Trials@uspto.gov
`571-272-7822
`
`
`
`
`
` Paper 9
`Entered March 7, 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 CBM2013-00057
`Patent 8,036,988
`____________
`
`
`
`Before SALLY C. MEDLEY, KARL D. EASTHOM, and
`KALYAN K. DESHPANDE, Administrative Patent Judges.
`
`DESHPANDE, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`MasterCard, Exh. 1014, p. 1
`
`
`571-272-7822
`
`
`
`
`
` Paper 9
`Entered March 7, 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 CBM2013-00057
`Patent 8,036,988
`____________
`
`
`
`Before SALLY C. MEDLEY, KARL D. EASTHOM, and
`KALYAN K. DESHPANDE, Administrative Patent Judges.
`
`DESHPANDE, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`MasterCard, Exh. 1014, p. 1
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`INTRODUCTION
`I.
`MasterCard International Incorporated (“Petitioner”) filed a petition
`(“Pet.”) requesting a review under the transitional program for covered
`business method patents of U.S. Patent No. 8,036,988 B2 (Ex. 1001, “the
`’988 patent”). Paper 5. John D’Agostino (“Patent Owner”) filed a
`preliminary response (“Prelim. Resp.”). Paper 8. The Board has jurisdiction
`under 35 U.S.C. § 324.1
`The standard for instituting a covered business method patent review
`is set forth in 35 U.S.C. § 324(a), which provides as follows:
`THRESHOLD—The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is
`more likely than not that at least 1 of the claims challenged in
`the petition is unpatentable.
`
`Petitioner challenges the patentability of claims 1-38 of the ’988
`patent under 35 U.S.C. §§ 102, 103, and 112, second paragraph. Taking into
`account Patent Owner’s preliminary response, we determine that the
`information presented in the petition does not demonstrate that it is more
`likely than not that the challenged claims are unpatentable. Pursuant to 35
`U.S.C. § 324(a), we deny the institution of a covered business method patent
`review as to claims 1-38 of the ’988 patent.
`
`
`1 See Section 18(a) of the Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284, 329 (2011) (“AIA”).
`
`2
`
`MasterCard, Exh. 1014, p. 2
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`The ’988 Patent
`A.
`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
`col. 1, ll. 19-29.
`Figure 3 of the ’988 patent follows:
`
`
`Figure 3 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. Id. at col. 7, ll.
`30-35. Customer 54 then contacts custodial authorizing entity 64, by either
`telephone 66' or computer 45', for authorization. Id. at col. 7, ll. 35-43.
`
`3
`
`MasterCard, Exh. 1014, p. 3
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`After confirming 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 col. 7, ll. 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 col 7, ll. 46-55.
`
`Related Matters
`B.
`Petitioner and Patent Owner identify the following related district
`court proceeding involving the ’988 Patent and in which Petitioner is a
`party: John D’Agostino v. MasterCard, Inc. et al., Case No. 1:13-cv-00738
`(D. Del., filed April 26, 2013). Pet. 5; Prelim. Resp. 4; Ex. 1007
`(“Complaint for Patent Infringement”).
`Petitioner and Patent Owner also identify the ’988 patent as the
`subject of Ex Parte Reexamination proceeding No. 90/012,517. Pet 5-6;
`Prelim. Resp.18; Ex. 1003 (“Ex Parte Reexamination Office Action”).
`In related proceeding CBM2013-00058, Petitioner also seeks review
`of U.S. Patent No. 7,840,486 B2, to which the ’988 patent claims priority.
`Pet. 6.
`
`Illustrative Claim
`C.
`Petitioner challenges claims 1-38 of the ’988 patent. Claims 1, 17, 19,
`21, and 22 are independent claims. Claim 1 is illustrative of the claims at
`issue and follows:
`
`4
`
`MasterCard, Exh. 1014, p. 4
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`A method of performing secure credit card purchases,
`1.
`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.
`
`5
`
`MasterCard, Exh. 1014, p. 5
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`D.
`
`The Alleged Grounds of Unpatentability
`
`The information presented in the Petition sets forth Petitioner’s
`contentions of unpatentability of claims 1-38 of the ’988 patent under 35
`U.S.C. §§ 102, 103, and 112, second paragraph, as follows (see Pet. 6-7, 14-
`79):
`
`Reference(s)
`
`Basis
`
`Challenged Claims
`
`Cohen2
`Cohen and
`Musmanno3
`Flitcroft4
`Flitcroft and
`Musmanno
`
`None
`
`§ 102(e)
`
`§ 103
`
`§ 102(e)
`
`§ 103
`
`§ 112, second
`paragraph
`
`1-10, 15-25, 27-33,
`and 35-38
`11-14, 26, and 34
`1-10, 15-25, 27-33,
`and 35-38
`11-14, 26, and 34
`
`1-20, 22, and 31-38
`
`ANALYSIS
`II.
`Covered Business Method Patent
`
`A.
`
`As indicated above, claim 1 recites “a method of performing secure
`credit card purchases.” We determine that the ’486 Patent is a ‘covered
`business method patent’ under § 18(d)(1) of the AIA. See note 1; Pet. 3-5
`
`
`2 U.S. Patent No. 6,422,462 B1 (Ex. 1004) (“Cohen”).
`3 U.S. Patent No. 5,826,243 (Ex. 1006) (“Musmanno”).
`4 U.S. Patent No. 6,636,833 B1 (Ex. 1005) (“Flitcroft”).
`
`6
`
`MasterCard, Exh. 1014, p. 6
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`(quoting and discussing § 18(d)(1)). As Petitioner contends, we determine
`that “the subject matter as a whole solves no ‘technical problem,’ and
`instead is directed to a method of carrying out a financial transaction.” See
`Pet. 4. Patent Owner does not challenge Petitioner’s contention.
`
`Specifically, claim 1 is directed to securely transacting credit card
`
`purchases. The method includes a custodial authorizing entity that provides
`a transaction code in order to facilitate a transaction between a customer and
`a merchant. We determine that a claim for “transacting credit card
`purchases” that includes a custodial authorizing entity to facilitate a
`transaction between a customer and merchant is expressly financial in
`nature. Accordingly, we determine that the ’988 patent is a ‘covered
`business method patent’ under § 18(d)(1) of the AIA.
`
`Claim Construction
`B.
`In a covered business method patent review, a claim in an unexpired
`
`patent shall be given its broadest reasonable construction in light of the
`specification of the patent in which it appears. 37 C.F.R. § 42.300(b).
`Under the broadest reasonable construction standard, 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). Any special
`definition for a claim term must be set forth in the specification with
`reasonable clarity, deliberateness, and precision. In re Paulsen, 30 F.3d
`1475, 1480 (Fed. Cir. 1994). Reading a particular embodiment appearing in
`the written description into a claim is generally improper when the claim
`7
`
`MasterCard, Exh. 1014, p. 7
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`language is broader than the embodiment. In re Van Geuns, 988 F.2d 1181,
`1184 (Fed. Cir. 1993).
`“a number of transactions”
`1.
`Independent claim 1 recites “limiting a number of transactions,” and
`independent claims 17, 19, 21, and 22 recite a similar limitation. Petitioner,
`based on the Grimes declaration, proposes that the limitation “a number of
`transactions” means “any number of transactions, including zero
`transactions, one transaction, or a plurality of transactions.” Pet. 13-14
`(citing Ex. 1008, ¶ 25). The Grimes declaration bases this construction on
`the ’988 patent disclosure of designating a maximum amount that can be
`spent utilizing a particular transaction code within a predetermined period of
`time. Ex. 1008, ¶ 25 (citing Ex. 1001, col.8, ll. 27-34). Patent Owner does
`not propose a construction for this limitation.
`Although we agree with Petitioner that “a number of transactions”
`means one or more transactions, we do not agree that this limitation includes
`zero transactions or even an infinite number of transactions, as Petitioner
`argues in support of the indefiniteness challenge below. Pet. 78-79.
`Construing this limitation to include zero transactions ignores the preceding
`word in the phrase “limiting a number of transactions,” which implies the
`occurrence of at least one transaction, instead of the absence of a transaction.
`Similarly, construing this limitation to include an infinite number also
`ignores the preceding term “limiting” because infinite requires the absence
`of a limit. Accordingly, “a number of transactions” means one or more
`transactions, where the number of transactions is limited to a finite number.
`
`8
`
`MasterCard, Exh. 1014, p. 8
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`“one or more merchants”
`2.
`Independent claim 1 recites “limiting a number of transactions to one
`or more merchants,” and independent claims 17, 19, 21, and 22 recite a
`similar limitation. Petitioner proposes, based on the Grimes declaration, that
`“one or more merchants” means “one merchant up to any plurality of
`merchants,” including “all merchants in the world,” and including “no limit”
`on the number of merchants. Pet. 13, 77-78 (citing Ex. 1008, ¶ 24). Patent
`Owner proposes this limitation to mean “a certain quantity of merchants that
`is finite in number.” Prelim. Resp. 7.
`We agree with Patent Owner that interpreting “one or more
`merchants” to include an infinite number of merchants is overly broad and
`unreasonable. Claim 1 recites “performing secure credit card purchases.” It
`also recites “said one or more merchants limitation being included in said
`payment category,” and “authoriz[ing] payment required to complete the
`purchase.” These steps imply a reasonable, finite number of merchants to
`authorize payment and perform a purchase. It is unreasonable to understand
`this limitation to mean an infinite number of merchants can be included in
`said payment category. Accordingly, on this record, “one or more
`merchants” means “one merchant up to a plurality of merchants, where the
`number of merchants is a finite number.”
`C. Unpatentability under 35 U.S.C. § 112, second paragraph
`Petitioner contends that claims 1-20, 22, and 31-38 of the ’988 patent
`are unpatentable under 35 U.S.C. § 112, second paragraph, as being
`indefinite. Independent claims 1, 17, 19, and 22 recite “limiting the number
`
`9
`
`MasterCard, Exh. 1014, p. 9
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`of transactions to one or more merchants.” Petitioner argues that this
`limitation does not appear in the written description, is not identified in any
`figure of the ’988 patent, and is not clarified or limited further by the
`dependent claims. Therefore, according to Petitioner, “limiting . . . to one or
`more merchants” encompasses an infinite number of merchants. Pet. 77-78
`(citing Ex. 1008, ¶ 64). Petitioner argues that a person having ordinary skill
`in the art would have no way of determining whether they were practicing
`“limiting . . . to one or more merchants,” because this limitation
`encompasses situations where there is no limit on the number of merchants
`with which a transaction occurs. Id.
`Patent Owner argues that this limitation is “definite because one of
`ordinary skill in the art would understand the term to require some limit on
`the number of merchants that purchases could be made using the transaction
`code.” Prelim. Resp. 31-32.
`We agree with Patent Owner. As discussed above in our claim
`construction, construing “one or more merchants” to encompass an infinite
`number of merchants is unreasonable. As also discussed above, claim 1
`requires various steps, including providing authorization to complete a
`purchase. A person with ordinary skill in the art would understand “limiting
`. . . to one or more merchants” broadly imposes some type of reasonable
`limitation as to the number of merchants in order to provide the necessary
`authorization to complete a purchase and perform other claim steps. Even
`assuming, in arguendo, that “limiting . . . to one or more merchants”
`includes a relatively large number of merchants, such a construction is
`
`10
`
`MasterCard, Exh. 1014, p. 10
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`merely broad and not indefinite. In re Gardner, 427 F.2d 786, 788 (CCPA
`1970) (“Breadth is not indefiniteness.”). Accordingly, we do not agree with
`Petitioner that this limitation is indefinite.
`Petitioner further notes that independent claim 1 recites “limiting a
`number of transactions” to one or more merchants, and independent claims
`17, 19, and 22 recite similar limitations. Petitioner asserts that this limitation
`is indefinite because it includes both zero transactions and an infinite
`number of transactions. Pet. 78-79 (citing Ex. 1008, ¶ 67).
`Patent Owner argues that Petitioner’s construction of “limiting a
`number of transactions” to include zero and infinite transactions is
`unreasonable and overly broad. Prelim. Resp. 32-33. We agree with Patent
`Owner. Specifically, based on the discussion above in the claim
`construction section, we agree that a person with ordinary skill in the art
`would understand the limitation “limiting a number of transactions” to
`include at least one transaction, and, therefore, construing this limitation to
`encompass zero transactions is unreasonable. We further agree that a person
`with ordinary skill in the art would understand that, while this limitation is
`broad, this limitation requires some limitation on the number of transactions,
`and, therefore, construing this limitation to encompass an infinite or limitless
`number of transactions is also unreasonable.
`Accordingly, we are not persuaded that Petitioners will more likely
`than not prevail in demonstrating that claims 1-20, 22, and 31-38 are
`unpatentable as being indefinite under 35 U.S.C. § 112, second paragraph.
`
`11
`
`MasterCard, Exh. 1014, p. 11
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`D. Unpatentability under 35 U.S.C. §§ 102 and 103
`Petitioner contends that claims 1-10, 15-25, 27-33, and 35-38 of the
`’988 patent are unpatentable under 35 U.S.C. § 102(e) as anticipated by
`Cohen or Flitcroft, and claims 11-14, 26, and 34 are unpatentable under 35
`U.S.C. § 103 as obvious over Cohen or Flitcroft, and Musmanno. Pet. 14-
`76.
`
`1.
`
`Section 18(a)(1)(C) of the AIA
`
`Under section 18(a)(1)(C) of the AIA, a petitioner in a transitional
`proceeding who challenges the validity of one or more claims in a covered
`business method patent on grounds of unpatentability raised under §§ 102
`and 103 may only support such grounds on the following basis:
`(i) prior art that is described by section 102(a) of such
`title (as in effect on the day before such effective date); or
`(ii) prior art that—
`(I) discloses the invention more than 1 year before the
`date of the application for patent in the United States; and
`(II) would be described by section 102(a) of such title (as
`in effect on the day before the effective date set forth in section
`3(n)(1)) if the disclosure has been made by another before the
`invention thereof by the applicant for patent.
`
`AIA Section 18(a)(1)(C).
`
`Priority
`2.
`The ’988 patent was filed on October 12, 2010 and issued on October
`11, 2011. Ex. 1001. The ’988 patent is a continuation of application
`11/252,009, filed on October 17, 2005, which is now U.S. Patent No.
`7,840,486. Id. That application is a continuation of application 10/037,007,
`12
`
`MasterCard, Exh. 1014, p. 12
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`filed on November 9, 2001, which is a continuation-in-part of application
`09/231,745, filed on January 15, 1999, which is now U.S. Patent No.
`6,324,526. Id.
`Cohen was filed on March 30, 1999 and issued on July 23, 2002. Ex.
`1004. Cohen claims priority to Provisional Application No. 60/079,884,
`filed on March 30, 1998. Id.
`Flitcroft was filed on January 22, 1999 and issued on October 21,
`2003. Ex. 1005. Flitcroft claims priority to Provisional Application No.
`60/099,014, filed on September 9, 1998; Provisional Application No.
`60/098,175, filed on August 26, 1998; and Provisional Application No.
`60/092,500, filed on July 13, 1998. Id.
`3.
`Analysis
`Petitioner submits that Cohen and Flitcroft qualify as § 102(e) prior
`art references, assuming that the ’988 patent receives the benefit of the
`earliest filing date, January 15, 1999. Pet. 14, 45. Although Cohen and
`Flitcroft were filed prior to the effective filing date of the ’988 patent,
`neither Cohen nor Flitcroft was published prior to the effective filing date of
`the ’988 patent. As such, we agree with Petitioner that both Cohen and
`Flitcroft only qualify as § 102(e) references. Accordingly, neither Cohen
`nor Flitcroft qualifies as prior art, for a covered business method review,
`under Section 18(a)(1)(C) of the AIA.
`Petitioner does not direct us to any further evidence to demonstrate
`that Cohen and Flitcroft qualify as prior art under Section 18(a)(1)(C) of the
`AIA. Instead, Petitioner argues that the Board previously has instituted a
`
`13
`
`MasterCard, Exh. 1014, p. 13
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`covered business method patent review on the basis of a reference that
`qualifies under § 102(e). Pet. 14, n. 4 (citing CBM2013-00008, paper 20,
`20-21, 35). Nonetheless, Section 18(a)(1)(C) of the AIA governs what
`qualifies as prior art in this proceeding, and in that earlier Board proceeding,
`the Board issued a clarifying order, effectively amending the decision to
`institute and withdrawing the previously instituted ground based on the
`§ 102(e) reference, reasoning that the reference does not qualify as prior art
`in CBM proceedings under Section 18(a)(1)(C) of the AIA. See CBM2013-
`00008, paper 24, 2-3.
`Because Petitioner has not demonstrated that Cohen or Flitcroft
`qualifies as prior art under Section 18(a)(1)(C) of the AIA, we are not
`persuaded that Petitioner demonstrates that it is more likely than not that
`claims 1-10, 15-25, 27-33, and 35-38 are unpatentable as being anticipated
`by Cohen or Flitcroft. We similarly are not persuaded that Petitioner
`demonstrates that it is more likely than not that claims 11-14, 26, and 34 are
`unpatentable as being obvious over Cohen or Flitcroft, and Musmanno.
`
`CONCLUSION
`III.
`For the foregoing reasons, we determine that the information
`presented in the petition does not establish that it is more likely than not that
`claims 1-38 of the ’988 patent are unpatentable and, accordingly, decline to
`institute a covered business method patent review of the ’988 patent.
`
`ORDER
`IV.
`For the foregoing reasons, it is
`
`14
`
`MasterCard, Exh. 1014, p. 14
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`ORDERED that the petition is denied as to all challenged claims of
`the ’988 patent.
`
`
`
`
`15
`
`MasterCard, Exh. 1014, p. 15
`
`
`
`Case CBM2013-00057
`Patent 8,036,988
`
`
`
`
`PETITIONER:
`
`Robert Scheinfeld
`Eliot Williams
`BAKER BOTTS LLP
`robert.scheinfeld@bakerbotts.com
`eliot.williams@bakerbotts.com
`
`PATENT OWNER:
`
`Stephen Lewellyn
`Britney Maxey
`MAXEY LAW OFFICES, PLLC
`s.lewellyn@maxeyiplaw.com
`b.maxey@maxeyiplaw.com
`
`16
`
`MasterCard, Exh. 1014, p. 16
`
`
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