IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`PATENT TRIAL & APPEAL BOARD
`
`
`John D’Agostino
`In re Patent of:
`U.S. Patent No.: 7,840,486
`Issue Date:
`November 23, 2010
`Application No.: 11/252,009
`Filing Date:
`October 17, 2005
`Title:
`System and Method for Performing
`Secure Credit Card Transactions
`
`
`
`
`
`
`
`
`
`
`DECLARATION OF DR. JACK D. GRIMES, Ph.D.
`
`MasterCard, Exh. 1008, p. 1
`
`
`PATENT TRIAL & APPEAL BOARD
`
`
`John D’Agostino
`In re Patent of:
`U.S. Patent No.: 7,840,486
`Issue Date:
`November 23, 2010
`Application No.: 11/252,009
`Filing Date:
`October 17, 2005
`Title:
`System and Method for Performing
`Secure Credit Card Transactions
`
`
`
`
`
`
`
`
`
`
`DECLARATION OF DR. JACK D. GRIMES, Ph.D.
`
`MasterCard, Exh. 1008, p. 1
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`INTRODUCTION .......................................................................................... 1
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`II. MATERIALS CONSIDERED ....................................................................... 1
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`III. BACKGROUND AND QUALIFICATIONS ................................................ 2
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`IV. STATE OF THE ART .................................................................................... 4
`
`V.
`
`LEVEL OF ORDINARY SKILL IN THE ART ............................................ 7
`
`VI. CLAIM CONSTRUCTION ........................................................................... 9
`
`VII. DISCUSSION OF RELEVANT PRIOR ART ............................................ 13
`
`A.
`
`B.
`
`C.
`
`Legal Standards .................................................................................. 13
`
`Summary of My Opinions .................................................................. 16
`
`U.S. Patent No. 6,422,462 to Cohen .................................................. 17
`
`D. U.S. Patent No. 6,636,833 to Flitcroft et al. ....................................... 23
`
`E.
`
`F.
`
`U.S. Patent No. 5,826,243 to Musmanno et al. .................................. 29
`
`U.S. Patent No. 6,422,462 to Cohen as 102(e) Prior Art ................... 34
`
`G. U.S. Patent No. 8,636,833 to Flitcroft as 102(e) Prior Art ................ 63
`
`
`
`i
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`MasterCard, Exh. 1008, p. 2
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`
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`I, Jack D. Grimes, Ph.D., declare as follows:
`
`I.
`
`INTRODUCTION
`(1)
`
`I submit this Declaration in support of MasterCard International
`
`Incorporated’s “Petition for Inter Partes Review of U.S. Patent No. 7,840,486”
`
`(“Petition”). I make this Declaration based upon personal knowledge and
`
`experience in the relevant technical field, specifically related to systems and
`
`methods for performing secure payment card transactions, and on my review and
`
`consideration of related documents and information referenced in this Declaration.
`
`I am not a lawyer and, consequently, this Declaration references, and is based on,
`
`my understanding of certain legal principles as informed by conversations with
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`outside counsel for MasterCard International Incorporated (“MasterCard”).
`
`(2)
`
`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
`
`and Appeal Board. I am over eighteen years of age and I would otherwise be
`
`competent to testify as to the matters set forth herein if I am called upon to do so.
`
`II. MATERIALS CONSIDERED
`(3)
`
`In developing my opinions below relating to the ’486 Patent, I have
`
`considered the following materials:
`
` Exhibit 1001 – U.S. Patent No. 7,840,486
`
` Exhibit 1002 – File History for U.S. Patent No. 7,840,486
`
`
`
`1
`
`MasterCard, Exh. 1008, p. 3
`
`
`
` Exhibit 1003 – File History for U.S. Reexamination No. 90/012,517
`
` Exhibit 1004 – U.S. Patent No. 6,422,462 (“Cohen”)
`
` Exhibit 1005 – U.S. Patent No. 6,636,833 (“Flitcroft”)
`
` Exhibit 1006 – U.S. Patent No. 5,826,243 (“Musmanno”)
`
` Exhibit 1007 – Complaint in D’Agostino v. MasterCard, Inc. et al. (13-cv-
`
`0738)
`
` Exhibit 1009 – Excerpts from Random House Webster’s Unabridged
`
`Dictionary, Second Edition (“Random House Webster”)
`
` Exhibit 1010 – U.S. Patent No. 6,064,987 (“Walker”)
`
` Exhibit 1011 – U.S. Patent No. 5,283,829 (“Anderson”)
`
` Exhibit 1012 – ISO 8583 Financial Transaction Card Originated Messages –
`
`Interchange Message Specifications (1992) (“ISO 8583”)
`
` Exhibit 1013 – File History for U.S. Patent No. 8,036,988
`
` Exhibit 1014 – Patent Trial and Appeal Board’s (“PTAB”) 3/7/14 CBM
`
`Decision for U.S. Patent No. 8,036,988
`
` Exhibit 1015 – Patent Trial and Appeal Board’s (“PTAB”) 3/7/14 CBM
`
`Decision for U.S. Patent No. 7,840,486
`
` Exhibit 1016 – Patent Owner’s 12/24/13 Preliminary Response to
`
`Petitioner’s Request for CBM Patent Review of the ‘988 Patent
`
` Exhibit 1017 – U.S. Provisional App. No. 60/079,884 for Cohen
`
`
`
`2
`
`MasterCard, Exh. 1008, p. 4
`
`
`
` Exhibit 1018 – U.S. Provisional App. No. 60/099,614 for Flitcroft
`
` Exhibit 1019 – U.S. Provisional App. No. 60/098,175 for Flitcroft
`
` Exhibit 1020 – U.S. Provisional App. No. 60/092,500 for Flitcroft
`
`III. BACKGROUND AND QUALIFICATIONS
`(4)
`I earned B.S. and M.S. degrees in Electrical Engineering, and a Ph.D.
`
`degree in Electrical Engineering (with a minor in Computer Science), all from
`
`Iowa State University. I also earned an M.S. degree in Experimental Psychology
`
`from the University of Oregon. I have been active in several professional societies
`
`and have worked in the computer and electronics field for over forty (40) years
`
`including teaching at two universities. Details of my education and work
`
`experience are set forth in my curriculum vitae, which is attached as Appendix A.
`
`(5)
`
`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
`
`technology companies. My duties included management of two technology and
`
`strategy groups containing over 30 people. One group provided chip card and
`
`related technology development for new products and services, including SET
`
`(Secure Electronic Transactions over the Internet). The other group was
`
`responsible for the global network and processing architecture strategy to replace
`
`
`
`3
`
`MasterCard, Exh. 1008, p. 5
`
`
`
`the then current VisaNet services, providing credit card authorization and
`
`settlement. I also served as an internal consultant on Internet payment systems.
`
`(6)
`
`I have reviewed United States Patent No. 7,840,4861 (“the ’486 patent”)
`
`to D’Agostino. I have also reviewed the publications cited within this declaration
`
`and referenced in the Petition submitted herewith.
`
`IV. STATE OF THE ART
`(7) The technology for performing secure credit card purchases in connection
`
`with remote commercial transactions was well known by the year 1999.
`
`Credit Card Fraud
`
`(8) There were, before the application leading to the ’486 patent was filed,
`
`and are still today many well-known ways that an unauthorized user can obtain
`
`your name, credit card number and expiration date. Credit cards have become so
`
`widely used that fraud is a major problem and concern for most cardholders.
`
`(9)
`
`In attended, point-of-sale (POS) transactions, the cardholder’s signature
`
`is to be compared to the signature written on the credit card. This provides
`
`authentication that the person utilizing the credit card is, in fact, the cardholder. In
`
`Europe, where chip cards are common, attended transactions typically require the
`
`entry of a PIN at the point-of-sale.
`
`1 John D’Agostino, “System and Method for Performing Secure Credit Card
`
`Transactions,” U.S. Patent No. 7,840,486, issued November 23, 2010 (Exh. 1001).
`
`
`
`4
`
`MasterCard, Exh. 1008, p. 6
`
`
`
`(10) However, these solutions do not work for “remote transactions,” such as
`
`on-line purchases using the Internet or for transactions over the telephone. In these
`
`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.
`
`(11) As a result, in remote transactions, the opportunity existed and exists for
`
`an unauthorized user to provide a stolen credit card number with accompanying
`
`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
`
`based on the credit card information provided for a transaction. The fraudulent
`
`transaction can only be identified later (e.g., if the cardholder realizes that a
`
`fraudulent transaction has occurred).
`
`(12) To address these problems and the problem of credit card fraud generally,
`
`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
`
`to Flitcroft et al. (Exh. 1005, “Flitcroft”).
`
`(13) One well-known solution to credit card fraud is creating a limited-use
`
`credit card that is restricted to a single use. (See Cohen at C2:35-43; Flitcroft at
`
`C6:53-56) Each of these single use cards has a unique card number that is
`
`different from the master credit card account number. That way, if the card
`
`number and accompanying info is subsequently stolen, that card number cannot be
`
`
`
`5
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`MasterCard, Exh. 1008, p. 7
`
`
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`used for a second purchase. After the card is used, it may be discarded.
`
`(14) Another well-known solution to credit card fraud is creating a limited-use
`
`credit card with restrictions on its usage, such as limiting the dollar amount,
`
`limiting the frequency of use, or limiting the merchant category where the card
`
`may be used – such as for airline tickets or for clothing stores. (See Cohen at
`
`C7:66-8:46; Flitcroft at C8:2-10). These limited use cards also have numbers that
`
`are different from the master credit card account number. That way, the limited-
`
`use card number cannot be used for purchases that are inconsistent with the
`
`restrictions on its usage.
`
`Repeating Credit Card Transactions
`
`(15) It was also well known in the art before the time the ’486 patent
`
`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
`
`club. For example, U.S. Patent No. 5,283,829 to Anderson (Exh. 1011,
`
`“Anderson”) discloses that various banking institutions offer their subscribers the
`
`option of automatically paying monthly reoccurring charges (such as car notes,
`
`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 ’486 patent
`
`application was filed that these repeating payments could be set-up and charged to
`
`
`
`6
`
`MasterCard, Exh. 1008, p. 8
`
`
`
`a credit card account. For example, U.S. Patent No. 6,064,987 to Walker (Exh.
`
`1010, “Walker”) discloses the use of credit cards for “installment plans” in which a
`
`user can set up a repeating transaction with a credit card to make payments at
`
`various time intervals, such as once a month. (See Walker at C1:66-2:10; C4:25-
`
`32; C4:37-40).
`
`MCC Codes
`
`(17) MCC codes were, before the time the ’486 patent application was filed,
`
`used for assigning merchant type categories. MCC codes were typically created
`
`and assigned to merchants in two separate steps. The first step involves the
`
`creation of a merchant type category. The second step involves the assignment of
`
`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
`
`(Annex C).
`
`V. LEVEL OF ORDINARY SKILL IN THE ART
`(18) I understand from counsel that the level of ordinary skill in the art related
`
`to the ’486 patent is important in assessing what certain claim terms mean, and
`
`whether the invention claimed in the ’486 patent would have been obvious at the
`
`time it was made (or when the application was filed). In particular, I understand
`
`from counsel that the content of a patent and prior art should be interpreted in the
`
`
`
`7
`
`MasterCard, Exh. 1008, p. 9
`
`
`
`way a person of ordinary skill in the art would have interpreted the patent and prior
`
`art at the time or not long before the application for the ’486 patent was filed
`
`(January, 1999), using the broadest reasonable interpretation of the claim terms. In
`
`my opinion, the level of ordinary skill in the art of the ’486 patent is a person
`
`having a B.S. degree in Electrical Engineering or Computer Science, or the
`
`equivalent experience, with at least three years of experience (or post-graduate
`
`work) in payment card payment technologies, including experience in existing,
`
`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.
`
`(19) Based on my experience, I have an understanding of the capabilities of a
`
`person of ordinary skill in the art. In particular, the basis for my familiarity with
`
`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,
`
`I had those capabilities myself at the time the ’486 patent was filed. In reaching
`
`this opinion, I have considered the types of problems encountered in the art, the
`
`prior art solutions to those problems, the rapidity with which innovations were and
`
`
`
`8
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`MasterCard, Exh. 1008, p. 10
`
`
`
`are made, the sophistication of the technology, and the educational level and
`
`professional capabilities of workers in the field.
`
`VI. CLAIM CONSTRUCTION
`(20) In proceedings before the USPTO, I understand from counsel that claims
`
`of a patent are to be given their broadest reasonable interpretation in view of the
`
`specification from the perspective of one skilled in the art, and that this is a
`
`different standard from that which is used in district court proceedings. I also
`
`understand from counsel that claim terms are presumed to carry their plain and
`
`ordinary meaning, and are to be read in light of the patent’s specification and file
`
`history, but that if the named inventors define terms in certain ways or make
`
`certain representations to the USPTO, that such definitions and representations
`
`should be considered and may dictate, in circumstances where there is a clear
`
`disavowal of claim scope, a claims term’s particular meaning. I have carefully
`
`considered the ’486 patent, and its file history based upon my experience and
`
`knowledge in the field, and believe the following terms should have the following
`
`meanings from the perspective of one skilled in the art.
`
`(21) The claim limitation “generating [a/said] transaction code” should be
`
`construed, consistent with the patent’s specification and explicit teaching, to mean
`
`“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
`
`
`
`9
`
`MasterCard, Exh. 1008, p. 11
`
`
`
`account.” (See Exh. 1001, ’486 Patent at Abstract; C3:43-48; C6:19-43; C6:63-
`
`7:1).2 The named inventors made clear that the “transaction code” is “used in
`
`substitution for the specific credit card number” and “is pre-coded to be indicative
`
`of a specific credit card account.” (See Exh. 1001, ’486 Patent, C6:23-24, 28-29).
`
`No other definitions are provided, and no other embodiments are taught or
`
`suggested. As a result, one of ordinary skill in the art, reading the claims in view
`
`of the specification, and giving this term its broadest reasonable meaning, would
`
`understand the term “generating [a/said] transaction code” to mean as I note above.
`
`(22) The claim limitation “defining at least one payment category” may be
`
`construed, consistent with its plain and ordinary meaning, to mean “specifying the
`
`type of limitation (or limitations) that are available to be applied to a transaction
`
`code in order to limit its use.” This construction is supported by, and consistent
`
`with the disclosure of the term in the ’486 Patent. (See Exh. 1001, ’486 Patent at
`
`C2:67-3:3; C3:48-4:2; C4:20-24; C7:2-8; C7:56-8:43).
`
`
`2 To the extent the Board does not accept this construction of “generating [a/said]
`
`transaction code,” and the Board provides an alternative construction without the
`
`clause “the number pre-coded to be indicative of a specific credit card account,”
`
`(which I respectfully submit would be improper) then I provide additional grounds
`
`in Sections VII below for invalidating the claims.
`
`
`
`10
`
`MasterCard, Exh. 1008, p. 12
`
`
`
`(23) The claim limitation “particular merchant” may be construed, consistent
`
`with its plain and ordinary meaning, to mean “a specific merchant with whom a
`
`customer can engage in the purchase transaction.” This construction is supported
`
`by, and consistent with the disclosure of the term in the ’486 Patent. (See Exh.
`
`1001, ’486 Patent at C3:67-4:2; C4:8-13; C4:44-49).
`
`(24) The claim limitation “verifying that said defined purchase parameters are
`
`within said designated payment category” may be construed, consistent with its
`
`plain and ordinary meaning, to mean “ascertaining that any limitation associated
`
`with the designated payment category is satisfied.” This construction is supported
`
`by, and consistent with the disclosure of the term in the ’486 Patent. (See Exh.
`
`1001, ’486 Patent at C4:8-13; C7:8-24) This construction is also consistent with
`
`the dictionary definition of the word “verify.” (See Exh. 1009, Random House
`
`Webster at 2114).
`
`(25) The claim limitation “promotional material” may be construed, consistent
`
`with its plain and ordinary meaning, to mean “any information about the product
`
`that facilitates the purchase transaction.” This construction is supported by, and
`
`consistent with the disclosure of the term in the ’486 Patent. (See Exh. 1001, ’486
`
`Patent at C3:7-12; C5:36-48; C7:25-38).
`
`(26) The claim limitation “prior to any particular merchant being identified”
`
`may be construed, consistent with its plain and ordinary meaning, to mean “prior to
`
`
`
`11
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`MasterCard, Exh. 1008, p. 13
`
`
`
`the identification of a particular merchant for the particular transaction(s) or
`
`purchase(s) in the payment category.” This construction is supported by, and
`
`consistent with the disclosure of the limitation in the ’486 Patent. (See Exh. 1001,
`
`’486 Patent at C6:33-43, Fig. 1) This construction is also consistent with the
`
`prosecution history of the ’486 Patent. (See Exh. 1002, ’486 Patent File History,
`
`7/26/10 Office Action at 18-19).3
`
`
`3 In the prosecution of the ’486 Patent, D’Agostino argued that prior art U.S. Pat.
`
`No. 5,500,513 (“Langhans”) teaches the use of MCC codes for creating a list of
`
`approved vendors, which is used to authorize a purchase if it is within an approved
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`MCC code. Exh. 1002, ’486 Patent File History, 7/26/10 Office Action at 18-19.
`
`D’Agostino conceded that “[i]n order to be included on an approved vendor list, a
`
`vendor must be identified.” Id. at 19 (emphasis added). D’Agostino, however,
`
`then argued that identifying a merchant by the MCC code as disclosed in Langhans
`
`did not teach the “prior to any particular merchant being identified as said single
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`merchant.” Id. This suggests that simply pre-identifying a merchant by an MCC
`
`code is insufficient to satisfy the element “prior to any particular merchant being
`
`identified” – and that the claimed identification must be related to the transaction
`
`in the payment category.
`
`
`
`12
`
`MasterCard, Exh. 1008, p. 14
`
`
`
`VII. DISCUSSION OF RELEVANT PRIOR ART
`A. Legal Standards
`(27) In proceedings before the USPTO, I understand from counsel that the
`
`claims of an unexpired patent are to be given their broadest reasonable
`
`interpretation in view of the specification from the perspective of one skilled in the
`
`field. It is my understanding that the ’486 patent has not expired. In comparing
`
`the claims of the ’486 patent to the known prior art, I have carefully considered the
`
`’486 patent, and the ’486 patent file history based upon my experience and
`
`knowledge in the relevant field.
`
`(28) I am informed that the ’486 patent is a continuation of U.S. Patent
`
`Application No. 10/037,007, filed on November 9, 2001, which is a continuation-
`
`in-part of U.S. Patent Application No. 09/213,745, filed on January 15, 1999.
`
`(29) It is my understanding from counsel that a claim may be invalid as
`
`anticipated under 35 U.S.C. § 102 if each and every element of a claim, as properly
`
`construed, is disclosed either explicitly or inherently in a single prior art reference,
`
`subject to the limitations imposed by § 102 in paragraphs a-g. Under the principles
`
`of inherency, if the prior art necessarily functions in accordance with, or includes
`
`the claimed limitations, it anticipates. Persons of ordinary skill need not recognize
`
`the inherent characteristics or functioning of the prior art. In addition, a new
`
`scientific explanation for the functioning of the prior art does not render the old
`
`
`
`13
`
`MasterCard, Exh. 1008, p. 15
`
`
`
`composition patentable. Such a reference, if it contained each and every element
`
`of a claim, would anticipate the claim.
`
`(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
`
`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
`
`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
`
`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
`
`scope and content of the prior art, the differences between the prior art and the
`
`claim at issue, the level of ordinary skill in the art and secondary indicia of
`
`obviousness and non-obviousness to the extent such indicia exist. The scope of the
`
`prior art comprises any prior art that was reasonably pertinent to the particular
`
`problems the inventor faced.
`
`(32) It is further my understanding from counsel that the determination of
`
`whether the asserted claims would have been obvious to a person of ordinary skill
`
`in the art and, therefore, invalid, is not governed by any rigid test or formula. A
`
`determination that a claim is obvious is, instead, based on a common sense
`
`
`
`14
`
`MasterCard, Exh. 1008, p. 16
`
`
`
`determination that the claimed invention is merely a combination of known
`
`limitations to achieve predictable results. Any of the following rationales are
`
`acceptable justifications to conclude that a claim would have been obvious: the
`
`claimed invention is simply a combination of known prior art methods to yield
`
`predictable results; the claimed invention is a simple substitution of one known
`
`element for another to obtain predictable results; the claimed invention uses known
`
`techniques to improve similar devices (methods, or products) in the same way; the
`
`claimed invention applies a known technique to a known device (method, or
`
`product) ready for improvement to yield predictable results; the claimed invention
`
`was “obvious to try”—choosing from a finite number of identified, predictable
`
`solutions, with a reasonable expectation of success; there is known work in one
`
`field of endeavor that may prompt variations of it for use in either the same field or
`
`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
`
`teaching, suggestion, or motivation in the prior art that would have led one of
`
`ordinary skill in the art to modify the prior art reference to combine prior art
`
`teachings to arrive at the claimed inventions.
`
`(33) It is my understanding from counsel that, in addition, a claim can be
`
`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
`
`
`
`15
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`MasterCard, Exh. 1008, p. 17
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`
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`common sense or knowledge of one of ordinary skill in the art.
`
`(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
`
`priority date and consider whether the invention as a whole would have been
`
`obvious to a person of ordinary skill in the art, taking into consideration any
`
`interrelated teachings of the prior art, the effects of demands known to the design
`
`community or present in the marketplace, and the background knowledge
`
`possessed by a person having ordinary skill in the art, all in order to determine
`
`whether there was an apparent reason to combine any known elements in the
`
`fashion claimed by the patent at issue.
`
`B.
`(35)
`
`
`
`Summary of My Opinions
`
`In view of the above, and as set forth in greater detail below, my
`
`opinion is that the ’486 patent is invalid on the following grounds:
`
` GROUND 1. Claims 1-15 and 22-30 are Unpatentable under 35 USC § 102 as
`
`Anticipated by Cohen
`
` GROUND 2. Claims 16-21 are Unpatentable under 35 USC § 103 as Obvious
`
`over Cohen in view of Musmanno
`
` GROUND 3. Claims 1-15 and 22-30 are Unpatentable under 35 USC § 102 as
`
`
`
`16
`
`MasterCard, Exh. 1008, p. 18
`
`
`
`Anticipated by Flitcroft
`
` GROUND 4. Claims 16-21 are Unpatentable under 35 USC § 103 as Obvious
`
`over Flitcroft in view of Musmanno
`
` GROUND 5. To the extent the Board finds that Cohen does not anticipate
`
`claims 1-15 and 22-30, these claims would be obvious over
`
`Cohen alone, or together with the common sense and knowledge
`
`of a person of ordinary skill in the art
`
` GROUND 6. To the extent the Board finds that Flitcroft does not anticipate
`
`claims 16-21, these claims would be obvious over Flitcroft
`
`alone, or together with the common sense and knowledge of a
`
`person of ordinary skill in the art
`
`C. U.S. Patent No. 6,422,462 to Cohen
`(36) I’ve been asked to consider whether claims 1-15 and 22-30 of the ’486
`
`patent are invalid as anticipated under 35 U.S.C. § 102 by U.S. Patent No.
`
`6,422,462 to Cohen (Ex. 1004, “Cohen”). In my opinion, based on the legal
`
`principles expressed above, and using the constructions I have proposed, these
`
`claims are clearly anticipated by Cohen - and I set forth in detail how each
`
`limitation is met by Cohen in the claim charts attached as Exhibit 1, and as set
`
`forth in the accompanying Petition showing that each element of claims 1-10, 15-
`
`
`
`17
`
`MasterCard, Exh. 1008, p. 19
`
`
`
`25, 27-33, & 35-38 is invalid as anticipated by Cohen. I support and agree with the
`
`claim charts set forth in the Petition.
`
`(37) I have read and I understand Cohen. Cohen teaches a secure method for
`
`engaging in credit card transactions, which limits the transactions to selected
`
`vendors. (Cohen at C2:32-43). Cohen discloses a credit card holder contacting
`
`their credit card company, verifying their identity, and then receiving a transaction
`
`code number to be used for a limited number of transactions. (Cohen at C3:41-48).
`
`The credit card holder can determine and customize the use of the transaction code
`
`number. (Cohen at C3:49-52). After the credit card holder has received the
`
`transaction code number, they can use the number with a merchant as a substitute
`
`for a regular credit card number, and the merchant can validate the transaction code
`
`number with the credit card company. (Cohen at C5:35-39). The credit card
`
`company can validate the transaction code number, or deny the transaction if the
`
`number is used for anything other than the pre-determined use indicated by the
`
`credit card holder. (Cohen at C5:44-49).
`
`(38) Cohen discloses a transaction code number that is limited in use to
`
`transactions with one or more merchants: “А customized credit card could be
`
`issued to the user which is only valid for use for that particular type of charge
`
`(computer hardware or software stores)…The card could even [be] customized for
`
`use in a particular store itself or a particular chain of stores (such as a particular
`
`
`
`18
`
`MasterCard, Exh. 1008, p. 20
`
`
`
`restaurant, or a particular chain of restaurants).” (Cohen at C8:25-35). “The card
`
`could be valid only for purchase … in a certain store, or group of stores or types of
`
`stores (e.g. clothing stores).” (Cohen at C8:43-46). A limitation to a particular
`
`“group”, “type”, or “chain” of stores is a limitation to one or more merchants.
`
`(39) Cohen discloses a “payment category…limiting…purchases to a single
`
`merchant.” Cohen discloses a transaction code number that is limited in use to a
`
`one-time transaction with one merchant: “The card could even [be] customized for
`
`use in a particular store itself...” (Cohen at C8:25-34). “[I]n one
`
`embodiment…[t]hese credit cards or credit card numbers are generated for a one
`
`time, single transaction basis, after which they are disposed of, or thrown away.
`
`The numbers can be used…to effect a single transaction.” (Cohen at C2:35-43). A
`
`credit card number that is customized for a one-time use, to execute a single
`
`transaction, is by definition limited to purchases with a single merchant.
`
`Accordingly, the system disclosed in Cohen inherently includes the step to limit
`
`the transaction code to one merchant.
`
`(40) Cohen discloses: “said single merchant limitation being included in said
`
`payment category prior to any particular merchant being identified as said single
`
`merchant”. Cohen discloses that the transaction code could be limited to a single
`
`transaction: “in one embodiment…[t]hese credit cards or credit card numbers are
`
`generated for a one time, single transaction basis” and subsequently “[a]fter a one
`
`
`
`19
`
`MasterCard, Exh. 1008, p. 21
`
`
`
`time use of the credit card number, the number is deactivated.” (Cohen at C2:35-
`
`43; C8:25-46; C12:3-4). A one-time use transaction code can only be used at one
`
`merchant; therefore the transaction code is inherently limited to a one merchant.
`
`This limitation to a single merchant occurs before the transaction code is used for
`
`purchase – and in effect, before the particular merchant is identified. Therefore,
`
`the single-use transaction code as disclosed by Cohen is inherently limited to a
`
`single merchant before any particular merchant is identified.
`
`(41) Cohen discloses a “ transaction code [reflecting/associated with]…the
`
`limits of said payment category.” Cohen discloses that “[a] customized credit card
`
`could be issued to the user which is only valid for use for that particular type of
`
`charge … such that if the employee tries to use it for anything else in excess of that
`
`authorized, the charge will be declined.” (Cohen at C8:25-32) Cohen’s disclosure
`
`of declining authorization inherently shows that the transaction code reflects and is
`
`associated with the limits on use.
`
`(42) Cohen discloses “the step of designating said single merchant subsequent
`
`to generating said transaction code.” Cohen discloses that the user “accesses one
`
`of his or her disposable credit cards” and then “the user transmits his or her credit
`
`card information to the vendor.” (Cohen at C5:29-37). By transmitting the
`
`transaction code (i.e. the disposable credit card number) to the vendor, the user is
`
`designating the vendor as the single merchant.
`
`
`
`20
`
`MasterCard, Exh. 1008, p. 22
`
`
`
`(43) Cohen discloses “said step of verifying that said defined purchase
`
`parameters correspond to said selected payment category further identifies said
`
`merchant as said single merchant.” Cohen discloses that the merchant seeks
`
`verification of the purchase parameters: “Upon use of the card, the information
`
`regarding the transaction is transmitted to the credit card company, as is known in
`
`the art.” (Cohen at C13:66-C14:1). “That vendor then verifies the transaction and
`
`obtains an authorization code from the credit card company authorizing the
`
`purchase, as is currently standard practice with
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