Trials@uspto.gov
`571–272–7822
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Paper 8
`
`
` Entered: September 4, 2014
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`MASTERCARD INTERNATIONAL INCORPORATED,
`Petitioner,
`
`v.
`
`JOHN D’AGOSTINO,
`Patent Owner.
`
`
`Case IPR2014–00543
`Patent 8,036,988
`
`
`
`Before SALLY C. MEDLEY, KARL D. EASTHOM, and
`KALYAN K. DESHPANDE, Administrative Patent Judges.
`
`DESHPANDE, Administrative Patent Judge.
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`
`I.
`INTRODUCTION
`MasterCard International Incorporated (“Petitioner”) filed a corrected
`Petition requesting an inter partes review of claims 1–38 of
`U.S. Patent No. 8,036,988 (Ex. 1001, “the ’988 patent”). Paper 1 (“Pet.”).
`John D’Agostino (“Patent Owner”) timely filed a Preliminary Response. Paper 7
`(“Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 314, which provides
`that an inter partes review may not be instituted “unless . . . there is a reasonable
`likelihood that petitioner would prevail with respect to at least 1 of the claims
`challenged in the petition.” 35 U.S.C. § 314.
`Upon consideration of the Petition and the Preliminary Response, we
`determine that Petitioner has established that there is a reasonable likelihood that
`Petitioner would prevail in showing the unpatentability of claims 1–38 of the ’988
`patent. Accordingly, we institute an inter partes review of these claims.
`A. Related Proceedings
`Petitioner identifies the following related district court proceeding involving
`the ’988 Patent and in which Petitioner is a party: D’Agostino v. MasterCard, Inc.,
`Case No. 1:13–cv–00738 (D. Del. filed Apr. 26, 2013). Pet. 59.
`Petitioner also identifies the ’988 patent as the subject of Ex Parte
`Reexamination proceeding No. 90/012,517. Pet. 1, 59.
`In related proceeding IPR2014–00544, Petitioner seeks review of U.S.
`Patent No. 7,840,486 B2, to which the ’988 patent claims priority. Pet. 59.
`Petitioner previously sought a covered business method patent review of the ’988
`patent in proceeding CBM2013–00057, but we denied institution of review. Id. at
`11–13; Mastercard Int’l Inc. v. D’Agostino, case CBM2013–00057 (PTAB Mar. 7,
`2014)(Paper 9). Specifically, we had denied institution of review because
`Petitioner had not demonstrated that Cohen or Flitcroft qualifies as prior art under
`
`
`
`2
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`Section 18(a)(1)(C) of the AIA, because neither Cohen nor Flitcroft was published
`prior to the effective filing date of the ’988 patent. Mastercard Int’l Inc. v.
`D’Agostino, case CBM2013–00057, slip op. at 13-14 (PTAB Mar. 7, 2014).
`B. The ’988 Patent
`The ’988 patent discloses a method and system of performing secure credit
`card purchases. Ex. 1001, Abstract. The method and system increase overall
`security by minimizing access to credit card numbers, without having to
`substantially deviate from existing credit card transaction practices. Id. at 1:19–29.
`Figure 3 of the ’988 patent is reproduced below:
`
`
`Figure 3, depicted above, schematically represents a secure credit card
`transaction system, where the customer–to–merchant contact is by phone or in
`person. As shown above in Figure 3, customer 54 receives promotional
`information from merchant 56, either by telephone 60 or in person 62. Ex. 1001,
`7:30–35. Customer 54 then contacts custodial authorizing entity 64, by either
`telephone 66’ or computer 45’, for authorization. Id. at 7:35–43. After confirming
`
`
`
`3
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`authorization, authorizing entity 64 establishes details of the anticipated transaction
`to determine a payment category, and then issues a transaction code to the
`customer. Id. at 7:43–46. The customer can utilize the transaction code to
`consummate a transaction within the defined parameters of the payment category,
`and the merchant can obtain verification and subsequent payment utilizing the
`transaction code only. Id. at 7:46–55.
`C. Illustrative Claims
`Petitioner challenges claims 1–38 of the ’988 patent. Pet. 13–59. Claims 1
`and 21 are illustrative of the claims at issue and are reproduced below:
`1.
`A method of performing secure credit card purchases, said
`method comprising:
`a) contacting a custodial authorizing entity having custodial
`responsibility of account parameters of a customer’s account that is
`used to make credit card purchases;
`b) supplying said custodial authorizing entity with at least
`account identification data of said customer’s account;
`c) defining at least one payment category to include at least
`limiting a number of transactions to one or more merchants, said one
`or more merchants limitation being included in said payment category
`prior to any particular merchant being identified as one of said one or
`more merchants;
`d) designating said payment category;
`e) generating a transaction code by a processing computer of
`said custodial authorizing entity, said transaction code reflecting at
`least the limits of said designated payment category to make a
`purchase within said designated payment category;
`f) communicating said transaction code to a merchant to
`consummate a purchase with defined purchase parameters;
`g) verifying that said defined purchase parameters are within
`said designated payment category; and
`h) providing authorization for said purchase so as to confirm at
`least that said defined purchase parameters are within said designated
`payment category and to authorize payment required to complete the
`purchase.
`
`
`
`4
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`
`
`21. A method for implementing a system for performing secure
`credit card purchases, the method comprising:
`a) receiving account information from an account holder
`identifying an account that is used to make credit card purchases;
`b) receiving a request from said account holder for a transaction
`code to make a purchase within a payment category that at least limits
`transactions to a single merchant, said single merchant limitation
`being included in said payment category prior to any particular
`merchant being identified as said single merchant;
`c) generating a transaction code utilizing a processing computer
`of a custodial authorizing entity, said transaction code associated with
`said account and reflecting at least the limits of said payment
`category, to make a purchase within said payment category;
`d) communicating said transaction code to said account holder;
`e) receiving a request to authorize payment for a purchase using
`said transaction code;
`f) authorizing payment for said purchase if said purchase is
`within said payment category.
`
`D. The Alleged Grounds of Unpatentability
`The information presented in the Petition sets forth proposed grounds of
`unpatentability of claims 1–38 of the ’988 patent under 35 U.S.C. §§ 102, 103 as
`follows (see Pet. 13–59):
`
`Reference(s)
`
`Basis
`
`Challenged Claims
`
`Cohen1
`Cohen and
`Musmanno2
`Flitcroft3
`
`§ 102(e)
`
`§ 103
`
`§ 102(e)
`
`1–10, 15–25, 27–33,
`and 35–38
`11–14, 26, and 34
`1–10, 15–25, 27–33,
`and 35–38
`
`
`1 U.S. Patent No. 6,422,462 B1 (Ex. 1004) (“Cohen”).
`2 U.S. Patent No. 5,826,243 (Ex. 1006) (“Musmanno”).
`3 U.S. Patent No. 6,636,833 B1 (Ex. 1005) (“Flitcroft”).
`5
`
`
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`
`Reference(s)
`
`Basis
`
`Challenged Claims
`
`Flitcroft and
`Musmanno
`
`§ 103
`
`11–14, 26, and 34
`
`Cohen
`
`Flitcroft
`
`§ 103
`
`§ 103
`
`1–10, 15–25, 27–33,
`and 35–38
`1–10, 15–25, 27–33,
`and 35–38
`II. ANALYSIS
`A. Claim Construction
`In an inter partes review, claim terms in an unexpired patent are interpreted
`according to their broadest reasonable construction in light of the specification of
`the patent in which they appear. 37 C.F.R. § 42.100(b); Office Patent Trial
`Practice Guide, 77 Fed. Reg. 48,756, 48,764–66 (Aug. 14, 2012). Claim terms 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). A claim term will not be given
`its ordinary and customary meaning, however, when an inventor acts as his or her
`own lexicographer, defining the term in the specification with reasonable clarity,
`deliberateness, and precision. Renishaw PLC v. Marposs Societa’ per Azioni, 158
`F.3d 1243, 1249 (Fed. Cir. 1998).
`1.
`“generating a transaction code”
`Independent claims 1, 17, 19, 21, and 22 recite “generating a transaction
`code.” Petitioner proposes this limitation means “creating a code usable as a
`substitute for a credit card number in a purchase transaction, the number pre–coded
`to be indicative of a specific credit card account.” Pet. 13 (citation omitted).
`Patent Owner proposes the limitation means “producing a code that is usable in
`substitution for a credit card number in a purchase transaction, the code being
`
`
`
`6
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`indicative of a customer account and a payment category.” Prelim. Resp. 4–5.
`The ’988 patent specification discloses that “the transaction code is pre–coded to
`be indicative of a specific credit card account.” Ex. 1001, 6:32–37. The ’988
`patent, however, does not define specifically “generating a transaction code” to be
`indicative of a payment category, as argued by Patent Owner; rather, the
`specification explicitly states that a designated payment category is preferable. See
`Prelim. Resp. 4–5; Ex. 1001, 6:29–30. Accordingly, we construe “generating a
`transaction code,” under the broadest reasonable construction, to mean “creating
`[or producing] a code [that is] usable as a substitute for a credit card number in a
`purchase transaction, the [transaction code is] pre–coded to be indicative of a
`specific credit card account,” as argued by both Petitioner and Patent Owner. Pet.
`13 (citation omitted).
`2.
`“defining at least one payment category”
`Independent claim 1 recites “defining at least one payment category.”
`Claim 1 further recites the payment category includes “limiting a number of
`transactions to one or more merchants” and “said one or more merchants limitation
`being included in said payment category prior to any particular merchant being
`identified as one of said one or more merchants.” Independent claims 17, 19, 21,
`and 22 recite similar limitations. Petitioner argues that “defining at least one
`payment category” means “‘specifying the type of limitation (or limitations) that
`are available to be applied to a transaction code in order to limit its use.’” Pet. 13–
`14 (citation omitted). Patent Owner does not propose a definition for this
`limitation.
`Although the ’988 patent provides several examples of types of payment
`categories, the ’988 patent does not define specifically “defining at least one
`payment category.” For example, the ’988 patent describes that payment
`
`
`
`7
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`categories include “a single transaction involving a specific dollar amount for a
`purchase within a specific time period” or “a single transaction . . . [with] a
`maximum limit or a dollar amount.” Ex. 1001, 3:56–61. Accordingly, under the
`broadest reasonable interpretation, we agree with Petitioner that this limitation
`means “specifying the type of limitation (or limitations) that are available to be
`applied to a transaction code in order to limit its use.” Pet. 13–14 (citation
`omitted).
`
`3.
`“one or more merchants” and “a number of transactions”
`Independent claim 1 recites “one or more merchants” and “a number of
`transactions.” Independent claims 17, 19, 21, and 22 recite similar limitations. In
`CBM2013–00057, we previously construed these limitations of the ’988 patent to
`mean “one or more transactions, where the number of transactions is limited to a
`finite number” and “one merchant up to a plurality of merchants, where the
`number of merchants is a finite number,” respectively. Mastercard Int’l Inc. v.
`D’Agostino, Case CBM2013-00057, slip op. at 8–9 (PTAB March 7, 2014).
`Petitioner and Patent Owner accept these constructions, and we maintain these
`constructions for this case. Pet. 14; Prelim. Resp. 6–7.
`4. “one or more merchants limitation being included in said payment category
`prior to any particular merchant being identified as one of said one or more
`merchants” and “single merchant limitation being included in said payment
`category prior to any particular merchant being identified as a single merchant”
`Independent claims 1, 17, 19, and 22 recite “one or more merchants
`limitation being included in said payment category prior to any particular merchant
`being identified as one of said one or more merchants.” Independent claim 21
`similarly recites “single merchant limitation being included in said payment
`category prior to any particular merchant being identified as a single merchant.”
`Petitioner proposes “prior to any particular merchant being identified,” as recited
`
`
`
`8
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`in each of these limitations, means “‘prior to the identification of a particular
`merchant for the particular transaction(s) or purchase(s) in said payment
`category.’” Pet. 14. Patent Owner argues that “said one or more merchants
`limitation being included in said payment category prior to any particular merchant
`being identified as one of said one or more merchants” and “single merchant
`limitation being included in said payment category prior to any particular merchant
`being identified as a single merchant” mean “including a limit in a payment
`category that limits transactions to one or more merchants before any particular
`merchant is identified as the one or more merchants.” Prelim. Resp. 5–6.
`The ’988 patent describes that a merchant or merchants can be identified
`prior to the generation of the transaction code, such that the transaction code is
`pre–coded with the merchant’s or merchants’ identification. Ex. 1001, 6:31–37.
`Subsequently, a customer can disclose the transaction code to a merchant or
`merchants. Id. at 6:63–67. We interpret the merchant to whom the customer
`discloses the transaction code as the recited “particular merchant.” In other words,
`the merchant with whom the customer is transacting is the particular merchant.
`We further interpret, under the broadest reasonable interpretation, the “one or more
`merchants limitation” and the “single merchant limitation” to mean any group,
`category, or type of merchant, where the “particular merchant” is a subset of the
`“one or more merchants limitation” or the “single merchant limitation.” As such,
`the limitation “one or more merchants limitation being included in said payment
`category prior to any particular merchant being identified as one of said one or
`more merchants” and “single merchant limitation being included in said payment
`category prior to any particular merchant being identified as a single merchant”
`means any group, category, or type of merchant is included in the payment
`category prior to the customer selecting a particular merchant for a transaction.
`
`
`
`9
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`These two limitations, however, are distinguished from each other because the
`“one or more merchants” allows for one or multiple merchants as any group,
`category, or type of merchant, whereas “single merchant” allows for only one
`merchant. Prelim. Resp. 5–6.
`B. Claims 1–10, 15–25, 27–33, and 35–38 – Anticipation by Cohen
`Petitioner contends that claims 1–10, 15–25, 27–33, and 35–38 are
`unpatentable under 35 U.S.C. § 102(e) as anticipated by Cohen. Pet. 15–31.
`1. Cohen (Ex. 1004)
`Cohen describes a system of disposable credit card numbers, where the
`credit card numbers are generated for a one–time, single transaction basis, after
`which they are disposed of, or thrown away. Ex. 1004, 2:34–37. In general, a user
`dials into her credit card company and provides the ordinary credit card number
`and verification data, and may further indicate the transaction for which the
`customized credit card number will be used. Id. at 3:41–53. The user then is
`provided with a disposable or customized credit card number for a single or limited
`range use. Id.
`For example, an employee’s credit card may be authorized to purchase a
`computer system, thereby transforming the credit card to a customized credit card
`that is valid for only that particular type of purchase. Id. at 8:24–35. The card also
`can be customized for use in a particular store or a particular chain of stores. Id.
`2. Analysis
`The evidence set forth by Petitioner indicates there is a reasonable likelihood
`that Petitioner would prevail in showing that claims 1–10, 15–25, 27–33, and 35–
`38 are unpatentable under 35 U.S.C. § 102(e) as anticipated by Cohen. Pet. 15–32.
`For example, independent claim 1 recites a “method of performing secure credit
`card purchases.” Petitioner argues that Cohen discloses “provid[ing] improved
`
`
`
`10
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`credit cards and methods for credit card transactions . . . provid[ing] methods and
`apparatus for secure transmission of credit card information.” Pet. 16 (quoting Ex.
`1004, 1:48–62). Claim 1 further recites the following:
`a) contacting a custodial authorizing entity having custodial
`responsibility of account parameters of a customer’s account that is
`used to make credit card purchases;
`b) supplying said custodial authorizing entity with at least account
`identification data of said customer’s account; . . .
`d) designating said payment category;
`e) generating a transaction code by a processing computer of said
`custodial authorizing entity, said transaction code reflecting at least
`the limits of said designated payment category to make a purchase
`within said designated payment category.
`Petitioner argues that Cohen describes that after an account holder contacts her
`credit card company that verifies her identity, the account holder is provided with a
`transaction code number to be used for a single or limited range of transactions,
`where the transactions can be indicated in advance of receiving the transaction
`code number. Pet. 16–18 (citing Ex. 1004, 2:35–43, 3:28–52, 8:25–46). Claim 1
`further recites:
`c) defining at least one payment category to include at least limiting a
`number of transactions to one or more merchants, said one or more
`merchants limitation being included in said payment category prior to
`any particular merchant being identified as one of said one or more
`merchants.
`Petitioner argues that Cohen discloses that “[t]he card can also be
`customized for particular uses or groups of uses” and further discloses that
`the card can be valid for a particular type of charge, such as computer
`hardware or software stores, or a particular store or a particular chain of
`stores. Pet.17 (citing Ex. 1004, 7:66–67, 8:25–46). Petitioner specifically
`argues that Cohen discloses that the card can be valid for only a particular
`chain of restaurants or a type of store, such as a clothing store. Id. Based on
`11
`
`
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`our construction of this limitation above, we are persuaded Petitioner has
`made a sufficient showing that Cohen describes this limitation. Claim 1 also
`recites:
`f) communicating said transaction code to a merchant to consummate
`a purchase with defined purchase parameters;
`g) verifying that said defined purchase parameters are within said
`designated payment category; and
`h) providing authorization for said purchase so as to confirm at least
`that said defined purchase parameters are within said designated
`payment category and to authorize payment required to complete the
`purchase.
`Petitioner argues Cohen discloses that a user communicates the disposable credit
`card number to a vendor, and the vendor verifies the transaction and obtains an
`authorization code from the credit card company authorizing the purchase. Id. at
`18–19 (citing Ex. 1004, 5:36–49). We are persuaded by Petitioner’s arguments.
`
`Patent Owner argues that the Petition impermissibly combines separate,
`distinct embodiments of Cohen to satisfy independent claim 21. Prelim. Resp. 19–
`22. Patent Owner specifically argues that these separate and distinct embodiments
`of Cohen are delineated by the phrases “[i]n one embodiment” and “[i]n
`accordance with the present invention, in one embodiment of the present
`invention.” Id. at 21. Patent Owner further argues that
`Mastercard relies on several custom-use credit card embodiments of
`Cohen to teach that a transaction code can be customized for certain
`uses. And then relies on separate single-use credit card of Cohen to
`allegedly show that a single-use credit card inherently teaches limiting
`a transaction code to a single merchant without first identifying the
`single merchant.
`
`Id.
`
`We are not persuaded by this argument. As discussed in the Petition,
`Cohen discloses a single-use credit card and Cohen further discloses that the
`
`
`
`12
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`credit card can be customized with other limits, including limiting use to a
`certain store or single merchant. Pet. 27 (citing Ex. 1004, 8:42–46). The
`Petition relies on Cohen’s disclosure of a “certain store” to describe a
`“single merchant.” See id. As such, Patent Owner’s argument does not
`rebut Petitioner’s challenge of unpatentability of claim 21. Furthermore,
`Patent Owner fails to specifically identify the “multiple distinct
`embodiments” relied upon by the Petition. Patent Owner only sets forth the
`conclusory argument that Cohen discloses “[i]n one embodiment” and “[i]n
`accordance with the present invention, in one embodiment of the present
`invention” without specifically identifying the distinct features of each
`embodiment and the Petition’s impermissible reliance on the combination of
`these embodiments. Accordingly, we are not persuaded by Patent Owner’s
`argument.
`
`In addition, Patent Owner argues that Cohen fails to disclose limiting
`“transactions to a single merchant, said single merchant limitation being included
`in said payment category prior to any particular merchant being identified as a
`single merchant,” as recited in claim 21. Prelim. Resp. 22–23 (citation and
`emphasis omitted). Patent Owner specifically argues that Cohen’s single-use
`credit card cannot be used for transactions with a single merchant because it is
`deactivated after its first use, and, therefore, is not being used for a plurality of
`transactions. Id.
`As discussed above in construing the claims, we construe the disputed
`limitation to mean any group, category, or type of merchant is included in the
`payment category prior to the customer selecting a particular merchant for a
`transaction. Cohen discloses that a card can be valid only at a certain store, groups
`of stores, or types of stores. Pet. 16–17; Ex. 1004, 8:42–46. Cohen discloses that
`
`
`
`13
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`the card can be valid for purchase on a particular day or for up to a designated
`purchase limit. Ex. 1004, 8:42–46. Although Cohen discloses a single-use credit
`card, Cohen further discloses a card that can be used at a certain store for a set
`amount or for a set time period. Accordingly, we are not persuaded by Patent
`Owner’s argument.
`
`Further, Patent Owner argues that Cohen fails to disclose
`“designating/selecting a payment category that places limitations on a transaction
`code before the transaction code is generated,” as recited in claims 1 and 17 and as
`similarly recited in independent claims 19, 21, and 22. Prelim. Resp. 23–26.
`Patent Owner specifically argues that Cohen describes customizing the use of a
`card after the number is generated, and, therefore, fails to disclose including
`limitations on the use of the transaction code before the step of generating the
`transaction code. Prelim. Resp. 25–26. We are not persuaded by this argument.
`Cohen discloses that “a user dials into her credit card company before making a
`transaction, and . . . is provided with a disposable or customized number.” Ex.
`1004, 3:42–49. Cohen further discloses that “a user can indicate in advance of
`purchase, on the telephone call with the credit card company, what the single use
`or the customized credit card number is to be used for.” Id. at 3:50–53.
`Accordingly, on this record, we are persuaded by Petitioner’s assertion that Cohen
`discloses “designating/selecting a payment category that places limitations on a
`transaction code before the transaction code is generated.”
`
`Patent Owner argues that Cohen fails to disclose “limiting use to one or
`more merchants before any particular merchant is identified as the one or more
`merchant,” as recited in claim 21. Prelim. Resp. 26–28. Patent Owner specifically
`argues that Petitioner relies on Cohen’s disclosure of a “type of charge, e.g.,
`customizing use of a credit card so that it can only be used for clothing [] or
`
`
`
`14
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`computer hardware or software stores” or limiting use to a particular chain of
`stores to describe “limiting use to one or more merchants,” where one or more
`merchants means “‘one merchant up to a plurality of merchants, where the number
`of merchants are a finite number.’” Prelim. Resp. 26–27 (quoting Pet. 17;
`Mastercard Int’l Inc. v. D’Agostino, Case CBM2013-00057, slip op. at 9 (PTAB
`March 7, 2014)). Patent Owner further argues that “[a]dmittedly limiting use to a
`particular chain of stores could be a limit to one or more merchants . . . .
`[; however,] limiting use to a particular chain certainly requires identification of a
`particular chain before the limit can be made.” Prelim. Resp. 27–28. We are not
`persuaded by this argument. As argued by Petitioner, and admitted by Patent
`Owner, Cohen discloses the card can be customized for use in a particular store or
`in a chain of stores, such as a particular restaurant or a particular chain of
`restaurants. Pet. at 17 (citing Ex. 1004, 7:66–67, 8:25–46); Prelim. Resp. 27–28.
`Although customizing the card such that it is used at a type of store or a chain of
`stores requires identification of the type or chain of stores, it does not require
`identification of the particular store. Rather, it designates one or more merchants
`for which the card can be used, and the user subsequently identifies a particular
`merchant. Accordingly, we are not persuaded by Patent Owner’s argument.
`C. Claims 11–16, 24, and 34 – Obviousness over Cohen and Musmanno
`Petitioner contends that claims 11–16, 24, and 34 are unpatentable under
`35 U.S.C. § 103 as obvious over Cohen and Musmanno. Pet. 32–36.
`1. Musmanno (Ex. 1006)
`Musmanno discloses a data processing method and apparatus for directing
`an account management system that incorporates master accounts with a plurality
`of nested subaccounts having a specific subset of individual properties. Ex. 1006,
`1:5–10. Each subaccount is directed to a specific goal, such as monthly household
`
`
`
`15
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`expenses, long–term investment strategies, and other financial goals. Id. at 3:5–9.
`Funds are deposited into the master account or into a specific subaccount. Id. at
`5:40–43. Upon request, the system will transfer funds from a specific account to a
`destination account. Id. at 5:47–49. Funds can be transferred on a periodic basis.
`Id. at 5:27–32. For example, as illustrated in Figure 3, funds can be transferred
`from Master Account 20 to Mortgage Subaccount 310, Car Subaccount 320, and
`Tuition Subaccount 330 every fourteen days and an automatic transfer of funds to
`Master Account 20 from Mortgage Subaccount 310 and Car Subaccount 320 on
`the twenty-eighth day of each month. Id. at 5:53–59.
`2. Analysis
`The evidence set forth by Petitioner indicates there is a reasonable likelihood
`that Petitioner would prevail in showing that claims 11–16, 24, and 34 are
`unpatentable under 35 U.S.C. § 103 as obvious over Cohen and Musmanno. Pet.
`32–36. For example, claim 11 recites the method of claim 1 and further recites:
`defining at least one payment category to include using said
`transaction code for at least two purchases for a repeating transaction
`at a fixed amount payable at each of a fixed number of time intervals.
`Petitioner argues that Cohen discloses claim 1, as discussed above, and
`further discloses that Cohen’s transaction code can be used repeatedly for a range
`of dates or a series of dates. Pet. 34 (citing Ex. 1004, 7:44–62). Petitioner further
`argues that Musmanno discloses that a predetermined amount from a master
`account is transferred to at least two subaccounts at a fixed time interval. Id.
`(citing Ex. 1006, 5:53–59). Petitioner also argues that applying the repeating
`transaction steps of Musmanno to the transaction code generation steps of Cohen
`would not change the respective functions of each step and such a combination
`would have yielded the predictable result of the ability to use Cohen’s transaction
`code for repeating transactions for a fixed amount at fixed intervals. Id. at 33–34
`
`
`
`16
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`(citing Ex. 1008 ¶ 69). Based on these arguments and the supporting evidence, we
`are persuaded that there is a reasonable likelihood Petitioner would prevail in
`demonstrating that claim 11 would have been obvious over Cohen and Musmanno.
`We are similarly persuaded that there is a reasonable likelihood Petitioner would
`prevail in demonstrating that claims 12–14, 26, and 34 would have been obvious
`over Cohen and Musmanno. Id. at 32-36.
`Patent Owner argues that the Petition does not identify the difference
`between the cited prior art and claims, and further does not articulate a rationale for
`why a person of ordinary skill in the art would have modified Cohen and
`Musmanno to meet the claims. Prelim. Resp. 28–32. Patent Owner specifically
`argues that Petitioner’s rationale only indicates that Cohen and Musmanno are
`analogous art and such a rationale is insufficient for a showing of obviousness.
`Prelim. Resp. 30. We are not persuaded by this argument. Petitioner argues that
`[b]oth references address methods for facilitating financial
`transactions. Cohen’s method for employing a transaction code that is
`limited in use to transactions at selected vendors is a specific example
`of facilitating secure financial transactions. Cohen at 2:32-43.
`Musmanno similarly addresses a system for managing financial
`business transactions and fund transfers between various accounts.
`Musmanno at 1:5-10. More specifically, Musmanno discloses the use
`of repeating transactions, paid over a fixed number of payment
`intervals, between accounts. Id. at 5:26-31. Applying the repeating
`transaction techniques of Musmanno to the transaction code methods
`of Cohen with no change in their respective functions would have
`yielded predicable results: the use of a transaction code for repeating
`transactions. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416
`(2007) (“The combination of familiar elements according to known
`methods is likely to be obvious when it does no more than yield
`predictable results.”). Thus, these references in their similar purpose
`of dealing with financial transactions and services, and overlapping
`teachings, confirm a motivation to combine Cohen and Musmanno
`
`
`
`17
`
`

`

`Case IPR2014–00543
`Patent No. 8,036,988
`
`
`and, as demonstrated below, should render these claims invalid. See
`Exh. 1008, Grimes Dec. at ¶ 69.
`Pet. 33–34. Petitioner argues that Musmanno discloses the repeating transactions
`technique that Cohen does not disclose. Id. Petitioner further contends that the
`combination of Musmanno’s repeating transactions technique to Cohen’s
`transaction codes, without any change to their respective functions, would yield
`predictable results. Id. Therefore, Petitioner has set forth a sufficient rationale to
`modify Cohen and Musmanno and has not presented only arguments illustrating
`that Cohen and Musmanno are analogous.
`D. Claims 1–10, 15–25, 27–33, and 35–38 – Obviousness over Cohen or
`Flitcroft
`Petitioner also contends that claims 1–10, 15–25, 27–33, and 35–38 are
`unpat