UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FIRST DATA CORPORATION
`
`Petitioner
`
`V.
`
`CARDSOFT INTERNATIONAL PTY LIMITED
`
`Patent Owner
`
`US. Patent No. 6,934,945
`
`Filing Date: October 22, 1999
`
`Issue Date: August 23, 2005
`
`Title: METHOD AND APPARATUS FOR
`
`CONTROLLING COMMWICATIONS
`
`Inter Partes Review No. IPR2014—007I 5
`
`
`
`CORRECTED PETITION FOR INTER PAR TES REVIEW
`
`UNDER 35 U.S.C. §§ 311—319 AND 37 C.F.R. § 42.100 ETSEQ.
`
`

`

`TABLE OF CONTENTS
`
`I.
`
`Introduction ............................................_ ..................................................... — l -
`
`II. Mandatory Notices ...................................................................................... — l -
`
`Real Party in Interest ........................................................................ - l -
`
`B.
`
`Related Matters ................................................................................. — 5 -
`
`C.
`
`D.
`
`E.
`
`Payment of Fees ............................................................................... — 6 —
`
`Designation of Lead Counsel and Request for Authorization ......... - 6 —
`
`Service Information .......................................................................... — 6 -
`
`F.
`
`Power of Attorney ............................................................................ — 7 -
`
`G.
`
`Standing ............................................................................................ — 7 —
`
`III.
`
`Statement of Precise Relief Requested ....................................................... — 7 —
`
`IV.
`
`Full Statement of Reasons for the Relief Requested .................................. — 7 -
`
`The Cardsoft ‘945 Patent .................................................................. — 8 —
`
`B.
`
`The Cardsoft ‘945 Patent Prosecution History ................................. — 9 —
`
`C.
`
`The Prior Art ..................................................................................... — 9 -
`
`D.
`
`Person of Ordinary Skill in the Art ................................................ — ll —
`
`E.
`
`Broadest Reasonable Construction ................................................. - ll -
`
`1.
`
`Means Plus Function Claims ................................................ — 14 —
`
`Ground 1: Claims 1- 17 are anticipated by EMV ‘96 .................... — 15 —
`
`G.
`
`Ground 2: Claims 1-17 are obvious over EMV ’96 in view of
`
`OMNI 300 ....................................................................................... — l7 -
`
`H.
`
`Ground 3: Claims 1-17 are obvious over EMV ’96 in view of
`
`OTA, OMNI 300 and First Data ‘879 Patent. ................................ — 18 —
`
`V.
`
`CONCLUSION ......................................................................................... - 51 -
`
`i
`
`

`

`EXHIBIT LIST
`
`Exhibit No.
`
`1001
`
`1002
`
`Description, i
`,
`Ogilvy US. Patent No. 6,934,945 (the “Cardsoft ‘945 Patent,”)
`
`EMV ’96, Integrated Circuit Card Terminal Specification for
`
`Payment Systems, Version 3.0, June 30, 1996 (EMV ’96) 102(b)
`
`prior art
`
`I
`
`1003
`
`EUROPAY, MASTERCARD AND VISA COMPLETE FINAL
`
`PHASE OF GLOBAL CHIP CARD SPECIFICATIONS - EMV
`
`'96 Ready for release — Waterloo/New York/San Francisco, 16
`
`July, 1996
`
`1004
`
`OMNI 300 Series Terminal, Programmer’s Manual, Volume 1
`
`and Volume 2 (“OMNI 300”), 102(b) prior art)
`
`1005
`
`Custy US Pat. No. 5,774,879, assigned to First Data (“First Data
`
`‘879 Patent”) 102(e) prior art
`
`1006
`
`Cardsoft (Assignment for the Benefit of Creditors) V. First Data
`
`Corporation Proof of Service
`
`1007
`
`1008
`
`Complaint for Patent Infringement Against First Data Corporation
`
`Claim Construction Order in Cardsoft, Inc., et a1. IV. VeriFone
`
`Holdings, Inc., et al., case no. 2:08-CV—98—CE
`
`ii
`
`

`

`1009
`
`1010
`
`Declaration of Stephen Gray.
`
`Europay Open Terminal Architecture — A Forth—based Token
`
`System for Payment Terminals (“OTA”) 102(b) prior art
`
`1011
`
`Agreement between VeriFone and First Data re Indemnity.
`
`1012
`
`Articles re sales of OMNI 300 series terminals.
`
`1013
`
`Declaration of Lawrence Forsley re public availability of OTA.
`
`iii
`
`

`

`I.
`
`Introduction
`
`Through counsel, real party in interest First Data Corporation (“Petitioner”) hereby
`
`petitions for initiation of inter partes review of US. Patent No. 6,934,945, entitled
`
`“Method and Apparatus for Controlling Communications” (the “Cardsoft ‘945
`
`Patent”). Ex. 1001. The Cardsoft ‘945 Patth issued on August 23, 2005 more
`
`than nine months prior to the filing of this petition. The Cardsoft ‘945 Patent is
`
`currently asserted in a co—pending litigation, and this petition is being filed within
`
`one year of Petitioner being served with complaint for patent infringement. See
`
`Exs. 1006 and 1007 (Complaint and Certificate of Service). Thus, the Cardsoft
`
`‘945 Patent is eligible for inter partes review.
`
`II. Mandatory Notices
`
`A.
`
`Real Party in Interest
`
`The real party in interest is First Data Corporation, which is a limited liability
`
`company duly organized and existing under the laws of the state of Delaware with
`
`a principal place of business at 5565 Glenridge Connector, NE, Suite 2000,
`
`Atlanta, Georgia 30342. We believe that VeriFone is NOT a real party in interest.
`
`VeriFone, per an indemnity with First Data, is providing the funding for this
`
`petition. However, the sole and exclusive control over this petition rests entirely
`
`with First Data. To the extent that the VeriFone indemnity agreement provided for
`
`any ability to assume control of any litigation, VeriF one has disclaimed any right
`
`-1-
`
`

`

`to such control (see EX. 1011). First Data determined which counsel to use, and is
`
`using its normal patent counsel for this petition, not counsel for VeriFone. The
`
`prior art used in this petition was discovered from the Cardsoft V. VeriFone
`
`litigation records, but First Data decided which references to use. Copies of some
`
`prior art were obtained from VeriFone, and VeriFone counsel indicated certain
`
`references which it believed rendered the subject patent invalid, but First Data
`
`counsel exercised independent judgment in determining which prior art to use and
`
`in fact selected different prior art references than those which VeriFone believed
`
`were the strongest.
`
`It should be noted that First Data was sued after Cardsoft obtained a jury verdict
`
`victory against VeriFone. Instead of suing VeriFone for willful infringement for
`
`post-verdict sales, Cardsoft elected to sue First Data, likely with knowledge of the
`
`indemnity which provides indemnification for some although not all of the
`
`accused devices. It would be contrary to the reasons for establishing Inter Partes
`
`Reviews to deny First Data the opportunity for an IPR challenge in such a
`
`situation.
`
`

`

`In re Guan listed 4 factors for determining whether an entity is the real
`
`party-in—interest in inter partes review.1 In re Guan involved a company named
`
`“Troll Busters” that advertised itself as a strawman for Patent Office challenges.
`
`The Patent Office has declined to adopt In re Guan as controlling. The USPTO
`
`has stated that the degree of control exercised by a non—party over a party’s
`
`participation in the proceeding is a “common consideration.” 2 Chief Judge
`
`James Donald Smith of the BPAI explained that the Proposed Rules from
`
`February of 2012 deliberately declined to promulgate particular factors as the
`
`future Patent Trial and Appeal Board (PTAB) intends to consider each case on
`
`its specific facts. 3
`
`1 See In re Guan Inter Partes Reexamination Proceeding, Control No.
`
`95/001,045, “Decision Vacating File Date,” (Aug. 25, 2008)
`
`2 Practice Guide for Proposed Trial Rules, 77 Fed. Reg. 6868, 6870
`
`(February 9, 2012) (citing Taylor v. Sturgell, 553 US. 880, 895 (2008))
`
`3 Explanation of Real Party in Interest Requirement provided by Chief Judge
`
`James Donald Smith, Board of Patent and Appeals and interferences (“BPAI”).
`
`Available at http://www.uspto.gov/aiafiimplementation/smith-blog—
`
`extravaganza.j sp#heading—2
`
`

`

`In the In re Schlecht Inter Partes Reexamination Proceeding, Control No.
`
`95/001,206, also cited by the USPTO’s Proposed Rules, the Patent Owner cited
`
`the lSt and 3rd factors of In re Guan. The 3rd factor is quoted above, and the lSt
`
`factor is: “1. Accept payment from another group, pay the requester to file the
`
`request for inter partes reexamination and have itself named solely as the real
`
`party in interest.” The Patent Owner argued that “if a joint defense group
`
`allocates fee payments, work load, etc., between defendants, especially by using
`
`a single law firm, then it runs afoul of the first test. If a joint defense group
`
`prepares a common pool of prior art, but then provides that information to
`
`another entity .
`.
`. this violates the third test.” 4 The USPTO rejected the
`argument, and declined to expand the test to anything broader than the
`
`circumstances of In re Guan.
`
`In Syntroleum Corp. v. Neste Oil Oyj (IPR2013-00178), the Board held that two
`
`other corporations, who were named as co-defendants in concurrent litigation
`
`brought by Patent Owner, were not real parties-in—interest, despite the fact that two
`
`of those corporations formed the third as a joint venture, shared counsel, and an
`
`indemnification agreement among the parties existed. “Whether a party that is not
`
`4 In re Schlecht Inter Partes Reexamination Proceeding, Control No.
`
`95/001,206, Petition at 6—7, ( June 10, 2010).
`
`-4-
`
`

`

`named in an inter partes review proceeding is a ‘real party-in—interest’ or ‘privy’ is
`
`a ‘highly fact—dependent question,’ taking into account various factors such as
`
`whether the non—party ‘exercised or could have exercised control over a party’s
`
`participation in a proceeding’ and the degree to which a non—party funds, directs,
`
`and controls the proceeding”), Order at 6, citing, Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. 48756, 48759—60.
`
`In Atlanta Gas Light Company V. Bennett Regulator Guards Inc., (IPR2013-00453)
`
`the PTAB held the existence of a contract/indemnification clause does not create
`
`privity. In essence, the PTAB held that the indemnity obligation did not arise until
`
`the petitioner was served, which was within the 1 year period.
`
`In Hewlett-Packard Co. v. MCM Portfolio, LLC, IPR2013-00217, the PTAB held
`
`that a distribution agreement was not enough to establish control, and thus privity.
`
`B.
`
`Related Matters
`
`The Cardsoft ‘945 Patent is the subject of the following civil actions:
`
`Cardsoft (Assignmentfor the Benefit of Creditors) LLC v. First Data Corporation,
`
`First Data Merchant Services Corporation, and Tasq Technology, Inc. Civil
`
`Action No. 2: l3-cv—29O (Eastern District of Texas, Marshall Division)
`
`Cardsoft, Inc. and Cardsoft (Assignmentfor the Benefit of Creditors) LLC v.
`
`VeriFone Systems, Inc. ,' VeriFone Inc. ; Hypercom Corporation; Ignenico SA;
`
`-5-
`
`

`

`Ingenico Corp. ; Ingenico Inc. ; Way Systems, Inc. ,' Shera International Ltd; and
`
`Blue Bamboo (USA), Inc., Civil Action No. 2:08—cv—00098 (Eastern District of
`
`Texas, Marshall Division).
`
`C.
`
`Payment of Fees
`
`This petition for interpartes review is accompanied by a payment of $23,000 and
`
`requests review of 1—17 claims of the Cardsoft ‘945 Patent. 37 CPR. § 42.15.
`
`Thus, this petition meets the fee requirements under 35 U.S.C. § 312(a)(l).
`
`D.
`
`Designation of Lead Counsel and Request for Authorization
`
`
`
`Lead Counsel
`Paul C. Haughey
`Reg. No. 31,836
`phaughengkilpatricktownsend.com
`Kilpatrick Townsend & Stockton LLP
`Two Embarcadero Center, Suite 8000
`
`Backup Lead Counsel
`Darin J. Gibby
`Registration No. 38,464
`dgibby@,kilpatricktownsend.com
`Kilpatrick Townsend & Stockton LLP
`1400 Wewatta Street, Suite 600
`
`Denver , CO 80202
`San Francisco, CA 94111
`
`(415) 576-0200 (303) 571—4000
`
`E.
`
`Service Information
`
`As identified in the attached Certificate of Service, a copy of the present petition,
`
`in its entirety, is being served to the address of the attorney or agent of record in
`
`the Patent Office as well as counsel of record for the Patent Owner in the above—
`
`referenced litigations. Petitioners may be served at their counsel, Kilpatrick
`
`Townsend & Stockton LLP.
`
`

`

`F.
`
`Power of Attorney
`
`Powers of attorney are being filed with the designation of counsel in accordance
`
`with 37 C.F.R. § 42.10(b).
`
`G.
`
`Standing
`
`The Petitioners certify that the Cardsoft ‘945 Patent is available for inter partes
`
`review and that the Petitioners are not barred or estopped from requesting an inter
`
`partes review challenging the patent claims on the grounds identified in this
`
`petition. The Cardsoft ‘945 Patent has not been subject to a previous estoppel
`
`based proceeding of the AIA and the complaints served on Petitioners were served
`
`v within the last twelve months, on May 2, 2013 (See EX. 1006).
`
`III.
`
`Statement of Precise Relief Requested
`
`Pursuant to 35 U.S.C. § 311, this petition requests cancellation of claims 1—17 of
`
`the Cardsoft ‘945 Patent in accordance with one or more of the following grounds,
`
`as indicated in the discussion below.
`
`Ground 1. Claims 1—17 are anticipated by EMV ‘96
`
`Ground 2. Claims 1—17 are obvious over EMV ’96 in view of OMNI 300.
`
`Ground 3. Claims 1—17 are obvious over EMV ’96 in view of OTA, OMNI 300
`
`and the First Data ‘879 Patent.
`
`IV.
`
`Full Statement of Reasons for the Relief Requested
`
`_ 7 _
`
`

`

`A.
`
`The Cardsoft ‘945 Patent
`
`The Cardsoft ‘945 Patent is directed to “preparing and processing information to
`
`be communicated via a networ ” using a “virtual machine” (see Abstract). The
`
`main embodiment discussed is a POS device for payment transactions using credit
`
`cards. The patent describes the “virtual machine” as containing 2 separate virtual
`
`processors, (1) a “virtual function processor” for controlling operation of the
`
`device, including calling (2) a “virtual message processor” to carry out “message
`
`handling tasks.” The message handling tasks include such things as receiving the
`
`input card number, PIN, etc. and transmitting them to a remote financial institution
`
`for authorization. However, these message handling tasks themselves were done in
`
`prior art terminals, which admittedly handled the same messages.
`
`However, the dual Virtual processor language is simply colorful language for a
`
`common technique in computer operating systems of having different modules or
`
`subroutines for different tasks. There are many examples of this in the prior art,
`
`but because only a few grounds are possible in an IPR, only a few examples are
`
`given.
`
`The Cardsoft ‘945 Patent also describes the “virtual machine” as being emulatable
`
`on different hardware platforms. However, this is admitted prior art, unless done
`
`in “native code,” which is not required in the independent claims as discussed
`
`under claim construction below. “The technique of creating a virtual processor (or
`
`-8-
`
`

`

`in this caseimicroprocessor) is well known and referred to as an interpreter”
`
`(Cardsoft ‘945 Patent, col. 3, ll 34-36). Since “emulatable” logically simply means
`
`the code can be rewritten to run on a different machine, any code would satisfy
`
`this. “A virtual machine is computer programmed to emulate a hypothetical
`
`computer. Different incompatible computers may be programmed to emulate the
`
`same hypothetical computer” (Cardsoft ‘945 Patent, col. 3, 11. 40—43).
`
`The claims are directed to various combinations of different modules being in
`
`native code (e.g., claim 3, protocol processor in native code; 5— message processor
`
`in native code; 6 — function processor in native code). These are all shown by prior
`
`art where all modules are in native code.
`
`I B.
`
`The Cardsoft ‘945 Patent Prosecution History
`
`The Cardsoft ‘945 Patent was allowed after arguments and amendments
`
`distinguishing a Sun Microsystems patent, Stern Pat. 5,935,249, which was
`
`directed to “. . .a method and apparatus for securely controlling a local network
`
`device from a network, and providing network services to a host computer without
`
`requiring a network connection” (Summary, lSt sentence). “In one particular
`
`embodiment of the present invention, the secure language processor is
`
`implemented within a JavaTM language interpreter ...” (Summary, 2nd 1D
`
`C.
`
`The Prior Art
`
`

`

`l. EMV ’96, Integrated Circuit Card Terminal Specification for Payment
`
`Systems, Version 3.0, June 30, 1996 (EMV ’96) 102(b) prior art, EX. 1002. This
`
`is a specification by EMV (Europay, MasterCard & Visa) for terminals that accept
`
`integrated circuit cards (smart cards with chips, as opposed to mag stripe cards). It
`
`describes a virtual machine instruction set to allow terminals to emulate a virtual
`
`machine. It was a publication, and publicly available, as evidenced by Ex. 1003.
`
`2. OMNI 300 Series Terminal, Programmer’s Manual, Volume 1 and
`
`Volume 2 (“OMNI 300” ), 102(b) prior art, EX. 1004. This manual was provided
`
`with the 300 series terminals and includes description of the message assembling,
`
`disassembling and comparison functions. It was a publication, and publicly
`
`available, since it was shipped with the 300 series of terminals, as indicted on p. 2
`
`of Ex. 1004 , which indicates “included in software package.” The sales of such
`
`terminals, which included the manuals, is evidenced by the articles of EX. 1012.
`
`3. Custy US Pat. No. 5,774,879, assigned to First Data (“First Data ‘879
`
`Patent”) 102(e) prior art, Ex. 1001. This is a patent of the Petitioner that describes
`
`dividing the software for a terminal into a virtual execution control processor (the
`
`claimed function processor) and a virtual communication processor (the claimed
`
`message processor).
`
`-10-
`
`

`

`4. Europay Open Terminal Architecture — A Forth—based Token System for
`
`Payment Terminals 1“OTA”) 102(b) prior art, Ex. 1010. This 1996 paper was
`
`presented at the June 19—22, 1996 Rochester Forth Conference — Open Systems, in
`
`Toronto Canada. It describes prototypes exhibited and used for 4060 transactions
`
`at a Europay Members meeting in Seville, Spain June 5—7, 1996 (see Ex. 1010, p.
`
`29). The paper describes a “virtual machine” with a “kernel” having functions that
`
`“can be run on any [POS] terminal” in “native code.” The functions include
`
`“message management” (the claimed virtual message processor). The Declaration
`
`of Lawrence Forsley (Ex. 1013) is proof of the publication of this paper.
`
`D.
`
`Person of Ordinary Skill in the Art
`
`One of ordinary skill in the art at time of the effective filing date of the patent ()
`
`would possess a degree in Management Information Systems, Computer Science,
`
`or Electrical Engineering, or equivalent professional system development
`
`experience, plus two years of work experience with payment systems and
`
`computer networking. See Gray Declaration pars. 23-28.
`
`E.
`
`Broadest Reasonable Construction
`
`Pursuant to 37 C.F.R. § 42.100(b),
`
`the claim terms subject to inter partes review
`
`shall receive the “broadest reasonable construction in light of the specification of
`
`the patent in which [they] appear[]” See also In re Swanson, No. 07-1534 (Fed.
`
`-11-
`
`

`

`Cir. 2008); Inre Trans Texas Holding Corp, 498 F.3d 1290, 1298 (Fed. Cir. 2007
`
`(citing In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984)).
`
`. In compliance
`
`with 37 C.F.R. § 1.42.104(b)(4), Petitioners state that in general the “claim terms
`
`are presumed to take on their ordinary and customary meaning.” See Changes to
`
`Implement Inter Partes Review Proceedings, Post—Grant Review Proceedings, and
`
`Transitional Program for Covered Business Method Patents, 77 Fed. Reg. 48699
`
`(2012), Response to Comment 35.
`
`Because the standards of claim interpretation used by the Courts in patent litigation
`
`are different, Petitioner expressly reserves the right to present other interpretations
`
`at a later time in the district court litigation.
`
`All claim terms not specifically addressed below have been accorded their broadest
`
`reasonable interpretation in light of the patent specification including their plain
`
`and ordinary meaning to the extent such a meaning could be determined by a
`
`skilled artisan.
`
`Attached as Ex. 1008 is the claim construction order from Cardsoft v. VeriFone.
`
`Except as noted below, we propose to adopt those constructions.
`
`“virtual function processor,” per the court order, means “software which controls
`
`and/or selects general operations ofa communication device.”
`
`-12-
`
`

`

`“function processor instructions,” per the court order, means “a set of
`
`instructions that control operation of the communications device.”
`
`“Virtual message processor,” was construed by the court to mean “software
`
`implemented in the native code of the communications device that processes
`
`messages, including assembling, disassembling and/or comparing messages, for
`
`communication to and/orfrom a communications device.” We propose that the
`
`words “implementation in the native code of the communication device” be
`
`eliminated from this construction. The term “native code” does not appear in
`
`claim 1 with this language, but does appear in dependent claim 5, which recites the
`
`native code of the processor. There would be no difference between the native
`
`code of the processor and native code of the device. The doctrine of claim
`
`differentiation would thus suggest that the claim 1 language is broader under the
`
`IPR standard of “broadest reasonable interpretation.”
`
`“emulatable in different computers having incompatible hardware or
`
`operating systems,” was construed by the court to mean “capable ofexecuting
`
`programs on difi’erent computers having incompatible hardware or operating
`
`systems. ”See ‘945 Patent at 3 :43-46 (“Any computer programmed to emulate the
`
`hypothetical computer will thus be capable of executing programs for the virtual
`
`computer. ”) We believe the term “emulatable” simply means that the code can be
`
`rewritten to run on otherwise incompatible hardware, and thus would cover any
`
`_ 13 _
`
`

`

`code under a broadest reasonable construction. The patent says the code is C in the
`
`preferred embodiment, which is simply a popular code that multiple application
`
`programs can run on.
`
`1.
`
`Means Plus Function Claims
`
`“virtual machine means,” was not construed by the court. It is in the
`
`preamble, and does not refer to a function, and thus we do not construe it as means
`
`plus function language.
`
`“protocol processor means” appears in claims 2, 4 & 17 apparently
`
`referencing the earlier recited “Virtual protocol processor” and thus does not appear
`
`to be a “means plus function” term.
`
`“protocol processor instruction means” was not construed by the court,
`
`only appears in claim 2 and is construed herein to mean instructions for the
`
`protocol processor. It is described as “arranged to provide directions for operation
`
`of the—protocol processor means.”
`
`“message instruction means,” was construed by the court as follows: (1)
`
`the function is “providing directions for operation of the virtual message
`
`processor;” and (2) the structure is “l3:29—14:2; 15:23—34; Figure 11 and Figure 8,
`
`and equivalents thereof.” This definition simply refers to message instructions.
`
`-14-
`
`

`

`“processing means,” in claim 12 (incorrectly referred to as “processor
`
`means” in dependent claim 13) has no described function, and thus does not
`
`appear to be a “means plus function” term, and should be interpreted to simply
`
`mean “processor.”
`
`F.
`
`Ground 1: Claims 1— 17 are anticipated by EMV ‘96
`
`The Cardsoft ‘945 Patent claim 1 sets forth a communications device with
`
`(1) Virtual function processor, (2) message instruction means, (3) virtual message
`
`processor, (4) emulatable. Element (2) is really part of (3) — the patent describes
`
`both the function and message processors having instructions that govern their
`
`operation, which is the case with any software: “The protocol instructions 106
`
`govern operation of the protocol processor 106. The message instructions 109
`
`provide directions for operation of the message processor 105” (Col. 10, 11. 42—45).
`
`As described in more detail in the discussion around the claim charts below,
`
`EMV ’96 has all these elements. EMV ’96 describes a “virtual machine” with a
`
`“theoretical microprocessor” (virtual function processor). EMV ’96 describes
`
`message handling (message instruction means) and providing software “modules”
`
`or “subroutines” (virtual message processor). Finally, it describes “Virtual
`
`machine emulation.”
`
`-15-
`
`

`

`Again, it should be noted that the Cardsoft ‘945 Patent describes handling
`
`the same messages as prior art POS machines, which would necessarily require
`
`message assembly, disassembly and comparison with the required formats (for
`
`error detection, etc.). EMV ’96 and other prior art use different language for such
`
`message handling steps, but it is clear that all such machines at the time of the
`
`alleged invention would do this.
`
`The dependent claims also do not add anything new. Claim 2 refers to a
`
`virtual protocol processor that makes sure messages conform to a protocol. Again,
`
`a virtual protocol processor is just a software module or subroutine. In this case, it
`
`is the part of the software that functions according to a relevant protocol for POS
`
`devices. There is no suggestion that protocols weren’t similarly followed in the
`
`prior art, and this is shown in the references as described below.
`
`Claims 3 and 4 are directed to the software being in the native code of the
`
`device, which is shown in EMV ’96 and the other prior art as discussed below.
`
`Claims 5 & 6 say the message processor and function processor, respectively, are
`
`in native code. Claims 7 & 8 say the message processor instructions and function
`
`processor instructions, respectively, are NOT in native code. As described above,
`
`any software module is composed of instructions, so these claims are simply
`
`describing different particular software modules being in native code. As shown
`
`below, EMV ’96 and other indicated references show native code, and if all of the
`
`~16-
`
`

`

`software is in native code, then each of the modules is in native code. It would
`
`also be obvious to have just certain modules in native code, as that would simply
`
`be a matter of design choice by one of skill in the art.
`
`Claim 9 is directed to a hardware abstraction layer with APIs, which is an
`
`implementation detail well known in the art prior to the priority date.
`
`Claim 10 is directed to the device being a network access device, and claim
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`11 says the network access device is a POS. Since the Cardsoft ‘945 Patent says a
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`network access device includes a POS, and since a P08 is admitted prior art, and
`
`shown in the references, there is nothing new.
`
`Claims 12 and 14 are independent method and computer memory claims
`
`similar to device claim 1, and are shown by the prior art for the same reasons.
`
`Dependent claim 13 simply describes loading the virtual protocol processor, and
`
`obviously any software needs to be loaded. Dependent claims 15—17 are
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`duplicative of other dependent claims previously discussed, as indicated in the
`
`claim chart below.
`
`G.
`
`Ground 2: Claims 1—17 are obvious over EMV ’96 in View of
`
`OMNI 300.
`
`OMNI 300 describes software for mag stripe POS terminals using
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`VeriFone’s TXO operating system with source code in the standard C language.
`
`-17-
`
`

`

`EMV ’96 provides standards for terminals reading integrated circuit cards (ICCs).
`
`EMV ’96 basically describes desired upgrades for mag stripe terminals, such as the
`
`OMNI 300 series, to support ICC cards. EMV ’96 states “This specification
`
`provides the requirements necessary to support the implementation of ICCs. These
`
`, requirements are in addition to those already defined by individual payment
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`systems and acquirers for terminals that accept magnetic stripe cards.” (p. vii).
`
`Both EMV ‘96 and OMNI 300 are directed to P08 devices and one of skill in the
`
`art looking at updating the OMNI 300 in 1996 would want to make sure it
`
`complied with EMV ’96, the de facto industry standard. See Stephen Gray
`
`Declaration, Ex. 1009, par. 49.
`
`As described in Ground 1, EMV ’96 shows all the elements of claim 1.
`
`OMNI 300 shows details of message assembly, disassembly and comparison,
`
`providing further detail on those elements of the Virtual message processor. The
`
`combination would provide the EMV ’96 virtual, emulatable machine with the
`
`details of the OMNI 300 for showing the message instruction means and virtual
`
`message processor elements. The elements of the dependent and other
`
`independent claims are similarly shown by these two references as described in the
`
`claim charts and accompanying discussion below.
`
`H.
`
`Ground 3: Claims 1—17 are obvious over EMV ’96 in View of
`
`OTA, OMNI 300 and First Data ‘879 Patent.
`
`—l8—
`
`

`

`It would be obvious to combine these references because all relate to P08
`
`terminals. In 1996, it would have been obvious to a person looking to improve
`
`EMV ’96 to incorporate aspects of OTA because both documents are directed to
`
`point of service (POS) terminals, both relate to ICC readers, and both relate to
`
`Europay terminals. The OTA title refers to Europay, the E in EMV ‘96.
`
`The First Data ‘879 Patent describes a virtual processor with virtual
`
`processor modules for a POS terminal, and thus would be obvious to combine with
`
`the virtual machines of EMV ’96 and OTA. Both deal with virtual processors for
`
`such devices. EMV ‘96 and the First Data ‘879 Patent disclose financial
`
`processing systems that are intended to be portable among various software and
`
`hardware platforms (see First Data “879 col. 2, lines 43—45), and thus are not just
`
`related POS subject matter, but are both directed to the same emulatable concept.
`
`The First Data ‘879 Patent would show one of skill in the art the division of the
`
`virtual machine into different modules, to provide a robust implementation of the
`
`EMV and OTA systems.
`
`The OMNI 300 would need to comply with the EMV and OTA industry
`
`standards as described under ground 2 above. OMNI 300 would provide one of
`
`skill in the art with the details of message processing that would need to be
`
`accomplished by a virtual machine as described in EMV and OTA, and to
`
`-19-
`
`

`

`implement a virtual communication processor as described in the First Data ‘879
`
`Patent. See Stephen Gray Declaration, Ex. 1009, par. 50.
`
`The First Data ‘879 Patent describes dividing the software for a terminal into a
`
`virtual execution control processor (the claimed function processor) and a virtual
`
`communication processor (the claimed message processor), thus providing more
`
`explicit detail on these elements in a combination.
`
`OTA shows the combination and interaction of elements of the above references in
`
`a concise manner, and thus enhances the description of the virtual, emulatable
`
`machine in EMV ‘96. OTA shows a communications device, a POS just like the
`
`embodiment in the Cardsoft ‘945 Patent. A “virtual machine” is described. It has
`
`3 instruction sets, or modules. The first is a “theoretical processor” which
`
`corresponds to the claimed “function processor” that “provides the instructions
`
`necessary for the efficient execution of programs. The second has “operating
`
`systems functions” which include “communications” (OTA, p. 75, last paragraph).
`
`One of skill in the art would recognize that such communications functions would
`
`include the claimed message handling tasks of assembling, disassembling and
`
`comparing messages, which are standard message tasks.
`
`OMNI 300 shows details of message assembly, disassembly and comparison,
`
`providing further detail on those elements of the virtual message processor.
`
`-20_
`
`

`

`Claim Charts
`
`Preamble. The preamble simply refers to admitted prior art. Further, EMV
`
`’96 —- Integrated Circuit Card Terminal Specification for Payment Systems (“EMV
`
`‘96”) and Europay Open Terminal Architecture — A Forth—based Token System for
`
`Payment Terminals (“OTA”) both refer to the use of a virtual machine being
`
`implemented.
`
`
`
`The ‘945 Patent
`
`1. A
`
`EMV ‘96
`
`_
`
`communication
`
`device which is
`
`arranged to process
`messages for
`communications,
`
`comprising a virtual
`machine means which
`
`includes
`
`
`
`
`
`A point-of—service terminal which communicates
`with a host via messages is presented: “This specification
`applies to all terminals operating in attended or unattended
`environments, having offline or online capabilities, and
`supporting transaction types such as purchase of goods,
`services, and cash. Terminals include but are not limited to
`automated teller machines (ATMs), branch terminals,
`cardholder—activated terminals, electronic cash registers,
`personal computers, and point of service (POS) terminals.
`EMV ’96, at p. vii, {(2.
`
`3’
`
`“An interpreter implementation defines a single
`software kernel, common across multiple terminal types.
`This kernel creates a virtual machine ....” Id., at §1.4.1,
`
`pp. II-3—Il—4.
`
`The ‘945 Patent — Admitted Prior Art
`
`“The technique of creating a virtual processor (or in
`this case microprocessor) is well known and referred to