Case: 16-1592 Document: 13 Page: 1 Filed: 04/15/2016
`
`
`
`
`Nos. 2016-1592, -1593
`In the
`United States Court of Appeals
`for the Federal Circuit
`
`
`
`JOHN D’AGOSTINO,
`
`v.
`MASTERCARD INTERNATIONAL INCORPORATED,
`
`
`
`_______________________________________
`Appeal from the United States Patent and Trademark Office,
`Patent Trial and Appeal Board in Nos. IPR2014-00543 and IPR2014-00544.
`
`Appellant,
`
`Appellee.
`
`BRIEF OF APPELLANT
`JOHN D’AGOSTINO
`
`
`
`ROBERT P. GREENSPOON
`JOSEPH CARL DRISH
`FLACHSBART & GREENSPOON, LLC
`333 North Michigan Avenue
`27th Floor
`Chicago, Illinois 60601
`(312) 551-9500
`
`Attorneys for Appellant
`John D’Agostino
`
`
`
`
`COUNSEL PRESS ∙ (866) 703-9373
`
`
`
`
`
`
`PRINTED ON RECYCLED PAPER
`
`
`
`
`
`
`
`
`
`Patent Owner, Ex. 2011, p.1
`
`

`

`
`
`Case: 16-1592 Document: 5 Page: 1 Filed: 02/19/2016Case: 16-1592 Document: 13 Page: 2 Filed: 04/15/2016
`
`FORM 9. Certificate of Interest
`
`Form 9
`
`UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
`
`John D'Agostino
`
`v. Mastercard International Inc.
`
`Case No.
`
`16-1592,-1593
`
`CERTIFICATE OF INTEREST
`
`Counsel for the (petitioner) (appellant) (respondent) (appellee) (amicus) (name of party)
`certifies the following (use "None" if applicable; use extra sheets
`
`appellant, John D'Agostino,
`if necessary):
`
`1.
`
`The full name of every party or amicus represented by me is:
`
`John D'Agostino
`
`The name of the real party in interest (Please only include any real party in interest
`2.
`NOT identified in Question 3. below) represented by me is:
`
`John D'Agostino
`
`All parent corporations and any publicly held companies that own 10 percent of the
`3.
`stock of the party or amicus curiae represented by me are listed below. (Please list each party
`or amicus curiae represented with the parent or publicly held company that owns 10 percent
`or more so they are distinguished separately.)
`
`NIA
`
`4.
`
`[gJ The names of all law firms and the partners or associates that appeared for the party
`or amicus now represented by me in the trial court or agency or are expected to appear
`in this court (and who have not or will not enter an appearance in this case) are:
`
`see attached sheet
`
`February 19, 2016
`Date
`
`Is/ Robert P. Greenspoon
`Signature of counsel
`
`Please Note: All questions must be answered
`
`cc:
`
`Robert P . Greenspoon
`Printed name of counsel
`
`Reset Fields
`
`Patent Owner, Ex. 2011, p.2
`
`

`

`
`
`Case: 16-1592 Document: 5 Page: 2 Filed: 02/19/2016Case: 16-1592 Document: 13 Page: 3 Filed: 04/15/2016
`
`4.
`
`The names of all law firms and the partners or associates that appeared for
`the party or amicus now represented by me in the trial court or agency or
`are expected to appear in this court (and who have not or will not enter an
`appearance in this case):
`
`Flachsbart & Greenspoon, LLC:
`Robert P. Greenspoon
`Joseph C. Drish
`
`Maxey Law Offices, PLLC:
`Stephen Lewellyn
`
`Patent Owner, Ex. 2011, p.3
`
`

`

`Case: 16-1592 Document: 13 Page: 4 Filed: 04/15/2016
`
`
`
`2. 
`
`3. 
`
`4. 
`
`TABLE OF CONTENTS
` Page
`CERTIFICATE OF INTEREST .............................................................................. i
`TABLE OF AUTHORITIES .................................................................................. v
`
`INTRODUCTORY STATEMENT ........................................................................ 1 
`I. 
`STATEMENT OF RELATED CASES ........................................................ 2 
`II. 
`JURISDICTIONAL STATEMENT ............................................................. 2
`STATEMENT OF THE ISSUES ................................................................. 3
`III. 
`IV.  STATEMENT OF THE CASE .................................................................... 3
`A.  Overview of the ’486 and ’988 Patents .............................................. 4
`Specification Support for the “Single” and “One or
`1. 
`More” Merchant Restrictions Within a Payment Category ..... 7
`Claim Language Reciting the “Single” and “One of
`More” Merchant Restrictions Within a Payment Category ... 10
`Prosecution Statements Regarding the Claimed Payment
`Category ................................................................................. 12 
`Analogy to Computer Programming Variable
`Declarations ........................................................................... 16 
`The First and Second Post-Grant Challenges, Using the Cohen
`Prior Art, Each Fail .......................................................................... 17
`Ex Parte Reexamination of the ’988 Patent Results in
`1. 
`Confirmation of All Claims ................................................... 18
`The PTAB Denies Institution of CBMR Proceedings on
`the ’486 and ’988 Patents ....................................................... 24
`
`
`
`
`
`
`
`B. 
`
`2. 
`
`iii
`
`Patent Owner, Ex. 2011, p.4
`
`

`

`Case: 16-1592 Document: 13 Page: 5 Filed: 04/15/2016
`
`
`
`2. 
`
`2. 
`
`B. 
`
`C.  MasterCard’s Follow-on Post-Grant Challenge Using the
`Cohen Prior Art Results in a Final Written Decision that
`Contradicts the Ex Parte Reexamination Outcome Reached by
`Six Separate Central Reexamination Unit Examiners ..................... 25
`The PTAB’s Analysis Leads to a Nonsequitur Claim
`1. 
`Construction Built on Several Misunderstandings ................ 26
`The PTAB Construed the Claims in Light of the Cohen
`Prior Art, Refusing to Do So in Light of the Intrinsic
`Record .................................................................................... 30
`3. 
`The Insufficient Disclosures within the Cohen Prior Art ...... 31
`SUMMARY OF THE ARGUMENT ......................................................... 33
`V. 
`VI.  ARGUMENT .............................................................................................. 34 
`A. 
`Standard of Review .......................................................................... 34 
`1. 
`“Substantial Evidence” Review Applies to Findings of
`Fact, but Issues of Claim Construction Receive De Novo
`Review ................................................................................... 34 
`Standards for Reviewing Anticipation and Obviousness
`Conclusions ............................................................................ 36
`The PTAB Erred as a Matter of Law to Construe the Claims
`Using an Improper Methodology, Resulting in an Unreasonable
`Construction that Contradicts the Specification, Prosecution
`Histories, and Language of the Claims Themselves ........................ 37
`Under the Correct Claim Construction, Cohen Does Not
`Anticipate, and its Combination with Other References Does
`Not Render Obvious, Any Claims.................................................... 45
`Independently, No Substantial Evidence Supports the Finding
`that Cohen Discloses Defining a Payment Category Before
`Issuance of a Transaction Number ................................................... 52 
`VII.  CONCLUSION ........................................................................................... 56
`
`C. 
`
`D. 
`
`
`
`iv
`
`
`
`Patent Owner, Ex. 2011, p.5
`
`

`

`Case: 16-1592 Document: 13 Page: 6 Filed: 04/15/2016
`
`TABLE OF AUTHORITIES
`
`
`
`FEDERAL CASES
`ACCO Brands, Inc. v. Micro Sec. Devices, Inc.,
`346 F.3d 1075 (Fed. Cir. 2003) .......................................................................... 47
`
`
`Arlington Indus., Inc. v. Bridgeport Fittings, Inc.,
`345 F.3d 1318 (Fed. Cir. 2003) .......................................................................... 47
`
`
`CFMT, Inc. v. Yieldup Int’l Corp.,
`349 F.3d 1333 (Fed. Cir. 2003) .......................................................................... 37
`
`
`Dickinson v. Zurko,
`
`527 U.S. 150 (1999) ............................................................................................ 34
`
`Elkay Mfg. Co. v. Ebco Mfg. Co.,
`192 F.3d 973 (Fed. Cir. 1999) ............................................................................ 51
`
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`582 F.3d 1288 (Fed. Cir. 2009) .................................................................... 36-37
`
`
`In re Fine,
`
`837 F.2d 1071 (Fed. Cir. 1988) .......................................................................... 37
`
`In re Imes,
`778 F.3d 1250 (Fed. Cir. 2015) .......................................................................... 35
`
`
`Institut Pasteur v. Focarino,
`738 F.3d 1337 (Fed. Cir. 2013) .................................................................... 34-35
`
`
`Kinetic Concepts, Inc. v. Smith & Nephew, Inc.,
`
`688 F.3d 1342 (Fed. Cir. 2012) .......................................................................... 36
`
`KSR Int’l v. Teleflex Inc.,
`127 S. Ct. 1727 (2007) ........................................................................................ 37
`
`
`Laitram Corp. v. Morehouse Indus., Inc.,
`
`143 F.3d 1456 (Fed. Cir. 1998) .......................................................................... 48
`
`
`
`
`v
`
`
`
`Patent Owner, Ex. 2011, p.6
`
`

`

`Case: 16-1592 Document: 13 Page: 7 Filed: 04/15/2016
`
`
`
`FEDERAL CASES CONT’D
`
`Leo Pharma. Prods., Ltd. v. Rea,
`726 F.3d 1346 (Fed. Cir. 2013) .......................................................................... 36
`
`
`Microsoft Corp. v. Proxyconn, Inc.,
`
`789 F.3d 1292 (Fed. Cir. 2015) .............................................................. 35, 43, 44
`
`NeoMagic Corp. v. Trident Microsystems, Inc.,
`
`287 F.3d 1062 (Fed. Cir. 2002) .......................................................................... 39
`
`Net MoneyIn, Inc. v. Verisign, Inc.,
`545 F.3d 1359 (Fed. Cir. 2008) .......................................................................... 36
`
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) .......................................................................... 35
`
`
`Pride Mobility Prods. Corp. v. Permobile, Inc.,
` No. 2015-1585, -1586 (Fed. Cir. Apr. 5, 2016) .................................................. 44
`
`Salazar v. Proctor & Gamble,
`
`414 F.3d 1342 (Fed. Cir. 2005) .......................................................................... 48
`
`Southwall Techs. v. Cardinal IG Co.,
`54 F.3d 1570 (Fed. Cir. 1995) ............................................................................ 51
`
`
`SRI Int’l v. Matsushita Elec. Corp. of Am.,
`
`775 F.2d 1107 (Fed. Cir. 1985) .......................................................................... 39
`
`Std. Oil Co. v. Am. Cyanamid Co.,
`774 F.2d 448 (Fed. Cir. 1985) ............................................................................ 51
`
`
`Synqor, Inc. v. Artesyn Techs., Inc.,
`709 F.3d 1365 (Fed. Cir. 2013) .......................................................................... 36
`
`
`Teva Pharms. USA Inc. v. Sandoz Inc.,
`135 S. Ct. 831 (2015) .......................................................................................... 35
`
`
`
`
`
`vi
`
`
`
`Patent Owner, Ex. 2011, p.7
`
`

`

`Case: 16-1592 Document: 13 Page: 8 Filed: 04/15/2016
`
`
`
`FEDERAL CASES CONT’D
`
`Univ. of Va. Patent Found. v. GE,
`755 F. Supp. 2d 738 (W.D. Va. 2011) ................................................................ 50
`
`
`Wilson Sporting Goods Co. v. Hillerich & Bradsby Co.,
`442 F.3d 1322 (Fed. Cir. 2006) .......................................................................... 39
`
`
`FEDERAL STATUTES, REGULATIONS AND LEGISLATIVE HISTORIES
`157 Cong. Rec. S5428 (Sept. 8, 2011) .................................................................... 51
`
`28 U.S.C.
`
`section 1295(a)(4)(A) ........................................................................................... 3
`
`35 U.S.C.
`
`section 102 .......................................................................................................... 36
`
`section 102(b)...................................................................................................... 20
`section 102(e) .................................................................................................. 2, 18
`section 103(a) ........................................................................................................ 2
`section 141(c) ........................................................................................................ 3
`
`
`
`37 C.F.R.
`section 42.100(b) ................................................................................................ 35
`H.R. REP. 112-98 (2011) ......................................................................................... 51
`
`OTHER AUTHORITIES
`Conopco, Inc. d/b/a Unilever v. The Procter & Gamble Co.,
`
`IPR2014-00628, Paper No. 23 (P.T.A.B. March 20, 2015) ............................... 24
`
`
`
`vii
`
`
`
`Patent Owner, Ex. 2011, p.8
`
`

`

`Case: 16-1592 Document: 13 Page: 9 Filed: 04/15/2016
`
`
`
`
`
`INTRODUCTORY STATEMENT
`
`Appellant/Patent Owner John D’Agostino respectfully seeks reversal of IPR
`
`decisions of the Patent Trial and Appeal Board (“PTAB”) canceling all claims of
`
`U.S. Patent Nos. 7,840,486 (the “’486 Patent”) and 8,036,988 (the “’988 Patent”).
`
`The PTAB used a prior art patent to Cohen to find anticipation and obviousness.
`
`But by then, the Central Reexamination Unit (“CRU”) had ruled, using sound
`
`reasoning, that Cohen did not invalidate. Even Appellee MasterCard admits that
`
`this now means the Court confronts “diametrically opposed” decisions on the same
`
`evidence by the same agency. (Appx5361-5362). The PTAB explained this
`
`aberration by boasting of its access to more evidence than the CRU had. But the
`
`final written decisions pointed to no such extra evidence.
`
`The PTAB final written decisions created this problem because they used the
`
`wrong claim construction, while the CRU did not. The PTAB rejected both sides’
`
`constructions for the most important claim terms, unveiling new ones for the first
`
`time in the final written decisions. These sua sponte constructions contradicted the
`
`intrinsic evidence – including Patent Owner and examiner prosecution statements –
`
`while improperly construing the claims with the aim of reading on the prior art.
`
`This Court has rejected the PTAB’s methodology multiple times. This Court
`
`should reverse.
`
`
`
`1
`
`Patent Owner, Ex. 2011, p.9
`
`

`

`Case: 16-1592 Document: 13 Page: 10 Filed: 04/15/2016
`
`
`
`I.
`
`
`STATEMENT OF RELATED CASES
`
`Under Federal Circuit Rule 47.5, one case might directly affect or be
`
`affected by this Court’s decision.
`
` John D’Agostino v. Mastercard Inc., et al., Civil Action No. 1:13-cv-
`00738 (D. Del.)
`
`JURISDICTIONAL STATEMENT
`
`This is an appeal from two inter partes review (“IPR”) proceedings of the
`
`
`II.
`
`
`Patent Trial and Appeal Board (“PTAB”), IPR2014-00543 and IPR2014-00544.
`
`Appellant appeals the finding in IPR2014-00543 that claims 1-10, 15-25, 27-33,
`
`and 35-38 of U.S. Patent No. 8,036,988 are unpatentable under 35 U.S.C. § 102(e)
`
`as anticipated by U.S. Patent No. 6,422,462 to Cohen, and that claims 11-14, 26,
`
`and 34 are unpatentable under 35 U.S.C. § 103(a) as obvious over Cohen and U.S.
`
`Patent No. 5,826,243 to Musmanno. Appellant appeals the finding in IPR2014-
`
`00544 that claims 1-15 and 22-30 of U.S. Patent No. 7,840,486 are unpatentable
`
`under 35 U.S.C. § 102(e) as anticipated by Cohen, and that claims 16-21 are
`
`unpatentable under 35 U.S.C. § 103(a) as obvious over Cohen and Musmanno. The
`
`Board issued its decision from both IPR proceedings on August 31, 2015 (Appx1-
`
`26; Appx27-50). John D’Agostino (“Mr. D’Agostino”) timely filed a Notice of
`
`Appeal from both proceedings to this Court on January 8, 2016 (Appx5883-5887;
`
`Appx8801-8805). This Court has jurisdiction over this appeal from a final agency
`
`
`
`2
`
`Patent Owner, Ex. 2011, p.10
`
`

`

`Case: 16-1592 Document: 13 Page: 11 Filed: 04/15/2016
`
`
`action (the United States Patent and Trademark Office, or USPTO) under 28
`
`U.S.C. § 1295(a)(4)(A) and 35 U.S.C. § 141(c).
`
`III. STATEMENT OF THE ISSUES
`
`
`
`1. Whether the PTAB erred as a matter of law in construing certain
`
`patent claims in a manner that led it to conclude that the Cohen prior art anticipates
`
`some claims, and renders others obvious in combination with another item of prior
`
`art.
`
`
`
`2. Whether the PTAB lacked substantial evidence that Cohen discloses
`
`certain claim limitations, and therefore erred in its anticipation and obviousness
`
`holdings.
`
`IV. STATEMENT OF THE CASE
`
`
`
`As explained in detail below, this appeal turns mainly (but not exclusively)
`
`on whether the PTAB erred in its construction of certain claim terms that call out
`
`either a “single merchant limitation” requirement or a “one or more merchants
`
`limitation” requirement. Appellant and numerous examiners previously found the
`
`intrinsic record to support a scope for these claims that they must involve, first, a
`
`blank placeholder in a data structure for a particular merchant that has not been
`
`identified (or for a quantity of merchants, where none has been identified), and
`
`then, populating the blank in that data structure with the identity of a particular
`
`merchant (or merchants). The PTAB instead contradicted the conclusions of every
`
`
`
`3
`
`Patent Owner, Ex. 2011, p.11
`
`

`

`Case: 16-1592 Document: 13 Page: 12 Filed: 04/15/2016
`
`
`skilled patent examiner who had previously come to a final conclusion on the
`
`issue, including the “best of the best” within the Central Reexamination Unit. It
`
`held that the claims cover pre-identified merchants (i.e., something totally different
`
`from defining a blank placeholder, followed by filling in the placeholder with an
`
`identity). The PTAB’s sua sponte eleventh hour construction is nothing less than a
`
`grammatical train wreck. As will be discussed below, as phrased by the PTAB, a
`
`single merchant can be identified before the same merchant is identified – an
`
`impossible outcome that is logically contradictory, circular, and nonsensical.
`
`
`
`A. Overview of the ’486 and ’988 Patents
`
`The ’486 Patent and ’988 Patent are both entitled, “System and Method for
`
`Performing Secure Credit Card Transactions.” The specifications of the ’486
`
`Patent and the ’988 Patent are identical, with the exception of minor corrections.
`
`Both patents claim priority to January 15, 1999. The ’988 Patent is a continuation
`
`of the ’486 Patent.
`
`The Patents disclose a system and method of performing secure credit card
`
`purchases. A customer communicates with a custodial authorizing entity, such as a
`
`credit card company or issuing bank. The customer supplies the custodial
`
`authorizing entity with the account identification data such as the credit card
`
`number and a requested one of a possible plurality of predetermined payment
`
`categories that define parameters for authorization by the custodial authorizing
`
`
`
`4
`
`Patent Owner, Ex. 2011, p.12
`
`

`

`Case: 16-1592 Document: 13 Page: 13 Filed: 04/15/2016
`
`
`entity. (Appx58; Appx71). The custodial authorizing entity then generates a
`
`transaction code communicated exclusively to the customer wherein the customer
`
`in turn communicates only the transaction code to the merchant instead of a credit
`
`card number. (Appx58; Appx71). The elimination of the need to disclose an active
`
`credit card number during a merchant transaction establishes transaction security.
`
`Figure 1 shows a schematic representation of a flow chart of various steps involved
`
`in the performance of the system and method:
`
`A customer may commence using the system and method while viewing a
`
`
`
`product, either in person or by electronic techniques. The customer then (12)
`
`
`
`5
`
`Patent Owner, Ex. 2011, p.13
`
`

`

`Case: 16-1592 Document: 13 Page: 14 Filed: 04/15/2016
`
`
`contacts a custodial authorizing entity. (Appx65; Appx78). The customer (14)
`
`supplies appropriate identification data to inform the custodial authorizing entity of
`
`a specific customer’s credit card account and “payment category.” (Appx65;
`
`Appx78). The custodial authorizing entity (16) verifies the credit card status and
`
`account identification of the customer to determine the viability of the account.
`
`(Appx65; Appx78). If the accessed credit card account is not in good standing, the
`
`custodial authorizing entity will permanently or temporarily terminate the
`
`transaction as at 18 and/or communicate to the customer directly as at 18’ by any
`
`applicable means for purposes of informing the customer of the unacceptable status
`
`of the accessed credit card account. (Appx65; Appx78). If the credit card account
`
`is in good standing (20), the custodial authorizing entity generates a transaction
`
`code indicative of the original credit card account and selected “payment
`
`category,” and transmits it to the customer (22). (Appx65; Appx78). The customer
`
`then transmits it to the merchant (24). (Appx65; Appx78). The merchant (26)
`
`obtains authorization from the custodial authorizing entity. (Appx66; Appx79). If
`
`the transaction code is refused verification, the customer may be informed directly
`
`by the merchant (28) and/or the transaction may be terminated (30). (Appx66;
`
`Appx79). Assuming verification of the transaction code by the custodial
`
`authorizing entity, the merchant proceeds to consummate the purchase and fill the
`
`order (32). (Appx66; Appx79).
`
`
`
`6
`
`Patent Owner, Ex. 2011, p.14
`
`

`

`Case: 16-1592 Document: 13 Page: 15 Filed: 04/15/2016
`
`1.
`
`
`Specification Support for the “Single” and “One or More”
`Merchant Restrictions Within a Payment Category
`
`The main dispute in these proceedings centered on a data structure crucial
`
`
`
`for the practice of the system and method described above – the “payment
`
`category.” An important feature of the invention is the ability of the custodial
`
`authorizing entity and/or a processing computer of the custodial authorizing entity
`
`to issue a transaction code in accordance with the payment category. (Appx66;
`
`Appx79). The payment categories may define a variety of different types of
`
`transactions. Such transactions may include a single transaction for a specific
`
`amount of a purchase to be consummated. (Appx66; Appx79). Alternatively, the
`
`payment category may include a single transaction defined by a single purchase
`
`having a maximum limit amount, or to be completed within a fixed period of time.
`
`(Appx66; Appx79). These or other payment category restrictions may include a
`
`specific merchant identification to limit use of the transaction code. (Appx66;
`
`Appx79).
`
`But having a specific merchant identification is not the only way, since the
`
`specifications describe an alternative way (and one that became the claimed
`
`embodiments). The ’988 and ’486 Patents signal that the payment category may
`
`include a limitation that more than one purchase may be made from one or more
`
`different merchants, each of which may or may not be identified by the customer
`
`
`
`7
`
`Patent Owner, Ex. 2011, p.15
`
`

`

`Case: 16-1592 Document: 13 Page: 16 Filed: 04/15/2016
`
`
`and pre-coded in association with the transaction code. (Appx66, ’988 Patent,
`
`8:18-22; Appx79, ’486 Patent, 8:12-16). The Patents indicate, in this section, that
`
`in some instances when a customer, or an agent of the customer (a child, guardian,
`
`or care giver) must make a number of transactions or purchases which are
`
`authorized by the customer, the customer may designate a maximum amount
`
`which can be spent utilizing a particular transaction code within a predetermined
`
`period of time, and/or can designate that only one merchant, whether designated
`
`or not, can use the transaction code. (Appx66, ’988 Patent, 8:27-34; Appx79, ’486
`
`Patent, 8:21-28). Therefore, a merchant need not be identified even in instances
`
`when use is limited to a single merchant or plurality of merchants.
`
`The PTAB later expressed profound confusion over these teachings. It noted
`
`incorrectly:
`
`Patent Owner fails to provide us with a meaningful explanation as to
`how transactions are limited to a single merchant, without identifying
`any particular merchant. Accordingly, we determine that the “single
`merchant” includes the “particular merchant” without identifying the
`particular merchant. Absent such a relationship between the recited
`“single merchant” and “particular merchant,” the claim language
`would be indefinite as ambiguously limiting transactions to an
`unidentified, particular merchant.
`
`(Appx11-12 (IPR2014-00543 proceeding); Appx37 (IPR2014-00544 proceeding),
`
`emphases added). The Patents conveyed no ambiguity, but rather a clear teaching.
`
`Unambiguously within the claimed embodiments, a “payment category” data
`
`
`
`8
`
`Patent Owner, Ex. 2011, p.16
`
`

`

`Case: 16-1592 Document: 13 Page: 17 Filed: 04/15/2016
`
`
`structure may be limited to an unidentified single merchant or plural merchants
`
`(i.e., Appx66, ’988 Patent, 8:20-21 (“each of which may or may not be identified
`
`by the customer,” and 8:33-34, “can designate that only one merchant, whether
`
`designated or not, can use the transaction code”). And in any case, the same panel
`
`had previously observed, while denying institution of CBM proceedings (discussed
`
`below), that the relevant claim wording was not indefinite. (Appx10480-10481,
`
`CBM2013-00057, Decision Denying Institution of Covered Business Method
`
`Patent Review, at 10-11).
`
`Because the embodiments of the ’486 and ’988 Patents do not require a
`
`particular merchant to be identified prior to the generation of the transaction code
`
`(allowing a placeholder instead), the user is free to choose any merchant with
`
`whom to do a transaction. This provides flexibility to the consumer to decide
`
`which merchant or merchants can use the transaction code after a code is
`
`generated. As such, the transaction code (acting as a security token) is generated
`
`before identification of any merchant, though in one aspect it may be programmed
`
`so that only a “single” future merchant may validly use the transaction code. The
`
`customer is free to go to any store to select who will become that “single”
`
`merchant, and thus make a purchase. During original prosecution of the ’486
`
`Patent, Applicant remarked (in a passage overlooked by the PTAB):
`
`
`
`9
`
`Patent Owner, Ex. 2011, p.17
`
`

`

`Case: 16-1592 Document: 13 Page: 18 Filed: 04/15/2016
`
`
`
`It is a significant advantage to have a payment category, which limits
`transactions to a single merchant and can be “designated” by the
`customer in a simple method step. This makes it unnecessary for the
`customer to communicate, in advance, to the issuing entity, or even
`to know in advance, the identity of the merchant. Eliminating the
`need to identify the merchant to the issuing entity, in advance,
`significantly simplifies the process for both the customer and the
`issuer. Yet the customer can still benefit from the security advantage
`of a transaction code that is limited to a single merchant even if the
`identity of that single merchant has not yet been determined. It has
`been shown that customers are very reluctant to adopt security
`measures that impair the speed, efficiency, and ease-of-use of their
`credit cards. A payment category that is pre-defined to limit
`transactions to a single merchant offers a very simple and efficient
`method to adopt a highly effective security measure.
`
`(Appx1501, May 13, 2009 Applicant response, at 21, emphasis added).
`
`2.
`
`Claim Language Reciting the “Single” and “One or More”
`Merchant Restrictions Within a Payment Category
`
`The independent claims demand, as limitations, this flexibility for the
`
`
`
`consumer. The claims require that either a single merchant limitation or a plurality
`
`of merchants limitation (one or more) is included within a payment category prior
`
`to any particular merchant being identified as the single merchant or one of the
`
`plurality of merchants. The relevant claim language is:
`
`said single merchant limitation being included in said payment
`category prior to any particular merchant being identified as said
`single merchant
`
`(Appx68, ’988 Patent claim 21; Appx79-81, ’486 Patent claims 1, 24, 25, 29); and
`
`
`
`10
`
`Patent Owner, Ex. 2011, p.18
`
`

`

`Case: 16-1592 Document: 13 Page: 19 Filed: 04/15/2016
`
`
`
`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
`
`
`(Appx66-68, ’988 claims 1, 17, 19, 22). In both cases (the “single merchant
`
`limitation” or “one or more merchants limitation”), no one particular merchant is
`
`identified prior to the limitation being established within the payment category. It
`
`is simply a placeholder within the data structure, although one with a strict
`
`definition and consumer-oriented purpose.
`
`
`
`That the particular merchant is not initially identified in the above-cited
`
`portions of the claim language within the “payment category” data structure makes
`
`sense when examining the later following limitations. In the ’988 Patent claim 1,
`
`the merchant is not identified until limitation f) (“communicating said transaction
`
`code to a merchant to consummate a purchase with defined purchase parameters”).
`
`(Appx67). This is also reflected in ’988 Patent claim 17 limitation d)
`
`(“communicating said transaction code to a merchant to consummate a purchase
`
`within defined purchase parameters”); ’988 Patent claim 19 limitation d)
`
`(“designating a merchant as one of said one or more merchants”); ’988 Patent
`
`claim 21 limitation e) (“receiving a request to authorize payment for a purchase
`
`using said transaction code”); ’988 Patent claim 22 limitation e) (“receiving a
`
`request to authorize payment for a purchase using said transaction code”)
`
`(Appx67-68); ’486 Patent claim 1 limitation f) (“communicating said transaction
`
`
`
`11
`
`Patent Owner, Ex. 2011, p.19
`
`

`

`Case: 16-1592 Document: 13 Page: 20 Filed: 04/15/2016
`
`
`code to a merchant to consummate a purchase with defined purchase parameters”);
`
`’486 Patent claim 24 limitation d) (“communicating said transaction code to a
`
`merchant to consummate a purchase within defined purchase parameters”); ’486
`
`Patent claim 25 limitation d) (“communicating said transaction code to a merchant
`
`to consummate a purchase within defined purchase parameters”); and ’486 Patent
`
`claim 29 limitation d) (“designating a merchant as said single merchant”).
`
`(Appx79-81). Importantly, in each case, a particular merchant does not fill the
`
`blank placeholder until the customer either designates a merchant, communicates
`
`the transaction code to the merchant, or when the custodial authorizing entity
`
`receives a request to authorize payment to a merchant for a purchase using the
`
`code.
`
`
`
`3.
`
`Prosecution Statements Regarding the Claimed Payment
`Category
`
`As already mentioned, during original prosecution of the ’486 Patent,
`
`Applicant underscored that the claimed “payment category” data structure, at first,
`
`contains a placeholder for a “single merchant” that does not name who that
`
`merchant will be:
`
`It is a significant advantage to have a payment category, which limits
`transactions to a single merchant and can be “designated” by the
`customer in a simple method step. This makes it unnecessary for the
`customer to communicate, in advance, to the issuing entity, or even
`to know in advance, the identity of the merchant. Eliminating the
`need to identify the merchant to the issuing entity, in advance,
`
`12
`
`
`
`Patent Owner, Ex. 2011, p.20
`
`

`

`Case: 16-1592 Document: 13 Page: 21 Filed: 04/15/2016
`
`
`
`significantly simplifies the process for both the customer and the
`issuer. Yet the customer can still benefit from the security advantage
`of a transaction code that is limited to a single merchant even if the
`identity of that single merchant has not yet been determined. It has
`been shown that customers are very reluctant to adopt security
`measures that impair the speed, efficiency, and ease-of-use of their
`credit cards. A payment category that is pre-defined to limit
`transactions to a single merchant offers a very simple and efficient
`method to adopt a highly effective security measure.
`
`(Appx1501, May 13, 2009 Applicant response, at 21, emphasis added).
`
`Later, on December 10, 2009, Applicant filed remarks responding to a non-
`
`final rejection. In the response, Applicant acknowledged that the Examiner was
`
`asserting that a prior art patent to Langhans teaches the single merchant limitation
`
`d