Trials@uspto.gov
`571-272-7822
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` Paper 32
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` Entered: April 23, 2015
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`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 IPR2015-00133
`Patent 8,297,502 B1
`____________
`
`
`
`Before SALLY C. MEDLEY, JONI Y. CHANG, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`
`571-272-7822
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`
`
`
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` Paper 32
`
`
`
` Entered: April 23, 2015
`
`
`
`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 IPR2015-00133
`Patent 8,297,502 B1
`____________
`
`
`
`Before SALLY C. MEDLEY, JONI Y. CHANG, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`
`
`IPR2015-00133
`Patent 8,297,502 B1
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`
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`I.
`
`INTRODUCTION
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`Petitioner, Askeladden LLC, filed a Petition requesting an inter partes
`
`review of claims 1–30 of U.S. Patent No. 8,297,502 B1 (Ex. 1501, “the ’502
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`patent”). Paper 1 (“Pet.”). In response, Patent Owner, Sean I. McGhie and
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`Brian K. Buchheit, filed a Preliminary Response. Paper 10 (“Prelim.
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`Resp.”). We have jurisdiction under 35 U.S.C. § 314, which provides that
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`an inter partes review may not be instituted “unless . . . the information
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`presented in the petition . . . shows that there is a reasonable likelihood that
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`the petitioner would prevail with respect to at least 1 of the claims
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`challenged in the petition.”
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`For the reasons set forth below, we institute an inter partes review of
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`claims 1–30 of the ’502 patent.
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`A. Related Matter
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`IPR2015-00137 involves the same patent and same parties.
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`B. The ’502 Patent
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`The ’502 patent relates generally to consumer reward or loyalty
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`programs. Ex. 1501, 1:17–2:11. According to the ’502 patent, entities
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`(e.g., airlines or credit card companies) often reward consumers, for utilizing
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`their services, with non-negotiable credits, such as frequent flier miles,
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`consumer loyalty points, and entertainment credits. Id. at 1:20–22, 7:16–17.
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`The ’502 patent discloses a graphical user interface for customers to convert
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`non-negotiable credits into entity independent funds that can be used as
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`2
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`payment for goods or services provided by a commerce partner. Id. at
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`Abstract, 2:32–65.
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`C. Illustrative Claim
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`Of the challenged claims, claims 1, 9, 17, and 25 are the only
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`independent claims. Claims 2–9 depend directly from claim 1; claims 10–16
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`depend directly from claim 9; claims 18–24 depend directly from claim 17;
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`and claims 26–30 depend directly from claim 25.
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`Claim 1, reproduced below, is illustrative.
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`1. A method comprising:
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`a computer presenting a graphical user interface (GUI)
`on a display, said graphical user interface showing a quantity of
`non-negotiable credits earned through previous interactions
`with an entity, the graphical user interface comprising a
`conversion option to convert at least a subset of the shown non-
`negotiable credits into entity independent funds in accordance
`with a conversion ratio, wherein the entity independent funds
`are accepted by a commerce partner as at least partial payment
`for goods or services provided by the commerce partner,
`wherein the commerce partner is not said entity, wherein in
`absence of converting the non-negotiable credits into entity
`independent funds the commerce partner does not accept the
`non-negotiable credits as payment for goods or services
`provided by the commerce partner;
`
`the computer receiving a selection of the conversion
`option; and
`
`responsive to the received selection being processed, the
`computer presenting within the graphical user interface a
`quantity of available entity independent funds for use as
`payment for the goods or services provided by the commerce
`partner, said quantity of available entity independent funds
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`3
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`IPR2015-00133
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`resulting from converting the subset of non-negotiable credits
`into the quantity of available entity independent funds in
`accordance with the conversion ratio.
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`Ex. 1501, 6:22–48.
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`D. Prior Art Relied Upon
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`
`
`Petitioner relies upon the following prior art references:
`
` US 2005/0021399 A1 Jan. 27, 2005
`Postrel
` US 2002/0143614 A1 Oct. 3, 2002
`MacLean
`Sakakibara US 6,721,743 B1
`Apr. 13, 2004
`
`(Ex. 1503)
`(Ex. 1504)
`(Ex. 1505)
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`E. Asserted Grounds of Unpatentability
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`Petitioner asserts the following grounds of unpatentability:
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`Challenged Claims
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`Basis
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`References
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`1–3, 7–11, 15, and 16
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`§ 103(a) MacLean and Sakakibara
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`4–6, 12–14, and 17–30
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`§ 103(a) MacLean, Sakakibara, and Postrel
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`
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`II. ANALYSIS
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`A. Claim Construction
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`In an inter partes review, claim terms in an unexpired patent are given
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`their broadest reasonable construction in light of the specification of the
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`patent in which they appear. 37 C.F.R. § 42.100(b); see also In re Cuozzo
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`Speed Techs., LLC, 778 F.3d 1271, 1281–82 (Fed. Cir. 2015) (“Congress
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`implicitly adopted the broadest reasonable interpretation standard in
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`enacting the AIA,” and “the standard was properly adopted by PTO
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`regulation.”). Under the broadest reasonable interpretation standard, claim
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`terms are given their ordinary and customary meaning as would be
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`understood by one of ordinary skill in the art in the context of the entire
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`disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
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`2007).
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`Petitioner proposes constructions for the following claim terms:
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`“entity,” “non-negotiable credits,” and “entity independent funds,” which are
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`recited at least in independent claims 1, 9, 17, and 25. Pet. 6–8. At this
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`juncture, Patent Owner does not challenge Petitioner’s proposed claim
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`constructions. Prelim. Resp. 13–14.
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`We have reviewed Petitioner’s proposed constructions and determine
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`that they are consistent with the broadest reasonable construction. For
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`purposes of this Decision, we adopt the following claim constructions:
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`Claim Term
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`Construction
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`entity
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`non-negotiable credits
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`entity independent
`funds
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`an organization that has a rewards program for a
`consumer
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`credits which are accepted only by the granting
`entity of the credits
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`funds acceptable as payment by at least one
`entity different from the original granting entity
`of the non-negotiable credits
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`Patent Owner argues that “commerce partner” recited in independent
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`claims 1, 9, 17, and 25 means “an entity that is an independent entity from
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`another entity, and associated with that other [entity] in some commercial
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`activity.” Prelim. Resp. 14. In addition, Patent Owner argues that
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`“commerce partner” requires a direct link between the claimed entity and the
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`commerce partner insofar as the claims are concerned. Id. at 35 (arguing
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`that the claims preclude an intermediary between different loyalty
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`programs). However, there is nothing in the term “commerce partner” that
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`requires a direct link between the claimed entity and commerce partner.
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`Moreover, the Specification of the ’502 patent does not define the term or
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`explain that the entity and the commerce partner must be associated with
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`each other in some commercial activity. For purposes of this Decision, we
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`construe “commerce partner” to mean an individual or group involved in
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`commercial activity.
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`B. Principles of Law
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`A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
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`differences between the claimed subject matter and the prior art are such that
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`the subject matter, as a whole, would have been obvious at the time the
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`invention was made to a person having ordinary skill in the art to which said
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`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
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`(2007). The question of obviousness is resolved on the basis of underlying
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`factual determinations including: (1) the scope and content of the prior art;
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`(2) any differences between the claimed subject matter and the prior art;
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`(3) the level of ordinary skill in the art; and (4) objective evidence of
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`nonobviousness. Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
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`In that regard, an obviousness analysis “need not seek out precise
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`teachings directed to the specific subject matter of the challenged claim, for
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`a court can take account of the inferences and creative steps that a person of
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`ordinary skill in the art would employ.” KSR, 550 U.S. at 418. A prima
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`facie case of obviousness is established when the prior art itself would
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`appear to have suggested the claimed subject matter to a person of ordinary
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`skill in the art. In re Rinehart, 531 F.2d 1048, 1051 (CCPA 1976).
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`The level of ordinary skill in the art is reflected by the prior art of
`
`record. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001);
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`In re GPAC Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995); In re Oelrich,
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`579 F.2d 86, 91 (CCPA 1978).
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`C. Obviousness of Claims over MacLean and Sakakibara
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`Petitioner asserts that claims 1–3, 7–11, 15, and 16 are unpatentable
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`under 35 U.S.C. § 103(a) as obvious over the combination of MacLean and
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`Sakakibara. Pet. 15–30. To support its contentions, Petitioner provides
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`detailed explanations as to how the combination of prior art meets each
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`claim limitation. Id. Petitioner also relies upon a Declaration of
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`Mr. Matthew Calman, who has been retained as an expert witness by
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`Petitioner for the instant proceeding. Ex. 1502.
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`Patent Owner counters that the combination of MacLean and
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`Sakakibara does not render the challenged claims obvious, as the prior art
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`does not describe certain claim limitations and Petitioner fails to provide
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`sufficient rationale to combine the prior art. Prelim. Resp. 15–28, 34–40,
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`43–48, 51.
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`We begin our discussion with a brief summary of MacLean and
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`Sakakibara, and then we address the parties’ arguments.
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`MacLean
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`
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`MacLean describes a system and method for managing and
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`exchanging reward or loyalty points. Ex. 1504 ¶¶ 1, 4. Figure 1 of
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`MacLean is reproduced below.
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`
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`As shown in Figure 1 of MacLean, point management system 100
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`facilitates interactions between customer 110, transaction center 120, and
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`issuers 130a–c. Id. ¶ 40. The system provides a graphical user interface,
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`enabling a customer to exchange reward points from one loyalty program to
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`those of another loyalty program in accordance with an exchange rate. Id.
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`¶¶ 27, 41. Alternatively, the customer may exchange points issued by
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`various loyalty programs into those of a single program, and redeem the
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`post-converted points for the goods or services offered by that single
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`program. Id.
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`Sakakibara
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`Sakakibara describes a point managing system that provides a
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`web-based user interface, allowing a customer to convert the loyalty points
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`of a first business entity into those of a second business entity in accordance
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`with an exchange rate. Ex. 1505, 1:57–2:5, 7:7–10, Fig. 9. Sakakibara
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`discloses that, prior to conversion, the first entity’s loyalty points are
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`redeemable only at the first entity, and the second entity does not accept the
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`points issued from the first entity, as payment for the second entity’s goods
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`or services. Id. at 12:64–13:30. In short, the first entity’s loyalty points,
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`prior to conversion, are non-negotiable.
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`Converting Non-Negotiable Credits
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`Each of independent claims 1 and 9 requires a graphical user interface
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`for converting non-negotiable credits into entity independent funds; and the
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`claims require that, in absence of conversion, “the commerce partner does
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`not accept the non-negotiable credits as payment for goods or services
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`provided by the commerce partner.” Ex. 1501, 6:34–37, 7:38–41. The
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`entity independent funds are required to be negotiable funds (claims 7 and
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`15), and loyalty points of the commerce partner (claims 8 and 16). Id. at
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`7:18–22, 8:14–18.
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`Petitioner asserts that MacLean discloses a graphical user interface
`
`(web pages) for converting points of a loyalty program into those issued by a
`
`different loyalty program in accordance with a conversion rate. Pet. 15
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`(citing Ex. 1504 ¶¶ 1, 17, Figs. 6A–6I). Petitioner relies upon Sakakibara to
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`disclose the concept that, absent conversion, loyalty points are
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`9
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`non-negotiable credits. Id. at 17–18 (citing Ex. 1505, 12:64–13:30).
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`Petitioner also articulates that one with ordinary skill in the art would have
`
`recognized that, in light of Sakakibara, MacLean’s loyalty points, prior to
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`conversion, would have been accepted only by the merchant that issued
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`those points (i.e., non-negotiable), and would not have been accepted by
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`others as payment for their goods or services. Pet. 18.
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`Patent Owner counters that MacLean does not describe negotiable
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`funds. Prelim. Resp. 43, 51. As Petitioner explains, however, MacLean
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`discloses entity independent funds in the form of post-converted points that
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`may be redeemed for goods or services from a commerce partner. Pet. 24
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`(citing Ex. 1504 ¶¶ 2, 9, 41, 57; Ex. 1502 ¶¶ 85–87). Indeed, MacLean
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`discloses that, upon exchanging points issued from American Airlines for
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`those of American Express Card, the user may redeem the post-converted
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`points from American Express Card. Ex. 1504 ¶ 41. Mr. Calman testifies
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`that the American Express Card points are redeemable for purchases,
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`“including a certificate with various merchants, products from a catalog, or
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`airline miles.” Ex. 1502 ¶ 87. As such, Petitioner has shown adequately that
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`MacLean’s post-converted points are negotiable funds.
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`Patent Owner alleges that, because there are significant differences
`
`between MacLean and Sakakibara, one of ordinary skill in the art would not
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`have combined the references. Prelim. Resp. 26–29. Patent Owner also
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`argues that Petitioner fails to provide a rationale for combining MacLean
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`and Sakakibara, in that the Background Section of MacLean teaches away
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`from MacLean’s disclosed invention. Id. at 24–25.
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`10
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`On this record, we are not persuaded by Patent Owner’s arguments.
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`“It is well-established that a determination of obviousness based on
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`teachings from multiple references does not require an actual, physical
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`substitution of elements.” In re Mouttet, 686 F.3d 1322, 1332 (Fed. Cir.
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`2012) (citing In re Etter, 756 F.2d 852, 859 (Fed. Cir. 1985) (en banc)
`
`(noting that the criterion for obviousness is not whether the references can
`
`be combined physically, but whether the claimed invention is rendered
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`obvious by the teachings of the prior art as a whole)). As Petitioner points
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`out, it was well known in the art that loyalty points, prior to conversion, are
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`non-negotiable credits, as evidenced by Sakakibara. Pet. 17–18 (citing
`
`Ex. 1505, 12:64–13:30). The testimony of Mr. Calman supports Petitioner’s
`
`position. See Ex. 1502 ¶¶ 56, 99, 142, 172. Patent Owner does not explain
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`sufficiently why one of ordinary skill would not have recognized, in light of
`
`Sakakibara, that MacLean’s loyalty points, prior to conversion, are non-
`
`negotiable credits.
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`Moreover, a reference does not teach away if it merely expresses a
`
`general preference for an alternative invention but does not “criticize,
`
`discredit, or otherwise discourage” investigation into the invention claimed.
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`In re Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004). The Background
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`Section of MacLean discusses a number of existing web services for
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`converting the points from a single loyalty program for negotiable credits.
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`Ex. 1504 ¶¶ 2–12. MacLean’s disclosed invention provides additional
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`improvements to those services by allowing users to accumulate or convert
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`the points from various loyalty programs into those of a single program. Id.
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`11
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`¶ 41. Therefore, we do not discern that the Background Section of MacLean
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`criticizes, discredits, or otherwise discourages investigation into MacLean’s
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`disclosed invention.
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`Given the evidence before us, we determine that Petitioner has
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`articulated a rationale to combine MacLean and Sakakibara, and
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`demonstrated sufficiently that the combination would have rendered the
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`aforementioned “non-negotiable credits” limitations obvious.
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`Commerce Partner
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`Each of claims 1 and 9 recites “wherein the entity independent funds
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`are accepted by a commerce partner as at least partial payment for goods or
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`services provided by the commerce partner, wherein the commerce partner is
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`not said entity.” Ex. 1501, 6:30–33, 7:34–41. Patent Owner contends that
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`MacLean does not disclose a commerce partner. Prelim. Resp. 35, 43–44.
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`In particular, Patent Owner argues that the claim term “commerce partner,”
`
`as defined by the claims, is independent from the entity and is associated
`
`with the entity in a commercial activity. Id. Patent Owner alleges that,
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`because MacLean’s transaction center functions as a communication
`
`intermediary, its loyalty point conversions are effectively “open market”
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`transactions. Id.
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`Nothing in the claims, however, precludes an intermediary to
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`coordinate between the claimed entity and commerce partner. In fact, as
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`discussed above, we construe the claim term “commerce partner” to mean an
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`individual or group involved in some commercial activity, and conclude that
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`a direct link between the claimed entity and commerce partner is not
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`required. As Petitioner explains, MacLean provides several examples of a
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`commerce partner. Pet. 16–18, 20–21, 26–27 (citing Ex. 1504 ¶¶ 41, 64).
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`Indeed, MacLean’s system allows a user to exchange loyalty points issued
`
`from one business for those of another business (a commerce partner), as
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`both businesses agree to participate in the exchange. Ex. 1504 ¶ 41. On this
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`record, we are persuaded that Petitioner has demonstrated sufficiently that
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`the combination of MacLean and Sakakibara describes a commerce partner
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`as required by the claims.
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`Graphical User Interface
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`Patent Owner argues that, because MacLean’s system requires a
`
`two-stage process that takes 24–72 hours, the system does not display:
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`(1) a quantity of available entity independent funds, as required by claims 1
`
`and 9, and (2) a second quantity of non-negotiable credits, as required by
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`claims 2 and 11. Prelim. Resp. 35–39, 44–48. As to claim 3, Patent Owner
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`alleges that MacLean does not disclose a confirmation selector, because
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`MacLean’s “submit” button is actually the conversion option that triggers
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`the two-stage conversion process. Id. at 39–40.
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`We are not persuaded by Patent Owner’s arguments. First, they are
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`not commensurate with the claim scope, as nothing in these claims requires
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`the quantities or a confirmation selector to be displayed after the processing
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`has finished completely. Rather, the claims merely require the quantities
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`and confirmation selector to be displayed in response to the exchange
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`selection (claims 1–3), or “processing the selection to effectuate changes in
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`the [web] pages” (claims 9 and 11).
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`Furthermore, Patent Owner’s arguments narrowly focus on
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`MacLean’s embodiment that uses a batch protocol, collecting exchange
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`requests from a plurality of customers and periodically sending a file to each
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`issue server. See Ex. 1504 ¶ 51. In fact, in another embodiment disclosed
`
`by MacLean, the transaction server makes direct calls to each issuer server
`
`via a real time protocol. Id. ¶¶ 51, 53. Therefore, at this stage of the
`
`proceeding, we are persuaded that one of ordinary skill in the art would have
`
`recognized that MacLean’s process, using a real time protocol, would not
`
`have taken 24–72 hours, as alleged by Patent Owner.
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`As Petitioner explains, MacLean discloses that, in response to the
`
`user’s exchange selection, the system processes the selection to effectuate
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`changes in the web pages. Pet. 22, 28–29 (citing Ex. 1504 ¶ 52). Notably,
`
`after the user clicks “continue xchange” button 648 (shown in Figure 6E),
`
`the system displays a series of web pages to process the exchange (shown in
`
`Figures 6F–6H), including an option to confirm the exchange selection (a
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`confirmation selector, as required by claim 3)—“submit” button 678 shown
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`in Figure 6H. Ex. 1504 ¶ 52. Once the user confirms the selection by
`
`clicking on “submit” button 678, the system displays a web page that
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`summarizes the point balance. Id.
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`Figure 6I of MacLean is reproduced below (with annotation added).
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`
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`As illustrated in Figure 6I, web page 680 indicates that the user’s
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`account has been updated (683), and displays: (1) confirmation number 682,
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`(2) a quantity of entity independent funds after the exchange 688 (as
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`required by claims 1 and 9), and (3) a quantity of non-negotiable credits
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`available after the exchange 688 (as required by claims 2 and 11). Id. ¶ 52.
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`Given the evidence before us, we are persuaded that Petitioner has
`
`shown sufficiently that the combination of MacLean and Sakakibara would
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`have rendered the “graphical user interface” claim features obvious.
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`Conclusion
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`For the foregoing reasons, we determine that Petitioner has
`
`demonstrated a reasonable likelihood of prevailing on its assertions that
`
`claims 1–3, 7–11, 15, and 16 are unpatentable over the combination of
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`MacLean and Sakakibara.
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`D. Obviousness over MacLean, Sakakibara, and Postrel
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`Petitioner asserts that claims 4–6, 12–14, and 17–30 are unpatentable
`
`under 35 U.S.C. § 103(a) as obvious over the combination of MacLean,
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`Sakakibara, and Postrel. Pet. 30–58. Except for “computer” features—
`
`program instructions, processors, and storage devices storing program
`
`instructions—Petitioner asserts that, for the same reasons presented with
`
`respect to claims 1 and 9, the combination of prior art renders claims 17 and
`
`25 obvious. Pet. 31. Patent Owner, at this juncture, does not challenge
`
`Petitioner’s assertion that the prior art discloses the “computer” features.
`
`Prelim. Resp. 18. In fact, Patent Owner confirms that MacLean’s computer
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`inherently includes a processor and memory. Id.
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`Patent Owner also relies upon the arguments presented in connection
`
`with independent claims 1–3 and 7–9. Id. at 51–52. In our analysis above,
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`we have considered those arguments, including the arguments concerning
`
`Petitioner’s rationale to combine MacLean and Sakakibara, and we have
`
`concluded that Patent Owner’s arguments are unavailing.
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`As to claims 4–6, 12–14, 20–22, 26, 27, and 30, Patent Owner argues
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`that the prior art does not disclose certain e-commerce interface limitations,
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`and Petitioner fails to articulate a rationale to combine the references.
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`Prelim. Resp. 15–24, 29–34, 40–43, 48–52. We begin our discussion below
`
`with a brief summary of Postrel, and then address the parties’ arguments.
`
`Postrel
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`Postrel discloses a system in which a user may redeem reward or
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`loyalty points earned with a merchant or with another merchant through an
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`exchange network. Ex. 1503, Abstract. The user additionally may
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`aggregate loyalty points from various merchants into a central exchange
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`account, and then redeem the post-converted points for goods or services
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`from any approved merchant on the network. Id. ¶¶ 10, 45–50. In short,
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`Postrel’s system integrates a user interface for exchanging and redeeming
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`loyalty points, with an e-commerce interface. Id.
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`E-Commerce Interface
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`Each of claims 4, 12, 20, and 26 recites “wherein the graphical user
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`interface is an e-commerce interface through which goods or services
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`provided by the commerce partner are able to be purchased.” See, e.g.,
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`Ex. 1501, 7:3–6. The interface is required to include an on-line shopping
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`web site (claims 6, 14, 22, and 27), and provide payment options, including
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`paying using a credit card or the points converted from non-negotiable
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`credits (claims 5, 13, 21, and 30). See, e.g., id. at 7:9–17.
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`Petitioner relies upon Postrel to disclose an e-commerce interface
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`(a web site) that provides on-line shopping capabilities (e.g., in the form of a
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`VISA catalog), in which a customer may purchase the commerce partner’s
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`goods or services with different payment options, including paying with a
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`credit card or loyalty points. Pet. 33–42, 48–50, 55–58 (citing Ex. 1503
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`¶¶ 26, 49, 50, 71). According to Petitioner, it would have been obvious, in
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`light of Postrel, to add such an e-commerce interface to MacLean’s system
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`to allow users to purchase the goods or services from the commerce partner
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`using a credit card or the post-converted points, because it “would provide
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`users with greater convenience and an immediate mechanism to be able to
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`redeem loyalty points using online shopping.” Pet. 34; see id. at 33–35, 37.
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`Patent Owner counters that MacLean does not disclose a commerce
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`partner and MacLean’s web site does not permit commerce partner’s goods
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`or services to be purchased. Prelim. Resp. 40–43, 48–52. Patent Owner also
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`argues that Postrel does not convert non-negotiable credits to negotiable
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`funds, as Postrel’s loyalty points are negotiable. Id. at 41.
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`We are not persuaded by Patent Owner’s arguments. As we discussed
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`above, MacLean provides several examples of a commerce partner.
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`Ex. 1504 ¶¶ 11, 41, 64. Patent Owner’s arguments also conflate loyalty
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`points before conversion (non-negotiable) with those after conversion
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`(negotiable). Notably, Patent Owner’s argument that Postrel’s points are
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`negotiable is predicated improperly on Postrel’s discussions regarding post-
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`converted points, and how the exchange system can be configured to allow
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`users to convert their points.
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`Postrel recognizes that, absent an exchange system, redeeming loyalty
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`points is restricted to goods or services of the entity that issued the points.
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`Ex. 1503 ¶¶ 5, 41. As Petitioner points out, it was well known in the art that
`
`loyalty points, prior to conversion, are non-negotiable credits, as evidenced
`
`by Sakakibara. Pet. 17–18 (citing Ex. 1505, 12:64–13:30). This is
`
`consistent with the description in the ’502 patent regarding the state of the
`
`art at the time of the invention, which indicates that “[e]ntities often reward
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`consumers for utilizing their services with non-negotiable credits, such as
`
`frequent flier miles, consumer loyalty points, and entertainment credits.”
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`Ex. 1501, 1:20–24 (emphases added). Therefore, at this stage of the
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`proceeding, we are persuaded that one of ordinary skill in the art would have
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`recognized that Postrel’s loyalty points, prior to conversion, are
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`non-negotiable.
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`Patent Owner also alleges that the combination of MacLean and
`
`Postrel is improper, in that MacLean cannot function unless each loyalty
`
`program establishes a deposit and withdrawal value, whereas Postrel relies
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`upon one loyalty program network operator and one valuation of points.
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`Prelim. Resp. 15–18. Patent Owner, however, fails to consider the
`
`combination of references, as a whole, and narrowly focuses only on certain
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`statements disclosed in each reference. One with ordinary skill in the art is
`
`not compelled to follow blindly the teaching of one prior art reference over
`
`the other without the exercise of independent judgment. Lear Siegler, Inc. v.
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`Aeroquip Corp., 733 F.2d 881, 889 (Fed. Cir. 1984); see also KSR, 550 U.S.
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`at 420–21 (A person with ordinary skill in the art is “a person of ordinary
`
`creativity, not an automaton,” and “in many cases . . . will be able to fit the
`
`teachings of multiple patents together like pieces of a puzzle.”).
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`Notably, both MacLean and Postrel utilize exchange rates for
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`converting the loyalty points of an entity into those of a commerce partner.
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`Ex. 1503 ¶ 45 (“When the purchaser utilizes the exchange server for
`
`aggregating his or her loyalty points from various merchants, exchange rates
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`may be set . . .”); Ex. 1504 ¶ 52 (“In step 510, the customer selects the
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`depositing LP and clicks on ‘calculate advanced exchange’ button 634. Step
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`511 calculates the exchange rates for this points transaction and displays
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`page 640, a summary of the withdrawal and deposit points, as illustrated in
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`Fig. 6E.”). Moreover, both MacLean and Postrel utilize an exchange server,
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`enabling users to exchange loyalty points from various merchants for those
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`of a single account. Ex. 1503 ¶¶ 45–47, 59; Ex. 1504 ¶¶ 51–52.
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`As Petitioner explains, MacLean provides greater detail regarding a
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`web interface for viewing the loyalty points balance, whereas Postrel
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`discloses greater detail concerning an e-commerce interface with on-line
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`shopping capabilities and different payment options. Pet. 31, 33–34. Given
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`the evidence before us, we determine that Petitioner has demonstrated
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`sufficiently that it would have been obvious, in light of Postrel, to add such
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`an e-commerce interface to MacLean’s system, allowing users to purchase
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`the goods or services from the commerce partner using the post-converted
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`points. See KSR, 550 U.S. at 417 (“If a technique has been used to improve
`
`one device, and a person of ordinary skill in the art would recognize that it
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`would improve similar devices in the same way, using the technique is
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`obvious unless its actual application is beyond his or her skill.”).
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`Given the evidence before us, we are persuaded that Petitioner has
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`demonstrated sufficiently that the combination of MacLean, Sakakibara, and
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`Postrel would have rendered the “e-commerce interface” limitations
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`obvious.
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`Conclusion
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`For the foregoing reasons, we determine that Petitioner has
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`demonstrated a reasonable likelihood of prevailing on its assertions that
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`claims 4–6, 12–14, and 17–30 are unpatentable over the combination of
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`MacLean, Sakakibara, and Postrel.
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`III. CONCLUSION
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`For the foregoing reasons, we determine that the information
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`presented in the Petition establishes that there is a reasonable likelihood that
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`Petitioner would prevail in challenging claims 1–30 of the ’502 patent.
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`At this juncture, we have not made a final determination with respect to the
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`patentability of the challenged claims, nor with respect to claim
`
`construction.
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`For the foregoing reasons, it is
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`IV. ORDER
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`ORDERED that pursuant to 35 U.S.C. § 314(a), an inter partes
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`review is hereby instituted for the following grounds of unpatentability:
`
`Claims
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`Basis
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`References
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`1–3, 7–11, 15, and 16
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`§ 103(a)
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`MacLean and Sakakibara
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`4–6, 12–14, and 17–30 § 103(a)
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`MacLean, Sakakibara, and Postrel
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`FURTHER ORDERED that no other ground of unpatentability
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`asserted in the Petition is authorized for this inter partes review; and
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`FURTHER ORDERED that pursuant to 35 U.S.C. § 314(c) and
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`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial; the trial
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`will commence on the entry date of this decision.
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`IPR2015-00133
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`PETITIONERS:
`
`Robert Fischer
`AskeladdenIPR@fchs.com
`
`Frank DeLucia
`AskeladdenIPR@fchs.com
`
`Stephen Yam
`AskeladdenIPR@fchs.com
`
`Justin Oliver
`joliver@fchs.com
`
`
`
`
`PATENT OWNER:
`
`Brian Buchheit
`bbuchheit@gmail.com
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