two technology and
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`strategy groups containing over 30 people. One group provided chip card and
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`related technology development for new products and services, including SET
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`(Secure Electronic Transactions over the Internet). The other group was
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`responsible for the global network and processing architecture strategy to replace
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`the then current VisaNet services, providing credit card authorization and
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`settlement. I also served as an internal consultant on Internet payment systems.
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`
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`3
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`MasterCard, Exh. 1008, p. 5
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`
`
`(6)
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`I have reviewed United States Patent No. 8,036,9881 (“the ’988 patent”)
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`to D’Agostino. I have also reviewed the publications cited within this declaration
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`and referenced in the Petition submitted herewith.
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`IV. STATE OF THE ART
`(7) The technology for performing secure credit card purchases in connection
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`with remote commercial transactions was well known by the year 1999.
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`Credit Card Fraud
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`(8) There were, before the application leading to the ’988 patent was filed,
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`and are still today many well-known ways that an unauthorized user can obtain
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`your name, credit card number and expiration date. Credit cards have become so
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`widely used that fraud is a major problem and concern for most cardholders.
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`(9)
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`In attended, point-of-sale (POS) transactions, the cardholder’s signature
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`is to be compared to the signature written on the credit card. This provides
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`authentication that the person utilizing the credit card is, in fact, the cardholder. In
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`Europe, where chip cards are common, attended transactions typically require the
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`entry of a PIN at the point-of-sale.
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`(10) However, these solutions do not work for “remote transactions,” such as
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`on-line purchases using the Internet or for transactions over the telephone. In these
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`1 John D’Agostino, “System and Method for Performing Secure Credit Card
`
`Transactions,” U.S. Patent No. 8,036,988, issued October 11, 2011 (Exh. 1001).
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`
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`4
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`MasterCard, Exh. 1008, p. 6
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`
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`cases, the customer’s signature cannot be verified and there is no PinPad to provide
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`for the entry of a PIN.
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`(11) As a result, in remote transactions, the opportunity existed and exists for
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`an unauthorized user to provide a stolen credit card number with accompanying
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`info to conduct a purchase transaction. For example, for Internet transactions, it is
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`difficult to differentiate between an unauthorized user and the true cardholder
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`based on the credit card information provided for a transaction. The fraudulent
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`transaction can only be identified later (e.g., if the cardholder realizes that a
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`fraudulent transaction has occurred).
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`(12) To address these problems and the problem of credit card fraud generally,
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`several solutions were proposed, including the technology disclosed by U.S. Patent
`
`No. 6,422,462 to Cohen (Exh. 1004, “Cohen”), and by U.S. Patent No. 6,636,833
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`to Flitcroft et al. (Exh. 1005, “Flitcroft”).
`
`(13) One well-known solution to credit card fraud is creating a limited-use
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`credit card that is restricted to a single use. (See Cohen at C2:35-43; Flitcroft at
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`C6:53-56) Each of these single use cards has a unique card number that is
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`different from the master credit card account number. That way, if the card
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`number and accompanying info is subsequently stolen, that card number cannot be
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`used for a second purchase. After the card is used, it may be discarded.
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`(14) Another well-known solution to credit card fraud is creating a limited-use
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`
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`5
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`MasterCard, Exh. 1008, p. 7
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`
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`credit card with restrictions on its usage, such as limiting the dollar amount,
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`limiting the frequency of use, or limiting the merchant category where the card
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`may be used – such as for airline tickets or for clothing stores. (See Cohen at
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`C7:66-8:46; Flitcroft at C8:2-10). These limited use cards also have numbers that
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`are different from the master credit card account number. That way, the limited-
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`use card number cannot be used for purchases that are inconsistent with the
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`restrictions on its usage.
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`Repeating Credit Card Transactions
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`(15) It was also well known in the art before the time the ’988 patent
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`application was filed that you could call your bank and set up a repeating payment
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`account to pay for reoccurring charges, e.g., on a monthly basis for your health
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`club. For example, U.S. Patent No. 5,283,829 to Anderson (Exh. 1011,
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`“Anderson”) discloses that various banking institutions offer their subscribers the
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`option of automatically paying monthly reoccurring charges (such as car notes,
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`insurance premiums, mortgages, etc.) via automatic funds transfer (Anderson at
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`C1:57:63).
`
`(16) It was also well known in the art before the time the ’988 patent
`
`application was filed that these repeating payments could be set-up and charged to
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`a credit card account. For example, U.S. Patent No. 6,064,987 to Walker (Exh.
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`1010, “Walker”) discloses the use of credit cards for “installment plans” in which a
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`
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`6
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`MasterCard, Exh. 1008, p. 8
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`
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`user can set up a repeating transaction with a credit card to make payments at
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`various time intervals, such as once a month. (See Walker at C1:66-2:10; C4:25-
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`32; C4:37-40).
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`MCC Codes
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`(17) MCC codes were, before the time the ’988 patent application was filed,
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`used for assigning merchant type categories. MCC codes were typically created
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`and assigned to merchants in two separate steps. The first step involves the
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`creation of a merchant type category. The second step involves the assignment of
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`merchants as particular merchant types. The creation of the merchant type
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`category can, and often did, occur before the assignment of a specific merchant to
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`that merchant type. See Exh. 1012, ISO 8583 at 56-57 (Section 6), 127-128
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`(Annex C).
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`V. LEVEL OF ORDINARY SKILL IN THE ART
`(18) I understand from counsel that the level of ordinary skill in the art related
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`to the ’988 patent is important in assessing what certain claim terms mean, and
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`whether the invention claimed in the ’988 patent would have been obvious at the
`
`time it was made (or when the application was filed). In particular, I understand
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`from counsel that the content of a patent and prior art should be interpreted in the
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`way a person of ordinary skill in the art would have interpreted the patent and prior
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`art at the time or not long before the application for the ’988 patent was filed
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`
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`7
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`MasterCard, Exh. 1008, p. 9
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`
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`(January, 1999), using the broadest reasonable interpretation of the claim terms. In
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`my opinion, the level of ordinary skill in the art of the ’988 patent is a person
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`having a B.S. degree in Electrical Engineering or Computer Science, or the
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`equivalent experience, with at least three years of experience (or post-graduate
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`work) in payment card payment technologies, including experience in existing,
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`accepted remote payment card transaction practices in 1998-1999, such as methods
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`of performing secure credit card purchases of goods and services which reduces
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`the risk of potential fraud and theft by eliminating unauthorized access to a
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`consumer’s private credit card information.
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`(19) Based on my experience, I have an understanding of the capabilities of a
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`person of ordinary skill in the art. In particular, the basis for my familiarity with
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`the level of ordinary skill is my interaction with large numbers of workers in the
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`payment services and computer fields who were at this level of skill. I have
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`supervised and directed many such persons over the course of my career. Further,
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`I had those capabilities myself at the time the ’988 patent was filed. In reaching
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`this opinion, I have considered the types of problems encountered in the art, the
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`prior art solutions to those problems, the rapidity with which innovations were and
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`are made, the sophistication of the technology, and the educational level and
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`professional capabilities of workers in the field.
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`
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`8
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`MasterCard, Exh. 1008, p. 10
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`
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`VI. CLAIM CONSTRUCTION
`(20) In proceedings before the USPTO, I understand from counsel that claims
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`of a patent are to be given their broadest reasonable interpretation in view of the
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`specification from the perspective of one skilled in the art, and that this is a
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`different standard from that which is used in district court proceedings. I also
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`understand from counsel that claim terms are presumed to carry their plain and
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`ordinary meaning, and are to be read in light of the patent’s specification and file
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`history, but that if the named inventors define terms in certain ways or make
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`certain representations to the USPTO, that such definitions and representations
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`should be considered and may dictate, in circumstances where there is a clear
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`disavowal of claim scope, a claims term’s particular meaning. I have carefully
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`considered the ’988 patent, and its file history based upon my experience and
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`knowledge in the field, and believe the following terms should have the following
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`meanings from the perspective of one skilled in the art.
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`(21) The claim limitation “generating [a/said] transaction code” should be
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`construed, consistent with the patent’s specification and explicit teaching, to mean
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`“creating a code usable as a substitute for a credit card number in a purchase
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`transaction, the number pre-coded to be indicative of a specific credit card
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`
`
`9
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`MasterCard, Exh. 1008, p. 11
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`
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`account.” (See Exh. 1001, ’988 Patent at Abstract; C3:48-53; C6:24-48; C7:1-6).2
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`The named inventors made clear that the “transaction code” is “used in substitution
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`for the specific credit card number” and “is pre-coded to be indicative of a specific
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`credit card account.” (See Exh. 1001, ’988 Patent, C6:28-29, 33-34). No other
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`definitions are provided, and no other embodiments are taught or suggested. As a
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`result, one of ordinary skill in the art, reading the claims in view of the
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`specification, and giving this term its broadest reasonable meaning, would
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`understand the term “generating [a/said] transaction code” to mean as I note above.
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`(22) The claim limitation “defining at least one payment category” may be
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`construed, consistent with its plain and ordinary meaning, to mean “specifying the
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`type of limitation (or limitations) that are available to be applied to a transaction
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`code in order to limit its use.” This construction is supported by, and consistent
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`with the disclosure of the term in the ’988 Patent. (See Exh. 1001, ’988 Patent at
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`C3:5-8; C3:53-C4:7; C4:25-29; C7:7-13; C7:61-C8:48).
`
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`2 To the extent the Board does not accept this construction of “generating [a/said]
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`transaction code,” and the Board provides an alternative construction without the
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`clause “the number pre-coded to be indicative of a specific credit card account,”
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`(which I respectfully submit would be improper) then I provide additional grounds
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`in Sections VII below for invalidating the claims.
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`
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`10
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`MasterCard, Exh. 1008, p. 12
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`
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`(23) The claim limitation “particular merchant” may be construed, consistent
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`with its plain and ordinary meaning, to mean “a specific merchant with whom a
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`customer can engage in the purchase transaction.” This construction is supported
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`by, and consistent with the disclosure of the term in the ’988 Patent. (See Exh.
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`1001, ‘988 Patent at C4:5-7; C4:13-18; C4:49-54)
`
`(24) The claim limitation “verifying that said defined purchase parameters are
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`within said designated payment category” may be construed, consistent with its
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`plain and ordinary meaning, to mean “ascertaining that any limitation associated
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`with the designated payment category is satisfied.” This construction is supported
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`by, and consistent with the disclosure of the term in the ’988 Patent. (See Exh.
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`1001, ’988 Patent at C4:13-18; C7:13-29) This construction is also consistent with
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`the dictionary definition of the word “verify.” (See Exh. 1009, Random House
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`Webster at 2114)
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`(25) For purposes of this review, to the extent this term can be construed, I
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`understand and accept, for purposes of this Petition, the PTAB’s construction of
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`“one or more merchants” and “a number of transactions”. (See Exh. 1014, PTAB’s
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`3/7/14 CBM Decision for the ’988 Patent at 8-9)
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`(26) The claim limitation “prior to any particular merchant being identified”
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`may be construed, consistent with its plain and ordinary meaning, to mean “prior to
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`the identification of a particular merchant for the particular transaction(s) or
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`
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`11
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`MasterCard, Exh. 1008, p. 13
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`
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`purchase(s) in the payment category.” This construction is supported by, and
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`consistent with, not only the patent’s specification (see Exh. 1001, ’988 Patent at
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`C6:37-48, Fig. 1), but also the prosecution history. More specifically, in the file
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`history of U.S. Patent No. 7,840,486, to which the ’988 Patent claims priority as a
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`continuation (see Exh. 1013, ’486 Patent File History, 7/26/10 Office Action at
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`18-19), the applicants made clear that the claimed identification must be related to
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`the transactions and/or purchases in the payment category.3
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`3 In the prosecution of the ’486 Patent, D’Agostino argued that prior art U.S. Pat.
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`No. 5,500,513 (“Langhans”) teaches the use of MCC codes for creating a list of
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`approved vendors which is used to authorize a purchase if it is within an approved
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`MCC code. Exh. 1013, ’486 Patent File History, 7/26/10 Office Action at 18-19.
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`D’Agostino conceded that “[i]n order to be included on an approved vendor list, a
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`vendor must be identified.” Id. at 19 (emphasis added). D’Agostino, however,
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`then argued that identifying a merchant by the MCC code as disclosed in Langhans
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`did not teach the “prior to any particular merchant being identified as said single
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`merchant.” Id. This was a clear disavowal of subject matter, and makes clear
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`that simply pre-identifying a merchant by an MCC code is insufficient to satisfy
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`the element “prior to any particular merchant being identified” – and that the
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`claimed identification must be related to the transactions in the payment category.
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`12
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`MasterCard, Exh. 1008, p. 14
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`
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`VII. DISCUSSION OF RELEVANT PRIOR ART
`A. Legal Standards
`(27) In proceedings before the USPTO, I understand from counsel that the
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`claims of an unexpired patent are to be given their broadest reasonable
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`interpretation in view of the specification from the perspective of one skilled in the
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`field. It is my understanding that the ’988 patent has not expired. In comparing
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`the claims of the ’988 patent to the known prior art, I have carefully considered the
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`’988 patent, and the ’988 patent file history based upon my experience and
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`knowledge in the relevant field.
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`(28) I am informed that the ’988 patent is a continuation of U.S. Patent
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`Application No. 11/252,009, filed on October 17, 2005, which is a continuation of
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`U.S. Patent Application No. 10/037,007, filed on November 9, 2001, which is a
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`continuation-in-part of U.S. Patent Application No. 09/213,745, filed on January
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`15, 1999.
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`(29) It is my understanding from counsel that a claim may be invalid as
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`anticipated under 35 U.S.C. § 102 if each and every element of a claim, as properly
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`construed, is disclosed either explicitly or inherently in a single prior art reference,
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`subject to the limitations imposed by § 102 in paragraphs a-g. Under the principles
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`of inherency, if the prior art necessarily functions in accordance with, or includes
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`the claimed limitations, it anticipates. Persons of ordinary skill need not recognize
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`
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`13
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`MasterCard, Exh. 1008, p. 15
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`
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`the inherent characteristics or functioning of the prior art. In addition, a new
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`scientific explanation for the functioning of the prior art does not render the old
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`composition patentable. Such a reference, if it contained each and every element
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`of a claim, would anticipate the claim.
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`(30) Regarding the legal doctrine of obviousness, my understanding from
`
`counsel is as follows. A claim may be invalid even if each and every claim
`
`limitation is not present or disclosed in a single prior-art item. Under the doctrine
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`of obviousness, a claim may be invalid if the differences between the invention and
`
`the prior art are such that the subject matter as a whole would have been obvious at
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`the time the invention was made to a person having ordinary skill in the art to
`
`which the subject matter pertains. A person of ordinary skill in the art is presumed
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`to have knowledge of the relevant prior art at the time of the claimed invention.
`
`(31) It is also my understanding from counsel that obviousness is based on the
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`scope and content of the prior art, the differences between the prior art and the
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`claim at issue, the level of ordinary skill in the art and secondary indicia of
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`obviousness and non-obviousness to the extent such indicia exist. The scope of the
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`prior art comprises any prior art that was reasonably pertinent to the particular
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`problems the inventor faced.
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`(32) It is further my understanding from counsel that the determination of
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`whether the asserted claims would have been obvious to a person of ordinary skill
`
`
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`14
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`MasterCard, Exh. 1008, p. 16
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`
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`in the art and, therefore, invalid, is not governed by any rigid test or formula. A
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`determination that a claim is obvious is, instead, based on a common sense
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`determination that the claimed invention is merely a combination of known
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`limitations to achieve predictable results. Any of the following rationales are
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`acceptable justifications to conclude that a claim would have been obvious: the
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`claimed invention is simply a combination of known prior art methods to yield
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`predictable results; the claimed invention is a simple substitution of one known
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`element for another to obtain predictable results; the claimed invention uses known
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`techniques to improve similar devices (methods, or products) in the same way; the
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`claimed invention applies a known technique to a known device (method, or
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`product) ready for improvement to yield predictable results; the claimed invention
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`was “obvious to try”—choosing from a finite number of identified, predictable
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`solutions, with a reasonable expectation of success; there is known work in one
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`field of endeavor that may prompt variations of it for use in either the same field or
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`a different one based on design incentives or other market forces if the variations
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`would have been predictable to one of ordinary skill in the art; or there is some
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`teaching, suggestion, or motivation in the prior art that would have led one of
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`ordinary skill in the art to modify the prior art reference to combine prior art
`
`teachings to arrive at the claimed inventions.
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`(33) It is my understanding from counsel that, in addition, a claim can be
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`
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`15
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`MasterCard, Exh. 1008, p. 17
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`
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`obvious in light of a single reference, without the need to combine references, if
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`the elements of the claim that are not found in the reference can be supplied by the
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`common sense or knowledge of one of ordinary skill in the art.
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`(34) It is my understanding from counsel that an analysis of whether a claimed
`
`invention is obvious must not rely on a hindsight combination of prior art. The
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`analysis must proceed in the context of the time of the invention or claimed
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`priority date and consider whether the invention as a whole would have been
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`obvious to a person of ordinary skill in the art, taking into consideration any
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`interrelated teachings of the prior art, the effects of demands known to the design
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`community or present in the marketplace, and the background knowledge
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`possessed by a person having ordinary skill in the art, all in order to determine
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`whether there was an apparent reason to combine any known elements in the
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`fashion claimed by the patent at issue.
`
`B.
`(35)
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`
`
`Summary of My Opinions
`
`In view of the above, and as set forth in greater detail below, my
`
`opinion is that the ’988 patent is invalid on the following grounds:
`
` GROUND 1. Claims 1-10, 15-25, 27-33, & 35-38 are Unpatentable under 35
`
`USC § 102 as Anticipated by Cohen
`
` GROUND 2. Claims 11-14, 26, & 34 are Unpatentable under 35 USC § 103 as
`
`
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`16
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`MasterCard, Exh. 1008, p. 18
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`
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`Obvious over Cohen in view of Musmanno
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` GROUND 3. Claims 1-10, 15-25, 27-33, & 35-38 are Unpatentable under 35
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`USC § 102 as Anticipated by Flitcroft
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` GROUND 4. Claims 11-14, 26, & 3 are Unpatentable under 35 USC § 103 as
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`Obvious over Flitcroft in view of Musmanno
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` GROUND 5. To the extent the Board finds that Cohen does not anticipate
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`claims 1-10, 15-25, 27-33, & 35-38, these claims would be
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`obvious over Cohen alone, or together with the common sense
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`and knowledge of a person of ordinary skill in the art
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` GROUND 6. To the extent the Board finds that Flitcroft does not anticipate
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`claims 1-10, 15-25, 27-33, & 35-38, these claims would be
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`obvious over Flitcroft alone, or together with the common sense
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`and knowledge of a person of ordinary skill in the art
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`C. U.S. Patent No. 6,422,462 to Cohen
`(36) I have been asked to consider whether claims 1-10, 15-25, 27-33, & 35-
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`38 of the ’988 patent are invalid as anticipated under 35 U.S.C. § 102 by U.S.
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`Patent No. 6,422,462 to Cohen (Ex. 1004, “Cohen”). In my opinion, based on the
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`legal principles expressed above, and using the constructions I have proposed,
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`these claims are clearly anticipated by Cohen - and I set forth in detail how each
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`limitation is met by Cohen in the claim charts attached as Exhibit 1, and as set
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`
`
`17
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`MasterCard, Exh. 1008, p. 19
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`
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`forth in the accompanying Petition showing that each element of claims 1-10, 15-
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`25, 27-33, & 35-38 is invalid as anticipated by Cohen. I support and agree with the
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`claim charts set forth in the Petition.
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`(37) I have read and I understand Cohen. Cohen teaches a secure method for
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`engaging in credit card transactions, which limits the transactions to selected
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`vendors. (Cohen at C2:32-43). Cohen discloses a credit card holder contacting
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`their credit card company, verifying their identity, and then receiving a transaction
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`code number to be used for a limited number of transactions. (Cohen at C3:41-48).
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`The credit card holder can determine and customize the use of the transaction code
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`number. (Cohen at C3:49-52). After the credit card holder has received the
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`transaction code number, they can use the number with a merchant as a substitute
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`for a regular credit card number, and the merchant can validate the transaction code
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`number with the credit card company. (Cohen at C5:35-39). The credit card
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`company can validate the transaction code number, or deny the transaction if the
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`number is used for anything other than the pre-determined use indicated by the
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`credit card holder. (Cohen at C5:44-49).
`
`(38) Cohen discloses a “payment category... limiting...[a number of]
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`transactions to one or more merchants.” Cohen discloses a transaction code
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`number that is limited in use to transactions with one or more merchants: “А
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`customized credit card could be issued to the user which is only valid for use for
`
`
`
`18
`
`MasterCard, Exh. 1008, p. 20
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`
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`that particular type of charge (computer hardware or software stores)…The card
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`could even [be] customized for use in a particular store itself or a particular chain
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`of stores (such as a particular restaurant, or a particular chain of restaurants).”
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`(Cohen at C8:25-35). “The card could be valid only for purchase…in a certain
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`store, or group of stores or types of stores (e.g. clothing stores)” (Cohen at C8:43-
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`46). A limitation of the transaction code to a particular “group”, “type”, or “chain”
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`of stores is by definition a limitation to one or more merchants.
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`(39) Cohen discloses: “said one or more merchants limitation being included
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`in said payment category prior to any particular merchant being identified as one
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`of said one or more merchants”. Cohen discloses that the transaction code could
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`be limited to a particular “group”, “type”, or “chain” of stores: “The card could
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`even [be] customized for use in…a particular chain of stores (such as…a particular
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`chain of restaurants).” (Cohen at C8:25-35). “The card could be valid only for
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`purchase [to a] group of stores or types of stores (e.g. clothing stores)” (Cohen at
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`C8:43-46). The transaction code is therefore limited to a category of merchants.
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`This categorical limitation to the merchant occurs before the transaction code is
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`used – and in effect, before any particular merchant is identified. Therefore, the
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`transaction code as disclosed by Cohen is inherently limited to one or more
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`merchants by their “group”, “type”, or “chain” before any particular merchant is
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`identified.
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`
`
`19
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`MasterCard, Exh. 1008, p. 21
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`
`
`(40) Cohen discloses “a payment category that at least limits transactions to a
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`single merchant.” Cohen discloses a transaction code number that is limited in use
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`to a one-time transaction with one merchant: “The card could even [be] customized
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`for use in a particular store itself...” (Cohen at C8:25-34). “[I]n one
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`embodiment…[t]hese credit cards or credit card numbers are generated for a one
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`time, single transaction basis, after which they are disposed of, or thrown away.
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`The numbers can be used…to effect a single transaction.” (Cohen at C2:35-43). A
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`credit card number that is customized for a one-time use, to execute a single
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`transaction, is by definition limited to purchases with a single merchant.
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`Accordingly, the system disclosed in Cohen inherently includes the step to limit
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`the transaction code to one merchant.
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`(41) Cohen discloses: “said single merchant limitation being included in said
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`payment category prior to any particular merchant being identified as said single
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`merchant”. Cohen discloses that the transaction code could be limited to a single
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`transaction: “in one embodiment…[t]hese credit cards or credit card numbers are
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`generated for a one time, single transaction basis” and subsequently “[a]fter a one
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`time use of the credit card number, the number is deactivated.” (Cohen at C2:35-
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`43; C8:25-46; C12:3-4). A one-time use transaction code can only be used at one
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`merchant, therefore the transaction code is inherently limited to a one merchant.
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`This limitation to a single merchant occurs before the transaction code is used for
`
`
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`20
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`MasterCard, Exh. 1008, p. 22
`
`
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`purchase – and in effect, before the particular merchant is identified. Therefore,
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`the single-use transaction code as disclosed by Cohen is inherently limited to a
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`single merchant before any particular merchant is identified.
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`(42) Cohen discloses a “transaction code [reflecting/associated with]…the
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`limits of said payment category.” Cohen discloses that “[a] customized credit card
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`could be issued to the user which is only valid for use for that particular