Trials@uspto.gov
`571.272.7822
`
`Paper No. 56
`Filed: March 11, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`ASKELADDEN LLC,
`Petitioner,
`
`v.
`
`SEAN I. MCGHIE and BRIAN K. BUCHHEIT,
`Patent Owner.
`_______________
`
`Case IPR2015-00124
`Patent 8,540,152 B1
`_______________
`
`Before SALLY C. MEDLEY, JONI Y. CHANG, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`
`
`BRADEN, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`Inter Partes Review
`35 U.S.C. § 318(a) and 37 C.F.R. § 42.73
`
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`INTRODUCTION
`I.
`We have jurisdiction to hear this inter partes review under 35 U.S.C.
`§ 6(c), and this Final Written Decision is issued pursuant to 35 U.S.C.
`§ 318(a) and 37 C.F.R. § 42.73. For the reasons that follow, we determine
`that Petitioner has shown by a preponderance of the evidence that claims 1–
`20 of U.S. Patent No. 8,540,152 B1 (Ex. 1501, “the ’152 patent”) are
`unpatentable.
`A. Procedural History
`Petitioner, Askeladden LLC1 filed a Petition to institute an inter
`partes review of claims 1–20 of the ’152 patent. Paper 1 (“Pet.”). Patent
`Owner, Sean I. McGhie and Brian K. Buchheit,2 filed a Revised Preliminary
`Response. Paper 15 (“Prelim. Resp.”). Upon consideration of the Petition
`and Preliminary Response, pursuant to 35 U.S.C. § 314(a), we instituted an
`inter partes review of claims 1–20 as on the following grounds:
`
`
`1 The Real Parties-in-Interest also includes The Clearing House Payment
`Company. See Paper 28.
`2 Patent Owner is represented by inventor Brian Buchheit, who is an attorney
`and registered to practice before the Office. At times during the proceeding,
`Mr. Buchheit indicated that he was representing “Patent Owners” (Mr.
`Buchheit and Mr. McGhie), while at other times Mr. Buchheit indicated that
`he was not representing Mr. McGhie, but rather acting pro se. Papers 4, 15,
`40, 50; Ex. 2054. Over the course of the proceeding, we have provided
`instructions to Patent Owner on filing papers, authorized Patent Owner leave
`to refile papers and file papers beyond due dates, and expunged other Patent
`Owner papers that were not authorized, not in compliance with Board rules,
`and/or contained arguments beyond what was authorized. See, e.g., Papers
`8, 9, 11, 14, 38, 39 (and Exhibit 3001), 51, 53.
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`References
`MacLean3 and Sakakibara4
`MacLean, Sakakibara, and
`Postrel5
`
`Basis
`§ 103
`§ 103
`
`Claims Challenged
`7–11
`1–6 and 12–20
`
`See Paper 35 (“Dec. to Inst.”), 39.
`In the Scheduling Order, which sets times for taking action in this
`proceeding, we notified the parties that “any arguments for patentability not
`raised in the [Patent Owner] response will be deemed waived.” Paper 36, 3;
`see also Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766
`(Aug. 14, 2012) (a patent owner’s “response should identify all the involved
`claims that are believed to be patentable and state the basis for that belief”).
`Patent Owner, however, did not file a Patent Owner Response. To ensure
`clarity in our record, we required Patent Owner to file a paper, indicating
`whether it had abandoned the contest.6 Paper 51. Patent Owner indicated
`that it had not abandoned the contest. Paper 53. Patent Owner, however,
`did not seek authorization to belatedly file a Patent Owner Response, nor
`indicated that it wished to file such a Response. We have, therefore, the
`
`3 US Patent Publication No. 2002/0143614 A1, pub. Oct. 3, 2002 (Ex. 1504,
`“MacLean”).
`4 US Patent No. 6, 721,743 B1, iss. Apr. 13, 2004 (Ex. 1505, “Sakakibara”).
`5 US Patent Publication No. 2005/0021399 A1, pub. Jan. 27, 2005 (Ex.
`1503, “Postrel”).
`6 An abandonment of the contest is construed as a request for adverse
`judgment. 37 C.F.R. § 42.73(b)(4). A request for adverse judgment, on
`behalf of a Patent Owner, would result in the cancellation of the involved
`claims of a challenged patent, e.g., without consideration of the Petition, etc.
`On the other hand, when a Patent Owner does not abandon the contest, but
`chooses not to file a Patent Owner Response, the Board generally will render
`a final written decision, e.g., based on consideration of the Petition, etc.
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`Petition before us with no Patent Owner Response. Nonetheless, Petitioner
`bears the burden to show, by a preponderance of the evidence, that the
`challenged claims are unpatentable.
`For the reasons that follow, we determine that Petitioner has shown by
`a preponderance of the evidence that claims 1–20 of the ’152 patent are
`unpatentable.
`B. Related Proceedings
`Petitioner informs us that the ’152 patent is the subject of a
`concurrently-filed petition for inter partes review. Pet. 1; see IPR2015-
`00125. Petitioner also informs us that related U.S. Patent Nos. 8,313,023 B1
`and 8,511,550 B1 (“’023 Patent” and “’550 Patent,” respectively) are the
`subjects of covered business method review proceedings, cases CBM2014-
`00095 (“’023 CBM”) and CBM2014-00096 (“’550 CBM”). Pet. 1.
`C. The ’152 Patent
`The ’152 patent discloses systems and methods for converting points
`or credits from one loyalty program to a different loyalty program and
`redeeming the points or credits for services or merchandise. Ex. 1501,
`Abstract. One embodiment of the ’152 patent is illustrated in Figure 1,
`reproduced below.
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`As shown in Figure 1, non-negotiable points or credits 136 earned from a
`consumer incentive activity 122 (e.g., a frequent flyer loyalty program) are
`converted to negotiable funds 138 provided by conversion agency 136. Id.
`at 3:60–64; Fig. 1. According to the ’152 patent, consumer incentive
`activity 122 is sponsored by credit providing entities 120. Id. at 6:19–21.
`Examples of credit providing entities 120 includes corporations such as
`airlines, hotels, credit card companies, casinos, cruise ships, States (for
`lottery, scratch off games, etc.), churches, race tracks, online gambling site
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`providers, e-commerce sites, slot-machine houses, carnivals, gambling
`parlors, companies (for promotional sweepstakes), high schools (for raffles),
`and the like. Id. at 6:21–27.
`The ’152 patent discloses an “online embodiment,” described as
`embodiment 150 in Figure 1, where person 110 can interact (130) with credit
`providing entity site 156 to participate in consumer incentive activity 122.
`Id. at 4:38–41; Fig. 1. According to embodiment 150, commercial
`transaction 114 can be conducted via an e-commerce Web site 157. Id. at
`4:41–42. Additionally, conversion agency 124 can implement a software
`based conversion service 158, which performs conversion of non-negotiable
`funds 136 into negotiable funds 138. Id. at 4:43–46. Web sites 156, 157 and
`service 158 can run within one or more servers 154. Id. at 4:46–47. Servers
`154 can be connected to client 152 via network 153, where client 152 is a
`computing device that user 110 interacts (130 and/or 114) with. Id. at 4:47–
`50.
`
`The ’152 patent discloses an “account transfer embodiment,”
`described as embodiment 170 in Figure 1, where user 110 participates in
`consumer incentive activity 122 (e.g., in this instance game of chance 172).
`Id. at 5:15–17; Fig. 1. Earnings (134, 136) from the consumer incentive
`activity 122 are recorded within tangible data store 174 associated with
`credit providing entity 120. Id. at 5:18–20. Data store 174 can include
`account 175 for user 110, which tracks the amount of credits 134 (i.e., non-
`negotiable funds 136) belonging to user 110. Id. at 5:20–23. According to
`the ’152 patent, conversion agency 124 can access directly account 175 of
`data store 174 and can convert a quantity of credits 134 into negotiable funds
`138, which are recorded in tangible data store 176 (not directly associated
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`with entity 120). Id. at 5:23–27. Data store 176 can include account 177 for
`the user 110, which contains an amount of negotiable funds 138 belonging to
`user 110. Id. at 5: 27–29. User 110 can conduct commercial transactions
`114 via machine 179, such as a kiosk, an ATM, etc., which can assess and
`dispense the funds in account 177. Id. at 5:29–31.
`D. Illustrative Claim
`As noted above, an inter partes review was instituted as to claims
`1– 20 of the ’152 patent, of which claims 1, 7, and 13 are independent
`claims. Claim 1 is illustrative of the challenged claims and is reproduced
`below (with paragraphing):
`1. A method comprising:
`an entity agreeing to permit transfers or conversions of
`non-negotiable credits to entity independent funds, wherein the
`entity agrees to compensate a commerce partner by paying an
`amount in cash or credit for each non-negotiable credit redeemed
`by the commerce partner, wherein said non-negotiable credits are
`loyalty points of the loyalty program possessed by a member,
`wherein the loyalty points are maintained in a loyalty program
`account owned or controlled by the entity, wherein the entity
`redeems the loyalty points for a set of entity services that the
`entity provides to the member, wherein said entity independent
`funds are different loyalty points of a different loyalty program
`of a commerce partner, wherein the different loyalty points are
`redeemable by the commerce partner for commerce partner
`services that the commerce partner provides to the member,
`wherein said entity independent funds are possessed by the
`member and are maintained in a funds account, wherein the
`funds account is neither owned or controlled by the entity or by
`any subsidiary or parent of the entity, wherein the entity does not
`accept the entity independent funds as payment for any of the
`entity services;
`the computer detecting a set of two or more interactions
`earning additional non-negotiable credits for the member in
`accordance with terms-of-use of the loyalty program, wherein
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`the computer adds the additional non-negotiable credits to the
`loyalty program account; and
`responsive to an indication of a conversion operation
`occurrence, the computer subtracting a quantity of the non-
`negotiable credits from the loyalty program account, said
`subtracted quantity of non-negotiable credits comprising at least
`a quantity of non-negotiable credits that were converted or
`transferred to a new quantity of entity independent funds,
`wherein the conversion operation occurrence causes
`the
`subtracting of the non-negotiable credits from the loyalty
`program account to occur approximately concurrently with an
`addition of a corresponding quantity of entity-independent funds
`being added to the funds account per the conversion operation
`occurrence.
`
`Ex. 1501, 16:5–45.
`
`II. DISCUSSION
`A. Claim Construction
`In an inter partes review, claim terms in an unexpired patent are
`interpreted according to their broadest reasonable construction in light of the
`specification of the patent in which they appear. 37 C.F.R. § 42.100(b); see
`also In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1279 (Fed. Cir. 2015)
`(“Congress implicitly approved the broadest reasonable interpretation
`standard in enacting the AIA,” and “the standard was properly adopted by
`PTO regulation.”), cert. granted sub nom., Cuozzo Speed Techs. LLC v. Lee,
`136 S. Ct. 890 (mem.) (2016). 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).
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`Petitioner proposes constructions for the following claim terms:
`“entity,” “non-negotiable credits,” and “entity independent funds,” which are
`recited at least in independent claims 1, 7, and 13. Pet. 6–9. In our Decision
`to Institute, we determined that Petitioner’s proposed constructions are
`consistent with the broadest reasonable construction, and adopted them.
`Dec. to Inst. 7–10. We also construed “commerce partner” to mean an
`individual or group involved in commercial activity. Id. at 10–11. Neither
`party has indicated that our constructions are improper and we do not
`perceive any reason or evidence that now compels any deviation from our
`initial constructions. Accordingly, the following claim constructions apply
`to this Final Written Decision:
`
`
`Claim Term
`entity
`
`non-negotiable credits
`
`entity independent funds
`
`commerce partner
`
`Construction
`an organization that has a rewards
`program for a consumer
`credits which are accepted only by
`the granting entity of the credits
`funds acceptable as payment by at
`least one entity different from the
`original granting entity of the non-
`negotiable credits
`an individual or group involved in
`commercial activity
`
`Our analysis in this Decision is not impacted by whether we apply the
`broadest reasonable interpretation or the Phillips standard applicable to
`district court proceedings. See Phillips v. AWH Corp., 415 F.3d 1303 (Fed.
`Cir. 2005) (en banc).
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`B. Principles of Law
`A claim is unpatentable under 35 U.S.C. § 103(a) if “the differences
`between the subject matter sought to be patented 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 said
`subject matter pertains.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`(2007). The question of obviousness is resolved on the basis of underlying
`factual determinations, including: (1) the scope and content of the prior art;
`(2) any differences between the claimed subject matter and the prior art;
`(3) the level of skill in the art; and (4) objective evidence of nonobviousness,
`i.e., secondary considerations. See Graham v. John Deere Co., 383 U.S. 1,
`17–18 (1966).
`In that regard, an obviousness analysis “need not seek out precise
`teachings directed to the specific subject matter of the challenged claim, for
`a court can take account of the inferences and creative steps that a person of
`ordinary skill in the art would employ.” KSR, 550 U.S. at 418; Translogic,
`504 F.3d at 1262. A prima facie case of obviousness is established when the
`prior art itself would appear to have suggested the claimed subject matter to
`a person of ordinary skill in the art. In re Rinehart, 531 F.2d 1048, 1051
`(CCPA 1976).
`We analyze the instituted grounds of unpatentability in accordance
`with the above-stated principles.
`C. Level of Ordinary Skill in the Art
`The applied prior art reflects the appropriate level of skill at the time
`of the claimed invention. See Okajima v. Bourdeau, 261 F.3d 1350, 1355
`(Fed. Cir. 2001).
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`D. Asserted Obviousness of Claims 7–11 in view of MacLean and
`Sakakibara
`Petitioner contends claims 7–11 of the ’152 patent are unpatentable
`under 35 U.S.C. § 103 in view of MacLean and Sakakibara. Pet. 15–32. To
`support its contentions, Petitioner provides detailed explanations as to how
`the combination of prior art meets each claim limitation. Id. Petitioner also
`relies upon a Declaration of Matthew Calman (Ex. 1502) for support. For
`reasons that follow, we determine that Petitioner has shown by a
`preponderance of the evidence that the challenged claims of the ’152 patent
`would have been obvious in view of MacLean and Sakakibara.
`1. Overview of MacLean
`MacLean discloses an apparatus and a method for facilitating the
`exchange of points between selected entities. Ex. 1504, Abstract. The
`method of MacLean specifically allows for tracking, managing, and
`exchanging points that are issued and redeemed in the context of a loyalty
`program. Id. ¶¶ 1, 14. Figure 1, reproduced below, illustrates one
`embodiment of a point management system taught in MacLean.
`
`
`In Figure 1, point management system 100 facilitates interaction
`
`between customer 110, a transaction center 120, and a plurality of points
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`issuers 130a–c. Id. ¶ 40. According to MacLean, point issuer 130 is any
`entity that (i) controls the disposition and distribution of a currency and (ii)
`operates a Loyalty Program that controls a private currency of points. Id.
`MacLean discloses that the points managed by system 100 may take the
`form of a variety of Loyalty Program (“LP”) points such as those issued by
`airlines, hotels, financial entities, e.g., credit cards, and networks, e.g., portal
`web sites on the Internet. Id.
`Another embodiment of the system taught in MacLean is illustrated in
`Figure 3, reproduced below.
`
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`Figure 3 shows the steps that MacLean’s point management system
`100 uses to permit a customer to affect an exchange of points from one LP to
`another. MacLean teaches that customer 110 opens a portfolio with
`transaction center 120 and enters information regarding each points issuer
`130a–c with whom customer 110 has participated and has accumulated LP
`points. Ex. 1504 ¶ 50; Figs. 4a–b. Transaction center 120 validates that
`customer 110 has an account with each points issuer 130a–c. Id. A valid
`account confirmation record will include the current points balance for that
`LP account and transaction center 120 will add the account to customer
`110’s portfolio. Id.; Fig. 4E.
`MacLean discloses an embodiment that uses computer programs to
`implement the exchange of point from a first issuer LP (from which points
`are withdrawn) to a second issuer LP (to which points are deposited and
`received). Id. ¶ 52; Figs. 5A, 6A–I. This embodiment is illustrated in
`Figure 5A, reproduced below.
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`Figure 5A shows that once a customer has validated accounts in its
`portfolio, the customer can follow a series of steps to request that points be
`exchanged between two issuer LPs. According to MacLean, after the
`customer designates withdrawing LPs, step 507 of Figure 5A compares the
`current point balances of the customer’s accounts in withdrawing LPs with
`the number of points requested in step 506, and if the requested points are
`greater than the assessed account balances, then step 508 terminates the
`point exchange carried out by the execution of the point exchange program
`500 and a message is displayed to notify the customer that its current point
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`balances are insufficient to complete the requested points exchange. Ex.
`1504 ¶ 52; Fig. 5A. On the other hand, MacLean explains that if the points
`are available in the customer’s LP accounts, then the point exchange
`program 500 moves to step 509, which displays web page 630. Id. ¶ 52;
`Figs. 5A, 6D. Web page 630 includes a box 632 for step 510, which permits
`the customer to designate the depositing LP to which the points are
`transferred. Id.; Fig. 6D. Step 511 in MacLean calculates the exchange
`rates for this points transaction and displays a summary of the withdrawal
`and deposit points. Id.; Fig. 6E. If the customer chooses to continue with the
`transaction, then in step 515 the customer enters any required payment
`information needed to affect the exchange. Id.; Figs. 6D–6I.
`MacLean discloses that once the details of the requested points
`exchange have been accumulated and confirmed by the web server 230,
`points exchange program 500 is executed in a two-step procedure. Id. ¶ 53;
`Fig. 2. The first step performs all of the point withdrawals from the
`designated withdrawing LPs and the second step performs the points deposit
`to the designated depositing LPs. Id.
`2. Overview of Sakakibara
`Sakakibara discloses a system for managing and exchanging points
`received as rewards for purchasing products, or using various products or
`services. Ex. 1505, 1:10–29. The system in Sakakibara allows a user to
`convert points from one program into points from another program in
`accordance with a conversion ratio. Id. at 7:7–10.
`Figure 1, reproduced below, illustrates one embodiment disclosed in
`Sakakibara.
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`As shown in Figure 1, a first business entity 100 provides on-line
`services, as well as loyalty points that are used as virtual money, but can
`only be used on communication network 400. Id. at 6:3–12. Another
`embodiment in Sakakibara discloses that the loyalty points issued by first
`business entity 100 are redeemable only by first business entity 100. Id. at
`12:64–13:30.
`According to the illustration in Figure 1, customers 200 are connected
`to communication network 400 through customer-use terminal units 20 such
`as personal computers, and also have a membership to point services
`provided by various second business entities 300 that serve valuable points
`which are exchangeable for various products and services as a reward for
`consumption activity. Id. at 6:15–22. First business entity 100 and second
`business entities 300 enter business cooperation contracts with each other
`and the entities are connected to network 400 through cooperate-use
`terminal units 30. Id. at 6:25–29. According to Sakakibara, communication
`points database 101 records information related to loyalty points, while
`exchange database 102 records information related to an exchange rate of
`loyalty points and various valuable exchange points managed by second
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`business entities 300, and customer information database 103 records
`information related to customers 200. Id. at 6:44–51.
`Sakakibara provides an embodiment that allows customers 200 to
`authenticate their identities, confirm that they have memberships with first
`business entity 100 and respective second business entities 300, and then
`exchange loyalty points between the business entities. Id. at 7:40–8:10.
`Sakakibara discloses that in exchange database 102, data indicating the
`exchange rates between the valuable exchange points and the loyalty points
`managed by respective second business entities 300 are recorded in the items
`showing the names of respective second business entities 300 (or the
`common names of provided services). Id. at 7:1–6. Figure 4, reproduced
`below, illustrates an example of exchange rates established for second
`business entities 300 using Sakakibara’s system.
`
`
`Figure 4 shows exchange rates used to calculate the value of loyalty points
`and determine the appropriate exchange information. Id. at 8:36–9:9. The
`recorded exchange rates are values set according to the contents of the
`contracts made between first business entity 100 and respective second
`business entities 300. Id. at 7:7–10.
`3. Analysis
`Petitioner contends the disclosures of MacLean and Sakakibara, as
`summarized above, teach or suggest each limitation of claims 7–11 of the
`’152 patent. Pet. 15–32.
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`a. Independent Claim 7
`Petitioner contends that a person of ordinary skill in the art, at the time
`of the invention, would have been well versed in loyalty programs, loyalty
`points, and the conversion or exchange of loyalty points. Id. at 10–15.
`According to Petitioner, MacLean and Sakakibara are both in the same field
`(loyalty points management systems) and address the same problem —
`managing/controlling and exchanging/converting loyalty points. Id. at 17–
`18; see Ex. 1502 ¶ 99. Petitioner supports its position with the Declaration
`of Mr. Calman, who testifies that a person of skill in the art would have
`understood MacLean and Sakakibara relate to general principles of loyalty
`programs and include well-known features (such as withdrawing points from
`one loyalty program and converting them to another loyalty program’s
`points) that were widely practiced in loyalty programs, thereby rendering the
`challenged claims obvious. Ex. 1502 ¶¶ 24–40; 53–55.
`For claim 7, Petitioner contends that MacLean discloses loyalty
`programs issuing credits in the form of loyalty points, such as airline
`mileage programs, to aid in influencing customers to continue to purchase
`products and/or services from one source. Pet. 15–16 (citing Ex. 1504 ¶¶ 2,
`3; Fig. 2). According to Petitioner, the system described in MacLean allows
`for the transfer of conversion of loyalty program points in accordance with
`an exchange rate that is set for points of different loyalty programs. Id. at
`16–17 (citing Ex. 1504 ¶¶ 21, 23, 44, 52, 64, Figs. 1, 2, 6E). Petitioner then
`explains that MacLean loyalty points are consistent with the general concept
`that loyalty points earned from one merchant (e.g., United Airlines or
`Macy’s) could not be redeemed for goods or services at another merchant
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`(e.g., Delta Airlines or Bloomingdale’s), which Petitioner argues has long
`been the standard practice. Id. at 17 (citing Ex. 1502 ¶ 96.)
`Petitioner further contends that Sakakibara discloses the concept that
`loyalty points are non-negotiable credits. Pet. 17. According to Petitioner,
`Sakakibara describes a system that allows a user to convert loyalty points
`from one entity’s program into points from another’s in accordance with a
`conversion ratio and explicitly recognizes that, absent conversion, another
`entity (i.e., a commerce partner) does not accept the non-negotiable credits
`as payment for services. Id. (citing Ex. 1505, Abstract, 7:7–10, 12:64–
`13:30); Ex. 1502 ¶ 97. Petitioner cites to claim 9 of Sakakibara as support
`for its position, because claim 9 recites that, prior to conversion, loyalty
`points issued by one entity are only redeemable at that entity (i.e., they are
`non-negotiable). Id. (citing Ex. 1505, 12:64–13:30).
`Petitioner then asserts that one of ordinary skill in the art would have
`recognized that MacLean’s individual merchant loyalty points would
`preferably have been accepted only by that merchant, and would not have
`been accepted as payment with another merchant, based on the explicit
`teachings of Sakakibara, which also relates to the general principles of
`loyalty programs. Id.
`We agree with Petitioner’s position that the combined teachings of
`MacLean and Sakakibara, as summarized above, teaches or suggests each
`limitation of challenged claim 7. Specifically, we agree that the cited
`references teach or suggest an exchange of points for funds occurring
`“approximately concurrent in time.” We credit the testimony of Mr.
`Calman, who states that MacLean teaches that subtracting non-negotiable
`credits occurs approximately concurrently with adding corresponding entity
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`independent funds. Ex. 1502 ¶ 118. We give Mr. Calman’s testimony
`substantial weight in that regard because it is supported by MacLean’s
`disclosure, specifically MacLean’s Figures 6E and 6F, which illustrate the
`results of the subtraction and the addition being displayed on the same web
`page as a member carries out a points exchange. See Ex. 1504 ¶ 51, Figs.
`6E, 6F. Mr. Calman further explains that MacLean teaches that a points
`exchange may be effected using a “real time” protocol (id. ¶ 51), and
`MacLean also refers to using “push[es]” and “pulls” to update portfolio
`balance information as changes occur to issuer 130 accounts (Id. ¶¶ 57–59).
`Ex. 1502 ¶ 118. Mr. Calman testifies that one of ordinary skill in the art
`would have understood at the time of the invention MacLean to teach that
`the subtraction and addition occur approximately concurrently. Id. A
`challenge to patentability under 35 U.S.C. § 103 requires that all the claim
`limitations must be taught or suggested by the prior art as gauged in view of
`the creativity of an ordinarily skilled artisan. See KSR, 550 U.S. at 420–421.
`Therefore, we are satisfied that one of skill in the art would have understood
`MacLean teaches that “quantities of non-negotiable credits are subtracted
`from the loyalty point account approximately concurrent in time with the
`new quantities of entity independent funds being added to the funds
`account” as recited in challenged claim 7.
`We also agree with, and adopt as our own, Petitioner’s showing that
`MacLean describes or suggests a “commerce partner agreeing to permit
`transfers or conversions of quantities of non-negotiable credits to entity
`independent funds” as required by claim 7. See Pet. 20. Specifically, we
`agree that MacLean teaches a commerce partner that agrees to permit
`transfers or conversions of points. Id. As explained above in the claim
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`construction section, we construe the claim term “commerce partner” to
`mean an individual or group involved in commercial activity. See supra,
`Section II.A. Therefore, we are satisfied that MacLean teaches or suggests a
`“commerce partner agreeing to permit transfers or conversions of quantities
`of non-negotiable credits to entity independent funds” as required by claim
`7.
`
`Similarly, we agree with, and adopt as our own, Petitioner’s showing
`that MacLean describes or suggests that a “commerce partner receives
`compensation in cash or credit from an entity for transfers or conversions,”
`as required in claim 7. See Pet. 21–22. Additionally, we credit the
`testimony of Mr. Calman, who explains that MacLean discloses payments
`from a withdrawing issuer to a depositing issuer (i.e., the commerce partner)
`for each non-negotiable credit redeemed by the depositing issuer. Ex. 1502
`¶ 100 (citing Ex. 1504 ¶¶ 64–67; Figs. 9–12). Thus, we are satisfied that one
`of ordinary skill in the art would have understood that MacLean teaches or
`suggests that a “commerce partner receives compensation in cash or credit
`from an entity for transfers or conversions,” as recited by claim 7.
`Lastly, we agree with Petitioner’s position that the combination of
`MacLean and Sakakibara teaches a computer (which is the computer for the
`different loyalty program of the commerce partner) redeeming at least a
`portion of the new quantities of entity independent funds in exchange for
`user selected ones of the commerce partner services as required by claim 7.
`We specifically find that Sakakibara discloses that an exchange (such as for
`redemption) is not permitted without credits (first points) being first
`converted into entity independent funds (second points), and that Sakakibara
`describes “[a] method of exchanging points between different business
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`entities . . . wherein the first points are only directly redeemable by the first
`business entity, and wherein the second points are only directly redeemable
`by the second business entity.” See Ex. 1505, 12:64–13:30. We also credit
`the testimony of Mr. Calman, who opines about how one of ordinary skill in
`the art would read MacLean in light of Sakakibara and about motivating
`factors behind the points exchanges in MacLean and Sakakibara. Ex. 1502
`¶ 121.
`Therefore, we conclude Petitioner has shown by a preponderance of
`the evidence that claim 7 would have been obvious under 35 U.S.C. § 103 in
`view of MacLean and Sakakibara.
`b. Dependent Claims 8–11
`Claims 8–11 depend from claim 7, and Petitioner contends that
`MacLean and Sakakibara, as summarized above, teaches or suggests aspects
`of each dependent claim. Pet. 18–20, 27–32. Petitioner cites to the
`Declaration of Mr. Calman who explains that, at the time of the invention, a
`person of ordinary skill in the art would have understood that MacLean’s
`point exchange system demonstrates transfers or conversions of loyalty
`points between the entity’s loyalty program and a commerce partner’s
`computer as claimed. Ex. 1502 ¶¶ 78–89, 122–132. We give Mr. Calman’s
`testimony substantial weight in that regard because it is supported by
`MacLean’s disclosure and what MacLean would have conveyed to a person
`of ordinary skill in the art at the time of the invention.
`We also determine that Petitioner has identified sufficient reasoning
`for the proposed combination of MacLean and Sakakibara with respect to
`claims 8–11 as well as claim 7. Pet. 18–20, 27–32; Ex. 1502 ¶¶ 78–89, 122–
`132. For exam