United States Court of Appeals
`for the Federal Circuit
`______________________
`
`JOHN D’AGOSTINO,
`Appellant
`
`v.
`
`MASTERCARD INTERNATIONAL
`INCORPORATED,
`Appellee
`______________________
`
`2016-1592, 2016-1593
`______________________
`
`Appeals from the United States Patent and Trade-
`mark Office, Patent Trial and Appeal Board in Nos.
`IPR2014-00543, IPR2014-00544.
`______________________
`
`Decided: December 22, 2016
`______________________
`
`
`ROBERT GREENSPOON, Flachsbart & Greenspoon, LLC,
`Chicago, IL, argued for appellant. Also represented by
`JOSEPH CARL DRISH.
`
`ELIOT DAMON WILLIAMS, Baker Botts LLP, Palo Alto,
`CA, argued for appellee. Also represented by ROBERT C.
`SCHEINFELD, New York, NY.
`______________________
`
`Before TARANTO, LINN, and STOLL, Circuit Judges.
`
`

`

`
`2
`
` D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`TARANTO, Circuit Judge.
`This case involves method claims of two patents that
`disclose processes for generating limited-use transaction
`codes to be given to a merchant by a customer for the
`purchase of goods and services, an objective being to
`enhance security for the customer by withholding the
`customer’s credit card number from the merchant and
`using the transaction code to complete the transaction
`instead. In two inter partes review proceedings, the
`Patent Trial and Appeal Board of the United States
`Patent and Trademark Office decided that the disputed
`claims are unpatentable for anticipation and obviousness.
`Because the Board’s decisions rest on an unreasonable
`claim interpretation, we vacate the decisions and remand
`for further proceedings.
`
`I
`John D’Agostino owns U.S. Patent Nos. 7,840,486 and
`8,036,988. The ’988 patent is a continuation of the ’486
`patent. Both patents disclose methods of effecting secure
`credit-card purchases by minimizing merchant access to
`credit card numbers. ’988 patent, abstract; ’486 patent,
`abstract. The written descriptions of the two patents are
`materially identical.
`MasterCard International Incorporated filed two peti-
`tions with the PTO requesting inter partes review of the
`two patents under 35 U.S.C. ch. 31. Regarding the ’988
`patent, the Board, as delegee of the PTO Director, 37
`C.F.R. §§ 42.4, 42.108, instituted a review of claims 1–10,
`15–25, 27–33, and 35–38 for anticipation by U.S. Patent
`No. 6,422,462 to Cohen and of claims 11–14, 26, and 34
`for obviousness over Cohen and U.S. Patent No. 5,826,243
`to Musmanno (IPR2014-543). Regarding the ’486 patent,
`the Board instituted a review of claims 1–15 and 22–30
`for anticipation by Cohen and of claims 16–21 for obvi-
`ousness over Cohen and Musmanno (IPR2014-544). After
`conducting the reviews, the Board cancelled all of the
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`

`

`D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`3
`
`reviewed claims as unpatentable on the grounds on which
`it instituted review. MasterCard Int’l Inc. v. D’Agostino,
`2015 WL 5159950 (P.T.A.B. Aug. 31, 2015) (’988 Deci-
`sion); MasterCard Int’l Inc. v. D’Agostino, 2015 WL
`5159951 (P.T.A.B. Aug. 31, 2015) (’486 Decision). The
`Board’s two final written decisions are materially identi-
`cal for present purposes, so we hereafter cite only the ’988
`Decision.
`As relevant here, the claims fall into two categories—
`those which involve “limiting a number of transactions to
`one or more merchants,” i.e., a “one or more merchants
`limitation,” ’988 patent, col. 8, lines 66–67; and those
`which involve “limit[ing] transactions to a single mer-
`chant,” i.e., a “single merchant limitation,” id., col. 11,
`lines 12–13. It being undisputed that the former are
`unpatentable if the latter are unpatentable, the Board
`relied only on the “single merchant” claims in its deci-
`sions, holding them unpatentable and, solely on that
`ground, also holding the “one or more merchants” claims
`unpatentable. ’988 Decision at *8. We therefore address
`only the “single merchant” claims.
`Claim 21 is representative of the “single merchant”
`claims:
`21. A method for implementing a system for per-
`forming 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
`
`

`

`
`4
`
` D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`prior to any particular merchant being
`identified as said single merchant;
`c) generating a transaction code utilizing a
`processing computer of a custodial author-
`izing entity, said transaction code associ-
`ated 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 pay-
`ment for a purchase using said transac-
`tion code;
`f) authorizing payment for said purchase if
`said purchase is within said payment cat-
`egory.
`’988 patent, col. 11, lines 5–27.
`limitation,
`After construing the single-merchant
`which is step (b) in representative claim 21, the Board
`found that Cohen meets the single-merchant limitation
`through an embodiment that limits credit-card transac-
`tions to a particular chain of stores. ’988 Decision at *8.
`The Board also found that Cohen discloses the step of
`defining and designating the “payment category” before
`the transaction code is generated. Id. at *9–10. The
`Board’s unpatentability reasoning for both anticipation
`and obviousness relies critically on those two rulings; the
`Board did not rely on any independent alternative
`grounds for its decisions.
`Mr. D’Agostino appeals under 35 U.S.C. §§ 141(c) and
`319. We have jurisdiction to review the Board’s decisions
`under 28 U.S.C. § 1295(a)(4)(A).
`
`

`

`D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`5
`
`II
`The Board permissibly applied the broadest reasona-
`ble interpretation standard in this inter partes review
`proceeding. See Cuozzo Speed Techs., LLC v. Lee, 136 S.
`Ct. 2131, 2142 (2016); 37 C.F.R. § 42.100(b). “There being
`no dispute here about findings or evidence of facts extrin-
`sic to the patent, . . . we conduct a de novo review of the
`Board’s determination of the broadest reasonable inter-
`pretation of the claim language.” Straight Path IP Grp.,
`Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1360 (Fed. Cir.
`2015). “The protocol of giving claims their broadest
`reasonable
`interpretation . . . does not
`include giving
`claims a legally incorrect interpretation.” In re Skvorecz,
`580 F.3d 1262, 1267 (Fed. Cir. 2009). Instead, “claims
`should always be read in light of the specification and
`teachings in the underlying patent,” In re Suitco Surface,
`Inc., 603 F.3d 1255, 1260 (Fed. Cir. 2010); the Board
`“should also consult the patent’s prosecution history in
`proceedings in which the patent has been brought back to
`the agency for a second review,” Microsoft Corp. v. Proxy-
`conn, Inc., 789 F.3d 1292, 1298 (Fed. Cir. 2015).
`We note two limits on our review and ruling here.
`First, we separately address only the “single merchant”
`claims because the Board relied entirely on those claims
`for its decisions as to all claims. Second, as to Cohen, we
`consider only the portion, concerning a chain of stores, on
`which the Board relied. We reject the Board’s bases of
`decision and remand. The Board on remand may consider
`other issues, e.g., as to Cohen and as to the “one or more
`merchants” claims, that the parties have preserved.
`A
`The single-merchant limitation clearly requires a sep-
`aration in time between the communication of one piece of
`information and the communication of another. The
`authorizing entity, in being asked for a transaction code,
`is told that the number of merchants to be covered by that
`
`

`

`
`6
`
` D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`code is one (no more, no less): a “payment category that at
`least limits transactions to a single merchant” is commu-
`nicated to the authorizing entity. Critically, though, the
`“single merchant” must not be identified to the authoriz-
`ing entity at that time: “said single merchant limitation
`being included in said payment category prior to any
`particular merchant being identified as said single mer-
`chant.” Only later is the “particular merchant” identified,
`and the “particular merchant” is identified “as said single
`merchant.” Identification of a particular merchant may
`take place, for example, at the subsequent step (f), when
`the transaction with that merchant is authorized; but it
`does not take place at the earlier step, when the transac-
`tion code for a defined payment category is requested. At
`that earlier step, the account holder sets the number of
`authorized merchants at one without identifying the one.
`The specification refers to this process as one among
`several embodiments. “The payment category may also
`include a multi-transaction authorization wherein more
`than one purchase may be made from one or a plurality of
`different merchants, each of which may or may not be
`identified by the customer and pre-coded in association
`with the transaction code.” ’988 patent, col. 8, lines 18–22
`(emphases added).
`The prosecution history reinforces the evident mean-
`ing of the single-merchant limitation as requiring limit-
`ing, to one, the number of merchants that may use the
`transaction code, without identifying the merchant. In
`responding to a non-final rejection, Mr. D’Agostino distin-
`guished the Langhans prior art as involving a list of
`identified approved merchants, stating: “There is no
`disclosure in Langhans et al. that limits a transaction to a
`single merchant prior to any particular merchant being
`identified as the single merchant.” J.A. 1427 (emphasis in
`original); see also J.A. 1366 (“[C]omparing merchant
`information transmitted in an authorization request
`against vendor data stored in an approved vendor list and
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`

`

`D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`7
`
`determining if a particular vendor is on an approved
`vendor list does not teach a single merchant limitation
`being included in a payment category prior to any particu-
`lar merchant being identified as said single merchant.”)
`(emphases in original). And in a reexamination of the
`’988 patent, Mr. D’Agostino said the following in distin-
`guishing Cohen:
`[L]imiting to a particular store or chain of stores
`is not the same as limiting to a single merchant.
`A particular store or chain of stores limitation is
`an identity limitation whereas a single merchant
`limitation is a numerical limitation. That is, the
`only way a particular store or chain or stores limi-
`tation can be made is by identifying that store or
`chain of stores from other stores or chain of stores.
`Conversely, a single merchant limitation is not re-
`lated to the particular identity of any store or
`chain of stores, rather it is a numerical limitation
`that limits use to only one merchant. Stated dif-
`ferently, a particular store or chain of stores limi-
`tation is limited to only the identified store or
`chain of stores, whereas a single merchant limita-
`tion is not limited by way of identity.
`J.A. 2333–34. In the present appeal, this material is
`relevant as reinforcing the evident meaning of the claim
`language at issue, whether or not it would meet standards
`for disclaimer or disavowal. See Cordis Corp. v. Medtron-
`ic AVE, Inc., 339 F.3d 1352, 1359 (Fed. Cir. 2003).
`The single-merchant limitation thus requires, simply,
`that, when the transaction code is requested, the request
`limits the number of authorized merchants to one but
`does not then identify the merchant, such identification
`occurring only later. This is the claim-construction posi-
`tion that Mr. D’Agostino urged before the Board. See, e.g.,
`J.A. 5486, 5490, 8417. Contrary to MasterCard’s conten-
`tion, the doctrine of waiver does not preclude Mr.
`
`

`

`
`8
`
` D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`D’Agostino from making any of the arguments he has
`made to us—e.g., offering a new analogy, changing the
`emphasis on or ways of describing sources of support—in
`“defending the original scope of [his] claim construction.”
`Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d
`1323, 1346 (Fed. Cir. 2001).
`The Board departed from or misapplied the above-
`stated clear meaning when—whether as a matter of claim
`construction or as a matter of application to Cohen, see
`’988 Decision at *6, *8 (making point in both ways)—it
`concluded that the claim limitation covers a situation in
`which the customer first seeks a transaction code for an
`identified “chain of stores” and, later, picks a specific store
`within that chain. ’988 Decision at *8. The Board stated
`its point by way of an example it deemed within the
`claim: the customer could designate the “Target” chain of
`stores when obtaining a transaction code and only later
`choose a specific Target store at which to use such a code
`to obtain authorization of a purchase. Id.; id. at *9 (“[A]
`‘single merchant’ can be the chain of stores, whereas the
`‘particular merchant’ is a single store of that chain of
`stores.”). The Board read Cohen as disclosing such a
`scenario and thus teaching the claim limitation at issue
`(for anticipation and obviousness). Id. at *8–*9.
`The decisive problem with the Board’s conclusion is
`that this scenario necessarily falls outside the single-
`merchant limitation. If Target is more than one mer-
`chant, then telling the authorizing entity to limit transac-
`tions to Target is not limiting the number of merchants
`(whose transactions are to be authorized) to one—and the
`Target scenario is for that reason outside the initial
`clause of the claim limitation. If Target instead is one
`merchant, then telling the authorizing entity to limit
`transactions to Target is not withholding the identity of
`the particular merchant—and the Target scenario is for
`that reason outside the second clause of the claim limita-
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`

`D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`9
`
`tion. Either way, the chain store example fails to satisfy a
`claim requirement.
`The only way to avoid that straightforward logic
`would be to separate “single merchant” (in the first
`clause) from “particular merchant” (in the second clause).
`But, as we have discussed, the claim language of the
`single-merchant limitation does not allow that separation.
`Indeed, the second clause speaks expressly of “any partic-
`ular merchant being identified as said single merchant.”
`For that reason, the Board’s chain-store construction
`and/or finding for purposes of meeting the single-
`merchant claim limitation, for both anticipation and
`obviousness purposes, must be set aside. Because the
`decisive aspect of the Board’s reasoning is contrary to the
`claim as reasonably construed, we need not and do not
`discuss other statements made by the Board en route to
`its conclusion, some of which MasterCard declines to
`defend.1 In leaving those aspects of the Board’s decisions
`unaddressed, we are not implicitly approving them. Nor,
`as we have already noted, are we deciding whether as-
`pects of Cohen other than the chain-store discussion
`might satisfy the single-merchant claim limitation or
`whether the “one or more merchants” limitation might
`
`1 For example, although the Board seemed uncer-
`tain “how transactions are limited to a single merchant,
`without identifying any particular merchant,” ’988 Deci-
`sion at *6, MasterCard has recognized at least one way:
`the customer specifies, as the single merchant, the next
`merchant seeking authorization with the transaction
`code. See Oral Arg. at 27:30–29:00. MasterCard also has
`correctly declined to defend the Board’s apparent under-
`standing of Mr. D’Agostino’s remarks about scenarios
`involving Target and McDonald’s made in the imprecise
`back-and-forth discussion at oral argument before the
`Board. Id. at *8.
`
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`

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`10
`
` D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`call for a different analysis from that which governs the
`single-merchant limitation. In noting that these ques-
`tions are not being decided here, we do not suggest an-
`swers one way or another.
`
`B
`Mr. D’Agostino also challenges the Board’s decisions
`on a separate ground. The Board agreed that “the claims
`require designating/selecting a payment category before
`the generation of the transaction code,” and it found that
`Cohen meets that requirement. ’988 Decision at *9. Mr.
`D’Agostino argues that Cohen does not disclose defining
`and designating the payment category before the transac-
`tion code (in Cohen, the credit card number) is generated.
`We reject that argument.
`Substantial evidence supports the Board’s finding as
`to Cohen in this respect. It is clear that, in at least one
`embodiment, Cohen discloses the user providing “what
`the single use or the customized credit card number is to
`be used for” in the same telephone call in which the
`customized card is requested. Cohen, col. 3, lines 50–53.
`Cohen also discloses that “the limited use nature of the
`card (either in a general sense or the specific limita-
`tions) . . . may . . . be printed on the card.” Id., col. 3, lines
`22–26; see also id., col. 3, lines 63–66 (“With respect to the
`customized card, the cards can . . . be preset for certain
`uses . . . .”). Those passages support the finding that
`Cohen teaches, among other things, that the limitations
`have been defined and designated before the card is
`generated. Although Mr. D’Agostino argues that the
`printing of the physical credit card does not necessarily
`occur simultaneously with the generating of the credit
`card number, he provides no citations to the record to
`suggest that the card number is generated before the card
`is printed. The evidence before the Board thus permitted
`the Board’s finding on this issue. See In re Jolley, 308
`F.3d 1317, 1320 (Fed. Cir. 2002) (“If the evidence in
`
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`

`D’AGOSTINO v. MASTERCARD INTERNATIONAL
`
`11
`
`record will support several reasonable but contradictory
`conclusions, we will not find the Board’s decision unsup-
`ported by substantial evidence simply because the Board
`chose one conclusion over another plausible alternative.”).
`III
`For the foregoing reasons, we vacate the Board’s claim
`construction and its findings of anticipation and determi-
`nations of obviousness. We remand for further proceed-
`ings not inconsistent with this opinion.
`
`Costs awarded to Mr. D’Agostino.
`VACATED AND REMANDED
`
`