UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FIRST DATA CORPORATION
`
`Petitioner
`
`V.
`
`CARDSOFT INTERNATIONAL PTY LIMITED
`
`Patent Owner
`
`U.S. Patent No. 7,302,683
`
`Filing Date: August 22, 2005
`
`Issue Date: November 27, 2007
`
`Title: METHOD AND APPARATUS FOR
`
`CONTROLLING COMMUNICATIONS
`
`Inter Partes Review No. Unassigned
`
`DECLARATION OF STEPHEN GRAY
`
`Petitioner First Data - Exhibit 1009 - Page 1
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FIRST DATA CORPORATION
`
`Petitioner
`
`V.
`
`CARDSOFT INTERNATIONAL PTY LIMITED
`
`Patent Owner
`
`U.S. Patent No. 7,302,683
`
`Filing Date: August 22, 2005
`
`Issue Date: November 27, 2007
`
`Title: METHOD AND APPARATUS FOR
`
`CONTROLLING COMMUNICATIONS
`
`Inter Partes Review No. Unassigned
`
`DECLARATION OF STEPHEN GRAY
`
`Petitioner First Data - Exhibit 1009 - Page 1
`
`
`
`Table of Contents
`
`I.
`
`II.
`
`INTRODUCTION ............................................................................................................. .. 1
`
`QUALIFICATIONS .......................................................................................................... ..2
`
`III.
`
`MATERIALS REVIEWED ............................................................................................... ..5
`
`IV.
`
`LEGAL STANDARDS ..................................................................................................... ..6
`
`V.
`
`PERSON OF ORDINARY SKILL IN THE ART ............................................................. ..7
`
`VI.
`
`OVERVIEW OF THE ‘683 PATENT ............................................................................... ..9
`
`VII.
`
`CLAIM CONSTRUCTION ............................................................................................. ..12
`
`VIII.
`
`PRIOR ART CONSIDERED .......................................................................................... ..18
`
`IX.
`
`APPLICATION OF THE PRIOR ART TO THE CLAIMS ........................................... ..19
`
`X.
`
`MOTIVATION TO COMBINE REFERENCES ............................................................ ..19
`
`XI.
`
`CONCLUSION ................................................................................................................ ..21
`
`i
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`Petitioner First Data - Exhibit 1009 - Page 2
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`
`
`I, Stephen Gray, declare as follows:
`
`I.
`
`INTRODUCTION
`
`1.
`
`I have been retained by First Data Corporation (“First Data” or
`
`“Petitioner”) as an independent expert consultant in this proceeding before the
`
`United States Patent and Trademark Office.
`
`2.
`
`3.
`
`I am being compensated at a rate of $405/hour for my work.
`
`My compensation is in no way contingent on the nature of my
`
`findings, the presentation of my findings in testimony, or the outcome of any
`
`proceeding.
`
`4.
`
`I understand that this proceeding involves U.S. Patent No. 7,302,683
`
`(“the ‘683 patent”). The application for the ‘683 patent was filed on August 22,
`
`2005, as U.S. Patent Application No. 11/207,771 (“the ’77l application”) a
`
`continuation of U.S. Application No. 09/381,143, filed on October 22, 1999, now
`
`Patent No. 6,934,945 claiming priority to a PCT filed March 16, 1998. The ’77l
`
`application issued as the ‘683 patent on November 27, 2007.
`
`5.
`
`I have been asked to consider whether certain references disclose or
`
`suggest the features recited in the claims of the ‘683 patent. My opinions are set
`
`forth below.
`
`Petitioner First Data - Exhibit 1009 - Page 3
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`
`
`II.
`
`QUALIFICATIONS
`
`6.
`
`I am an independent consultant. All of my opinions stated in this
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`declaration are based on my own personal knowledge and professional judgment.
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`In forming my opinions, I have relied on my knowledge and experience in
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`designing, developing, and deploying digital image processing systems, distributed
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`client/server systems, graphical user interfaces, and website platforms, and e-
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`commerce systems, and on the documents and information referenced in this
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`declaration.
`
`7.
`
`I am over 18 years of age and, if I am called upon to do so, I would be
`
`competent to testify as to the matters set forth herein.
`
`I have attached to this
`
`declaration a copy of my current curriculum vitae, which details my education and
`
`experience, and a list of all other cases during the previous four years in which I
`
`testified as an expert at trial or by deposition. The following provides an overview
`
`of some of my experience that is relevant to the matters set forth in this
`
`declaration.
`
`8.
`
`I graduated from California Polytechnic University in 1973 with a
`
`Bachelor’s Degree in Economics.
`
`9.
`
`Since the mid-1970s, I have designed, developed, and deployed
`
`distributed computing systems and products that operate in distributed computing
`
`environments, including image processing systems. As such, I have acquired
`
`2
`
`Petitioner First Data - Exhibit 1009 - Page 4
`
`
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`expertise and am an expert in the areas of distributed computing architecture and
`
`design, graphical user interfaces, website platforms, eCommerce systems, image
`
`processing systems, operating systems, local area and wide area networks, and
`
`various programming languages used in the development of those systems and
`
`products. I have been employed by or retained as a consultant, including acting as
`
`a litigation consultant, for numerous companies such as Burroughs, Filenet,
`
`Fujitsu, Marriott Corporation, MCI, Northern Telecom, Olivetti, TRW, and Xerox,
`
`as well as other companies.
`
`10. As a consultant to TRW Financial Systems (TFS) in the late 1980s
`
`and early 1990s, I worked on several projects that performed various aspects of
`
`image-assisted item processing. I worked on a joint project with TFS and IBM to
`
`develop a distributed remote item processing system using IBM components
`
`including Check Processing Control System (CPCS), High Performance
`
`Transaction Systems (HPTS), CIMS, and others. Also I led the design of a high
`
`performance, LAN-based image capture and statement printing subsystem using
`
`IBM system components including CPCS, Multiple Virtual Storage/Enterprise
`
`Systems Architecture (MVS/ESA) and DB2 relational database for TFS. Finally, I
`
`led the design of an image assisted, remittance processing system using IBM
`
`system components such as CPCS, MVS/ESA and Sybase relational database in a
`
`client/server architecture for TFS.
`
`Petitioner First Data - Exhibit 1009 - Page 5
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`
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`11.
`
`I have developed and presented numerous public and in-house courses
`
`in computer system technology, including courses relating to applications for IBM
`
`MVS, UNIX, Linux, IBM OS/2, Microsoft Windows, and related networking
`
`technologies.
`
`I have lectured on distributed image processing in numerous
`
`publicly offered training sessions oriented to engineers interested in maintaining
`
`their professional credentials with continuing education units.
`
`12. As my curriculum vitae shows, much of my career has been spent as a
`
`software development professional. As a software development professional, I
`
`have had numerous occasions to write, modify, analyze, and otherwise review
`
`bodies of source code. I have analyzed source code written in several variants of
`
`C, SQL, COBOL, RPG, variants of Basic, Java, Perl, several Assembler languages,
`
`and others. For example, as an individual contributor at Xerox during the mid-
`
`1980s to 1990, I evaluated the quality of source code from third party software
`
`providers for possible inclusion in the Xerox product line. Also, as another
`
`example, I evaluated the source code of several application software packages for
`
`completeness and maintainability for possible inclusion into the NTN product line
`
`in 2000-2001. During my early career, I spent time maintaining source code
`
`written by others. In each of these assignments, I analyzed the source code to
`
`identify the data structures, logical flow, algorithms and other aspects.
`
`Petitioner First Data - Exhibit 1009 - Page 6
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`
`
`13.
`
`In addition, on seVeral occasions, I haVe serVed as an expert witness
`
`where source code analysis was required to render an opinion. These matters
`
`include Autobytel V. Dealix; NetRatings V. Coremetrics, et al.; Ampex V. Kodak, et
`
`al.; AB Cellular V. City of Los Angeles; Oracle V. Mangosoft; Harrah’s Casino V.
`
`Station’s Casino; Autobytel V. Dealix; MediaTek V. Sanyo; MathWorks V. Comsol;
`
`and other matters still pending.
`
`14. Also, I haVe served as an expert witness Where operating system
`
`technology was an issue in the matter. These matters include SuperSpeed V. IBM;
`
`FedEx V. U.S.; MathWorks V. Comsol; Ametron-American Electronic Supply V.
`
`Entin, et al; BMC Software V. Peregrine Systems, Inc.; and ADV Freeman V.
`
`Boole & Babbage.
`
`15.
`
`I was retained as an expert witness by US Bank in the DataTreasury V.
`
`Wells Fargo et al. litigation and testified during that litigation.
`
`III. MATERIALS REVIEWED
`
`16.
`
`In forming my opinions, I haVe reViewed the ‘683 patent and its file
`
`history, as well as the following documents:
`
`Exhibit M»
`
`1001
`
`OgilVy U.S. Patent No. 6,934,945 (the “‘683 Patent,”) 1002
`
`EMV ’96, Integrated Circuit Card Terminal Specification for
`Pa ment S stems, Version 3.0, June 30, 1996 EMV ’96 102 b
`
`Petitioner First Data - Exhibit 1009 - Page 7
`
`
`
`- 1
`
`OMNI 300 Series Terminal, Programmer’s Manual, Volume 1
`and Volume 2 (“OMNI 300”), 102(b) prior art)
`
`004
`
`
`
`1005
`
`1008
`
`Custy US Pat. No. 5,774,879, assigned to First Data (“First Data
`‘879 Patent”) l02(e) prior art
`
`Claim Construction Order in Cardsoft, Inc., et al. V. Verifone
`Holdings, Inc., et al., case no. 2:08-CV-98-CE
`
`1010
`
`Europay Open Terminal Architecture — A Forth-based Token
`System for Payment Terminals (“OTA”) 102(b) prior art
`
`17. All of the opinions contained in this declaration are based on the
`
`documents I reviewed and my knowledge and professional judgment. My opinions
`
`have also been guided by my appreciation of how a person of ordinary skill in the
`
`art would have understood the claims of the ‘683 patent at the time of the alleged
`
`invention, which I have been asked to initially consider as March 16, 1998, the
`
`PCT filing date of the ’ 143 application, and earlier.
`
`IV. LEGAL STANDARDS
`
`18.
`
`For purposes of this declaration, I have been asked to opine only on
`
`issues regarding 35 U.S.C. §§ 102 and 103.
`
`I have been informed of the following
`
`legal standards, which I have applied in forming my opinions.
`
`Petitioner First Data - Exhibit 1009 - Page 8
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`
`
`19.
`
`I have been advised that a claim is invalid under 35 U.S.C. § 102
`
`when a single prior art reference discloses all of the subject matter of the claim,
`
`and the claim is said to be “anticipated by the prior art.”
`
`20.
`
`I have been advised that a patent claim may be invalid as obvious
`
`under 35 U.S.C. § 103 if the differences between the subject matter patented and
`
`the prior art are such that the subject matter as a whole would have been obvious to
`
`a person of ordinary skill in the art at the time the invention was made. I have also
`
`been advised that several factual inquiries underlie a determination of obviousness.
`
`These inquiries include (1) the scope and content of the prior art, (2) the level of
`
`ordinary skill in the field of the invention, (3) the differences between the claimed
`
`invention and the prior art, and (4) any objective evidence of non-obviousness.
`
`21.
`
`I also have been advised that the law requires a “common sense”
`
`approach of examining whether the claimed invention would have been obvious to
`
`a person skilled in the art. For example, I have been advised that combining
`
`familiar elements according to known methods and in a predictable way is likely to
`
`suggest obviousness when such a combination would yield predictable results.
`
`V.
`
`PERSON OF ORDINARY SKILL IN THE ART
`
`22.
`
`In my opinion, the art relevant to the ‘683 patent relates to controlling
`
`remote payment transactions over a distributed network.
`
`Petitioner First Data - Exhibit 1009 - Page 9
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`
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`23.
`
`I have been advised that “a person of ordinary skill in the art in the
`
`relevant field” is a hypothetical person to whom one could assign a routine task in
`
`the relevant field (e.g., the field of networking or software for business or financial
`
`activities) with reasonable confidence that the task would be successfully carried
`
`out.
`
`24.
`
`I was asked to give an opinion as to the level of one of ordinary skill
`
`in the art pertinent to the subject matter set forth in the ‘683 patent at the time of
`
`the invention.
`
`25.
`
`I am familiar with the level of experience required of a person of
`
`ordinary skill in the art to be able to understand, make, and use the technology
`
`presented in the ‘683 patent. In my opinion, a person of ordinary skill in the art
`
`would be someone with 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. It is my opinion that work experience would substitute for
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`formal education and that additional formal education, such as graduate studies,
`
`could substitute for work experience.
`
`26.
`
`The basis for my familiarity with the level of ordinary skill is my
`
`interaction with large numbers of workers in the computing field who were at this
`
`level of skill as well as my own professional experience in the pertinent field. The
`
`8
`
`Petitioner First Data - Exhibit 1009 - Page 10
`
`
`
`pertinent art was the configuration and arrangement of commercially available
`
`computer components, networks, systems, and software to satisfy particular
`
`customer payment system specifications, together with such programming as might
`
`be necessary to tie the components together to operate in the desired manner.
`
`27.
`
`In reaching this opinion as to the hypothetical person of ordinary skill
`
`in the art, I have considered the types of problems encountered in the art, the prior
`
`art solutions to those problems, the rapidity with which innovations are made, the
`
`sophistication of the technology, and the educational level and professional
`
`capabilities of workers in the field.
`
`VI. OVERVIEW OF THE ‘683 PATENT
`
`28.
`
`The ‘683 patent is entitled “METHOD AND APPARATUS FOR
`
`CONTROLLING COMMUNICATIONS” and issued to Ian Charles Ogilivy on
`
`August 23, 2005. (Ex. 1001). The application that resulted in the ‘683 patent was
`
`filed on March 16, 1998 as Appl. No.: 09/381,143. There are five claims in the
`
`‘683. Claim 1 is the independent claim, the rest are dependent on claim 1.
`
`29.
`
`The ‘683 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.
`
`Petitioner First Data - Exhibit 1009 - Page 11
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`
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`30.
`
`Figure 2 is a schematic that illustrates the architecture of the purported
`
`invention:
`
`
`
`I01
`
`
`
`700
`
`HW DRIVERS
`
`HARDWARE
`
`14’-":71ARowARE /wsm-Acr/o.v
`_L/IYER.
`INTERFACE
`
`ALLOWS Ex/snn/6‘:sI0s'.
`OR Hl/ DRIVERS
`
`'05’
`
`’
`
`
`
`FIGS. 2
`
`31.
`
`The patent describes the “virtual machine” as containing two separate
`
`virtual processors 103, (1) a “virtual function processor” 107 for controlling
`
`operation of the device, including calling (2) a “virtual message processor” 105 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. The use of dual virtual processors is
`
`a common technique in computer operating systems of having different modules or
`
`subroutines for different tasks.
`
`l0
`
`Petitioner First Data - Exhibit 1009 - Page 12
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`
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`32. According to the ‘683 specification, the application of the concept of a
`
`virtual machine is not inventive: “The technique of creating a virtual processor (or
`
`in this case microprocessor) is well known and referred to as an interpreter” (‘683
`
`Patent, col. 3, ll 48-50). The ‘683 specification describes the “virtual machine” as
`
`being emulatable on different hardware platforms but, again, the specification
`
`states that the use of emulations is well understood prior art. Cardsoft ‘683 Patent,
`
`col. 3, lines 48-57.
`
`33. However, the ‘683 specification claims that the specific embodiment
`
`of the virtual machine emulation is done in “native code” which is claimed to be
`
`inventive. Since “emulatable” logically means the code implementing the virtual
`
`machine can be rewritten to run on different machines, 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.
`
`(‘683 Patent, col. 3, ll. 55-58).
`
`34.
`
`It should be noted that the use of “native code” is not required in the
`
`independent claims as discussed under claim construction below.
`
`35.
`
`The dependent claims are directed to various features that are not
`
`defined in the ‘683 patent, as discussed under claim construction below.
`
`11
`
`Petitioner First Data - Exhibit 1009 - Page 13
`
`
`
`VII. CLAIM CONSTRUCTION
`
`36.
`
`In preparing this declaration, I was asked to consider the meaning that
`
`certain claim terms would have had to those of ordinary skill in the art. I
`
`understand that, for each claim term construed, I should use the broadest
`
`reasonable interpretation that would have been understood by one of ordinary skill
`
`in the art reading the specification of the ‘683 patent at the time of the patent
`
`filings.
`
`37.
`
`I understand that the standard for claim construction at the United
`
`States Patent and Trademark Office is different from the standard used in United
`
`States District Courts.
`
`I understand that a U.S. District Court interprets claim
`
`terms based on the plain and ordinary meaning.
`
`I understand also that the United
`
`States Patent and Trademark Office interprets claim terms based on the broadest
`
`reasonable interpretation.
`
`38.
`
`I understand that the broadest reasonable interpretation may be
`
`broader in scope than the plain and ordinary meaning. Accordingly, I understand
`
`that the United States Patent and Trademark Office may adopt a different
`
`construction from a district court when the broadest reasonable interpretation is
`
`different from the plain and ordinary meaning. The table below defines the
`
`meaning of terms used in this declaration:
`
`12
`
`Petitioner First Data - Exhibit 1009 - Page 14
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`
`
`Adopted or Proposed Meaning
`
`virtualfunction processor
`
`software which controls and/or selects general
`
`operations of a communication device
`
`function processor
`
`a set of instructions that control operation of the
`
`instructions
`
`communications device
`
`virtual message processor
`
`software that processes messages, including
`
`assembling, disassembling and/or comparing
`
`messages, for communication to and/or from a
`
`communications device
`
`virtual machine means
`
`not construed as means plus function language
`
`emulatable in different
`
`the code can be rewritten to run on otherwise
`
`computers having
`
`incompatible hardware
`
`incompatible hardware or
`
`operating systems
`
`message instruction means
`
`the function is: providing directions for
`
`operation of the virtual message processor;
`
`the structure is: 13:29-14:2; 15:23-34; Figure 11
`
`and Figure 8, and equivalents thereof
`
`an application associated with
`
`any application which runs on the device
`
`said device
`
`implementing cryptograph
`
`data transmitted to or from the terminal is
`
`13
`
`Petitioner First Data - Exhibit 1009 - Page 15
`
`
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`personal mobile device
`
`the device can be moved by a person
`
`‘“‘°‘“’“”‘
`
`encrypted
`
`implements secure
`
`data transmitted to or from the terminal is
`
`communication services
`
`39.
`
`I note that the meanings for several of the terms stated above are the
`
`same as those definitions found in the claim construction order from Cardsoft v.
`
`Verifone (Ex. 1008). Any proposed differences between the claims construed in
`
`the Cardsoft v. Verifone matter and those proposed above are discussed below.
`
`40.
`
`The term virtual message processor was construed by the court in the
`
`Cardsoft v. Verifone matter 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/or from a
`
`communications device.” First Data has proposed 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
`
`14
`
`Petitioner First Data - Exhibit 1009 - Page 16
`
`
`
`“broadest reasonable interpretation.” I have considered First Data’s proposal and
`
`agree with the change to the definition of the term virtual message processor for
`
`the purposes of this declaration.
`
`41.
`
`The term emulatable in different computers having incompatible
`
`hardware or operating systems was construed by the court in the Cardsoft V.
`
`Verifone matter to mean “capable of executing programs on different computers
`
`having incompatible hardware or operating systems.” See ‘683 Patent at 3:43-46
`
`(“Any computer programmed to emulate the hypothetical computer will thus be
`
`capable of executing programs for the virtual computer. ”) First Data has proposed
`
`that the term “emulatable” simply means that the code can be rewritten to run on
`
`otherwise incompatible hardware, and thus would cover any code under a broadest
`
`reasonable construction. The patent says “the virtual machine processors are
`
`constructed using C” (‘945 patent 11:10-l 1) in the preferred embodiment. C is a
`
`popular source code language that multiple application programs can be written in.
`
`I have considered First Data’s proposal and agree with the change to the definition
`
`of the term emulatable in diflerent computers having incompatible hardware or
`
`operating systems for the purposes of this declaration.
`
`42.
`
`Claim 2 further requires that the virtual message processor be used for
`
`communication with “an application associated with the device.” Ogilvy ‘683
`
`states one description of an application by saying that “Application 104 controls
`
`15
`
`Petitioner First Data - Exhibit 1009 - Page 17
`
`
`
`the virtual machine 101, 102, 103 which in turn controls operation of the hardware
`
`100” (Ogilvy, col. 10, 11. 49-52) and that “the ‘application’ will therefore comprise
`
`instructions for the message, protocol and function processor means.” Id., at col. 5,
`
`l. 65 — col. 6, l. 2. However, there is also reference to applications that can be
`
`added to the machine, “CardScript programs” of Appendix A (col. 18, 11. 35-67).
`
`These appear to be applications which run on the virtual machine, such as a
`
`hotkeys application (Col. Col. 21, 11. 5-18). Under a broadest reasonable
`
`construction, First Data proposes to construe this term to mean “any application
`
`which runs on the device.” I have considered First Data’s proposal and agree with
`
`the definition of the term an application associated with the device for the
`
`purposes of this declaration.
`
`43.
`
`Claim 3 of the Ogilvy ‘683 patent requires that the communication
`
`means that implements the virtual message processor also implements
`
`cryptographic series. The term “cryptographic series” and “cryptographic” only
`
`appears in claim 3, and is not described in the file history. The only mention of
`
`“encrypt” is 3 mentions in the background: “At least some and perhaps all of the
`
`transmitted data may be encrypted for security purposes and the payment terminal
`
`is therefore, in such a case, required to have means (3) providing encryption.
`
`....Again, this transmitted information may be encrypted and, if so, will require
`
`translation (5) in the payment terminal.” Col. 1, l. 64- col. 2, l. 10. Accordingly,
`
`16
`
`Petitioner First Data - Exhibit 1009 - Page 18
`
`
`
`First Data proposes to construe this term to simply mean “data transmitted to or
`
`from the terminal is encrypted.” I have considered First Data’s proposal and agree
`
`with the definition of the term cryptographic series for the purposes of this
`
`declaration.
`
`44.
`
`Claim 4 of the Ogilvy ‘683 patent requires that the device be both
`
`personal and mobile. The only place the term mobile appears is in this claim,
`
`added in the continuation without discussion. Also, personal only appears in
`
`reference to a “Personal Identification Number (PIN)” in the background (col. 1, l.
`
`54). First Data proposes that the term personal mobile is construed under the
`
`ordinary meaning of the words to simply mean that “the device can be moved by a
`
`person.” I have considered First Data’s proposal and agree with the definition of
`
`the ter1n personal mobile for the purposes of this declaration.
`
`45.
`
`Claim 5 of the Ogilvy ‘683 patent requires that the virtual message
`
`processor implement secure communication services. Again, “secure
`
`communication” only appears in this claim, and was added in the continuation
`
`without discussion. The word “secure” only appears in the appendix, where it is
`
`used to describe “secure memory,
`
`secure prompts,” and “secure display.” None
`
`)7 CC
`
`of these appear to be the intent. First Data assumes that secure communications
`
`services would be construed under the ordinary meaning of the words to simply
`
`mean “the data transmitted to or from the terminal is encrypted.” I have
`
`17
`
`Petitioner First Data - Exhibit 1009 - Page 19
`
`
`
`considered First Data’s proposal and agree with the definition of the term secure
`
`communications services for the purposes of this declaration.
`
`VIII. PRIOR ART CONSIDERED
`
`46.
`
`1. EMV ’96, Integrated Circuit Card Terminal Specification for
`
`Payment Systems, Version 3.0, June 30, 1996 (EMV ’96) l02(b) prior art. 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.
`
`47.
`
`2. OMNI 300 Series Terminal, Programmer’s Manual, Volume 1 and
`
`Volume 2 (“OMNI 300” ), l02(b) prior art). This manual was provided with the
`
`300 series terminals and includes description of the message assembling,
`
`disassembling and comparison functions.
`
`48.
`
`3. Cus US Pat. No. 5 774 879 assi ned to First Data “First Data
`
`‘879 Patent”) l02(e) prior art. 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).
`
`49.
`
`4. Europay Open Terminal Architecture — A Forth-based Token
`
`System for Payment Terminals (“OTA”[ l02(b) prior art. This 1996 paper was
`
`1 8
`
`Petitioner First Data - Exhibit 1009 - Page 20
`
`
`
`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 an Europay Members meeting in Seville, Spain June 5-7, 1996 (see Ex.
`
`, p.
`
`29). The paper describes a “virtual machine” with a “kemel” having functions that
`
`“can be run on any [POS] terminal” in “native code.” The functions include
`
`“message management” (the claimed virtual message processor).
`
`IX. APPLICATION OF THE PRIOR ART TO THE CLAIMS
`
`50.
`
`It is my opinion that claims 1 to 5 of the ‘683 patent are anticipated by
`
`EMV ‘96. Details regarding my analysis and opinion are found in Exhibit A to
`
`this declaration.
`
`51.
`
`It is my opinion that claims 1 to 5 of the ‘683 patent are obvious over
`
`EMV ’96 in view of OMNI 300. Details regarding my analysis and opinion are
`
`found in Exhibit A to this declaration.
`
`52.
`
`It is my opinion that claims 1 to 5 of the ‘683 patent are obvious over
`
`EMV ’96 in view of OTA, OMNI 300 and First Data’s ‘879 Patent. Details
`
`regarding my analysis and opinion are found in Exhibit A to this declaration.
`
`X. MOTIVATION TO COMBINE REFERENCES
`
`53.
`
`EMV ’96 and OMNI 300. OMNI 300 describes software for mag
`
`stripe POS terminals using Verifone’s TXO operating system with source code in
`
`Petitioner First Data - Exhibit 1009 - Page 21
`
`
`
`the standard C language. 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 systems and acquirers for terminals that accept
`
`magnetic stripe cards.” (p. vii). Both EMV ‘96 and OMNI 300 are directed to POS
`
`devices and one of skill in the art looking at updating the OMNI 300 in 1998
`
`would want to make sure it complied with EMV ’96, the de facto industry
`
`standard.
`
`54.
`
`EMV ’96 OTA OMNI 300 and First Data ‘879. It would be obvious
`
`to combine these references because all relate to POS terminals. In 1998, 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
`
`20
`
`Petitioner First Data - Exhibit 1009 - Page 22
`
`
`
`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 emulation 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 in paragraph 52
`
`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 implement a virtual communication processor as
`
`described in the First Data ‘879 Patent.
`
`XI. CONCLUSION
`
`55.
`
`In summary, as set forth in this declaration and in the attached
`
`exhibits, it is my opinion that all of the features recited in claims 1-5 of the ‘683
`
`patent are invalid as anticipated or obvious to a person of ordinary skill in the art at
`
`the time of the invention.
`
`56.
`
`In signing this declaration, I understand that the declaration will be
`
`filed as evidence in a contested case before the Patent Trial and Appeal Board of
`
`the United States Patent and Trademark Office. I acknowledge that I may be
`
`subject to cross-examination in this case and that cross-examination will take place
`
`within the United States. If cross-examination is required of me, I will appear for
`
`21
`
`Petitioner First Data - Exhibit 1009 - Page 23
`
`
`
`cross-examination within the United States during the time allotted for cross-
`
`examination.
`
`57.
`
`I declare that all statements made herein of my knowledge are true,
`
`and that all statements made on information and belief are believed to be true, and
`
`that these statements were made with the knowledge that willful false statements
`
`and the like so made are punishable by fine or imprisonment, or both, under
`
`Section 1001 of Title 18 of the United States Code.
`
`Dated: April 30, 2014
`
`9'€z«,.c
`
`662426 1 9V.l
`
`22
`
`Petitioner First Data - Exhibit 1009 - Page 24
`
`
`
`EXHIBIT A
`
`Petitioner First Data - Exhibit 1009 - Page 25
`
`
`
`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. In 1998, 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 and both relate to Europay terminals.
`
`The ‘683 Patent
`1. A communications
`EMV ‘96
`
`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,
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