`Tel: 571-272-7822
`
`Paper 17
`Entered: October 2, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`COMPASS BANK, AMERICAN EXPRESS COMPANY, AMERICAN
`EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
`DISCOVER FINANCIAL SERVICES, DISCOVER BANK, DISCOVER
`PRODUCTS INC., AND STATE FARM MUTUAL AUTOMOBILE
`INSURANCE COMPANY,
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`
`Case CBM2015-00101
`Patent 6,105,013
`
`
`
`
`
`
`
`
`
`Before TREVOR M. JEFFERSON, MITCHELL G. WEATHERLY, and
`KERRY BEGLEY, Administrative Patent Judges.
`
`WEATHERLY, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
`
`Page 1 of 28
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`Exhibit 1010
`
`
`
`CBM2015-00101
`Patent 6,105,013
`
`A. Background
`
`I.
`
`INTRODUCTION
`
`Compass Bank, American Express Company, American Express
`
`Travel Related Services Company, Inc., Discover Financial Services,
`
`Discover Bank, Discover Products Inc., and State Farm Mutual Automobile
`
`Insurance Company (collectively “Petitioner”)1 filed a Petition (Paper 1,
`
`“Pet.”) requesting a covered business method patent review (“CBM review”)
`
`of claims 1–16 of U.S. Patent No. 6,105,013 (Ex. 1001, “the ’013 patent”)
`
`pursuant to section 18 of the Leahy-Smith America Invents Act (“AIA”).
`
`Maxim Integrated Products, Inc. (“Patent Owner”) filed a Preliminary
`
`Response. Paper 15 (“Prelim. Resp.”). We authorized, and Petitioner filed,
`
`a Reply to Patent Owner’s Preliminary Response. Paper 16 (“Reply”).
`
`With its Preliminary Response, Patent Owner provided evidence that
`
`it filed with the Office a statutory disclaimer of claims 7, 14, and 16 of the
`
`’013 patent, pursuant to 37 C.F.R. § 1.321(a). See Prelim. Resp. 2;
`
`Ex. 2003. Accordingly, pursuant to 37 C.F.R. § 42.207(e), no post grant
`
`review will be instituted based on disclaimed claims 7, 14, and 16.
`
`For remaining claims 1–6, 8–13, and 15 (the “challenged claims”), we
`
`may not institute a CBM review “unless the Director2 determines that the
`
`information presented in the petition . . . , if such information is not rebutted,
`
`
`1 The Petition also lists Navy Federal Credit Union (“NFCU”) as a
`petitioner. Pet. 1. NFCU and Patent Owner subsequently filed a joint
`motion to terminate NFCU’s participation in the case, and we granted the
`motion. Paper 12.
`2 “The Board institutes the trial on behalf of the Director.” 37 C.F.R.
`§ 42.4(a).
`
`2
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`Page 2 of 28
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`
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`CBM2015-00101
`Patent 6,105,013
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`would demonstrate that it is more likely than not that at least 1 of the claims
`
`challenged in the petition is unpatentable.” 35 U.S.C. § 324(a); see
`
`37 C.F.R. § 42.208.
`
`Petitioner contends that claims 1–6, 8–13, and 15 are unpatentable
`
`under 35 U.S.C. § 103 based on the following grounds (Pet. 29–79):
`
`Reference[s]
`
`Basis Claim[s] challenged
`
`Sudia3
`
`Hawkes4
`
`§ 103 1–4, 6, 8–12, and 15
`
`§ 103 1–4, 6, 8–12, and 15
`
`Hawkes and/or Sudia alone or in
`combination with Axelson5 and/or Lancaster6
`
`§ 103 5
`
`Sudia and/or Hawkes in combination with
`Lee7
`
`§ 103 13
`
`For the reasons stated below, we institute a CBM review of claims 1–6, 8–
`
`13, and 15.
`
`
`3 U.S. Patent No. 5,799,086 (Aug. 25, 1998) (“Sudia”) (Ex. 1005).
`4 INTEGRATED CIRCUIT CARDS, TAGS AND TOKENS (Peter Hawkes, Donald
`Davies, W.L. Price, eds. 1990) (“Hawkes”) (Ex. 1006).
`5 JAN AXELSON, THE MICROCONTROLLER IDEA BOOK (1994) (“Axelson”)
`(Ex. 1007).
`6 Don Lancaster, A Flying Car Newsletter; Photopolymer Resources;
`Amateur Television Books; Royalty-Free Real PostScript!; BASIC Stamp
`Microcontroller, 4 HARDWARE HACKER 66 (July 1993) (“Lancaster”)
`(Ex. 1008).
`7 U.S. Patent No. 5,210,846 (May 11, 1993) (“Lee”) (Ex. 1009).
`
`3
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`Page 3 of 28
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`CBM2015-00101
`Patent 6,105,013
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`B. Related Proceedings
`
`Patent Owner has asserted the ’013 patent against all Petitioners
`
`except Discover Products Inc. (“DPI”) in the U.S. District Court for the
`
`Western District of Texas. Pet. 1; see Paper 6, 2. In addition, Patent Owner
`
`has asserted the patent against numerous other defendants in more than thirty
`
`cases filed in various district courts. See Paper 6, 1–7; Pet. 1–3.
`
`The ’013 patent also has been involved in several proceedings before
`
`the Office. More specifically, the patent was the subject of two previous
`
`petitions for CBM review filed by different sets of petitioners. Paper 6, 3.
`
`First, in CBM2014-00040, the Board determined that 35 U.S.C. § 325(a)(1)
`
`precluded institution of review, because one of the petitioners had filed a
`
`civil action challenging the validity of claims of the ’013 patent before filing
`
`the petition. PNC Bank, N.A. v. Maxim Integrated Prods., Inc., Case
`
`CBM2014-00040 (PTAB June 3, 2014) (Paper 19). Second, in CBM2014-
`
`00178, the Board terminated the proceeding pursuant to settlement. JP
`
`Morgan Chase & Co. v. Maxim Integrated Prods., Inc., Case CBM2014-
`
`00178 (PTAB Feb. 26, 2015) (Paper 14).
`
`C. The ’013 Patent
`
`The ’013 patent relates to an apparatus or “module” for “secure
`
`transactions” that may be configured to provide “secure data transfers,
`
`digital signatures or to authorize monetary transactions.” Ex. 1001, 1:26–28,
`
`1:48–67, 7:62–12:34. The claims are directed to a “secure transaction
`
`integrated circuit.” Id. at 30:36–32:26. Claims 1 and 9 are the independent
`
`claims among the challenged claims. Claim 9 is illustrative and recites:
`
`9. A secure transaction integrated circuit comprising:
`
`a microcontroller core;
`
`4
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`Page 4 of 28
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`CBM2015-00101
`Patent 6,105,013
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`a memory circuit, in communication with said microcontroller
`core, for storing a transaction program;
`
`a modular exponentiation accelerator circuit, in communication
`with said microcontroller core, for performing encryption
`and decryption calculations;
`
`an input/output circuit, in communication with said
`microcontroller core, for receiving and transmitting data
`information with another electronic device; and
`
`a clock circuit for measuring time and providing time stamp
`information responsive to functions being performed by said
`microcontroller core.
`
`Id. at 31:13–26.
`
`We refer to the colorized version of Figure 1 from the ’013 patent,
`
`reproduced below as colorized in the Petition, in describing the claimed
`
`apparatus.
`
`
`
`5
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`Page 5 of 28
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`CBM2015-00101
`Patent 6,105,013
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`A colorized version of Figure 1 of the ’013 patent is a block
`diagram of the hardware components comprising the claimed
`apparatus.
`
`See Pet. 5.
`
`Module 10 includes input/output circuit 26 (orange),
`
`microprocessor 12 (magenta), coprocessor 18 (red), real time clock 14
`
`(green), memory 20 (teal), including NVRAM 24 and ROM 22, and energy
`
`circuitry 34 (brown). Ex. 1001, 2:34–42, 3:21–30. Module 10 can be used
`
`as a digital cash dispenser, which can be replenished with cash, and can
`
`transfer cash to another module. Id. at 7:63–12:34. For example, a
`
`merchant may place a random number in a packet and then transmit the
`
`packet, along with an amount of a purchase, to module 10. Id. at 9:40–44.
`
`During transactions, module 10 encrypts and decrypts a packet or certificate
`
`that is exchanged with the merchant. Id. at 9:40–60. A transaction’s
`
`certificate contains data describing the transaction, such as when the
`
`transaction took place via a “true-time stamping” function. Id. at 30:12–25.
`
`II. ANALYSIS
`
`A. Claim Interpretation
`
`In a CBM review, “[a] claim in an unexpired patent shall be given its
`
`broadest reasonable construction in light of the specification of the patent in
`
`which it appears.” 37 C.F.R. § 42.300(b); see also In re Cuozzo Speed
`
`Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir. 2015) (“We conclude that
`
`Congress implicitly approved the broadest reasonable interpretation standard
`
`in enacting the AIA.”). When applying that standard, we interpret the claim
`
`language as it would be understood by one of ordinary skill in the art in light
`
`of the specification. In re Suitco Surface, Inc., 603 F.3d 1255, 1260 (Fed.
`
`Cir. 2010). Thus, we give claim terms their ordinary and customary
`
`6
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`meaning. See In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
`
`2007) (“The ordinary and customary meaning is the meaning that the term
`
`would have to a person of ordinary skill in the art in question.” (internal
`
`quotation marks omitted)).
`
`Petitioner proposes interpretations for “secure transaction integrated
`
`circuit” (claims 1 and 9), “modular exponentiation accelerator circuit”
`
`(claim 9), “script programming language” (claim 5), and “transaction
`
`groups” (claim 11). Pet. 22–28. Patent Owner comments only on
`
`Petitioner’s proposed interpretation of “transaction groups” and informs us
`
`that a district court has interpreted “transaction groups” differently than
`
`Petitioner. See Prelim. Resp. 59–60.
`
`Patent Owner also argues that we should apply the claim construction
`
`standard outlined in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)
`
`(en banc), rather than the broadest reasonable interpretation standard,
`
`applicable to unexpired patents pursuant to 37 C.F.R. § 42.300(b). Prelim.
`
`Resp. 53–59. According to Patent Owner, the ’013 patent “will expire on
`
`January 30, 2016,” “months before any final written decision” in this case.
`
`Id. at 54. Patent Owner, therefore, reasons that the Phillips standard will
`
`apply to any final written decision. See id. at 54–56. Patent Owner argues
`
`that applying the broadest reasonable interpretation standard at institution
`
`but the Phillips standard in the final written decision would be contrary to
`
`35 U.S.C. § 324, improperly favor institution, and waste resources of the
`
`Board and the parties. Id. at 55–59. Moreover, Patent Owner asserts that
`
`the broadest reasonable interpretation standard “is based on Patent Owner’s
`
`right to add to or amend the claims of an unexpired patent” and, thus,
`
`“relinquishment of that right should be substantial enough to eliminate that
`
`7
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`support.” Id. at 55. Patent Owner represents that it “disclaims and
`
`relinquishes any remaining right it has to add or amend the remaining claims
`
`of the patent (other than statutory disclaimer).” Id.
`
`At this time, the ’013 patent is not expired. See id. at 54. Under
`
`37 C.F.R. § 42.300(b), the Board interprets a “claim in an unexpired patent”
`
`using the “broadest reasonable construction in light of the specification of
`
`the patent in which it appears.” 37 C.F.R. § 42.300(b).8 In Cuozzo, the
`
`Federal Circuit held that Congress “implicitly approved the broadest
`
`reasonable interpretation standard in enacting the AIA” and that the Office
`
`“properly adopted” the standard by regulation. Cuozzo, 793 F.3d at 1278–
`
`79.
`
`In effect, Patent Owner asks us to use our authority under 37 C.F.R.
`
`§ 42.5(b) to “waive or suspend” 37 C.F.R. § 42.300(b). Even assuming that
`
`we have the authority to do so, we decline to do so in this case. Patent
`
`Owner has not argued that the construction of any claim term would
`
`materially change depending on whether we apply the broadest reasonable
`
`interpretation standard or the Phillips standard. Therefore, Patent Owner has
`
`not provided any convincing or compelling reason to alter the claim
`
`construction standard applicable to unexpired patents under our governing
`
`regulation. Particularly under these circumstances, we are not persuaded
`
`that Patent Owner can opt out of the broadest reasonable interpretation
`
`
`8 The Office recently proposed an amendment to 37 C.F.R. § 42.300(b),
`which would address Patent Owner’s argument regarding the claim
`construction standard. Amendments to the Rules of Practice for Trials
`Before the Patent Trial and Appeal Board; Proposed Rules, 80 Fed. Reg.
`50,720, 50,722, 50,743 (Aug. 20, 2015) (“Proposed Rules”). The
`amendment, however, is merely proposed and is not in effect.
`
`8
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`standard, applicable to unexpired patents, by declaring that it has decided not
`
`to take advantage of the opportunity to amend that is afforded to it in a CBM
`
`review. See Proposed Rules, 80 Fed. Reg. at 50,722 (declining to adopt
`
`suggestion “[t]o allow the patent owner unilaterally to decide to forego any
`
`opportunity to amend after a petition has been filed, and thereby opt-in to a
`
`Phillips-type construction”).
`
`Accordingly, for purposes of this decision, we apply the broadest
`
`reasonable interpretation standard pursuant to 37 C.F.R. § 42.300(b). If the
`
`’013 patent expires before we issue a final written decision in this case, we
`
`will apply the claim construction standard outlined in Phillips in any final
`
`written decision. Therefore, in future briefing, the parties should address
`
`any differences between the proper construction of any relevant claim term
`
`under the broadest reasonable interpretation and the Phillips standard.
`
`Patent Owner does not address the manner in which any of the
`
`asserted prior art compares to any limitation recited in the challenged claims.
`
`We determine that none of the phrases addressed by the parties requires an
`
`express interpretation to resolve the issues currently presented in the asserted
`
`patentability challenges. Therefore, we do not interpret these phrases
`
`expressly at this stage of the proceeding.
`
`B. Petitioner’s Standing
`
`To have standing, Petitioner must show that: (1) “the patent for which
`
`review is sought is a covered business method patent,” and (2) Petitioner
`
`“meets the eligibility requirements of § 42.302.” 37 C.F.R. § 42.304(a).
`
`1. Requirements of 37 C.F.R. § 42.302
`
`Petitioner asserts that it satisfies both requirements in 37 C.F.R.
`
`§ 42.302. Pet. 8. First, Petitioner represents that all Petitioners except DPI
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`9
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`“ha[ve] been sued for infringement” of the ’013 patent and that DPI’s real
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`party-in-interest and privy “has been sued for infringement” of the patent,
`
`thereby satisfying 37 C.F.R. § 42.302(a). Id.; 37 C.F.R. § 42.302(a).
`
`Second, Petitioner represents that it is not “estopped from challenging the
`
`claims on the grounds identified” in the Petition, as required under 37 C.F.R.
`
`§ 42.302(b). Pet. 8; 37 C.F.R. § 42.302(b). Patent Owner does not dispute
`
`these assertions. We are persuaded that Petitioner meets the eligibility
`
`requirements of 37 C.F.R. § 42.302.
`
`2. Whether the’013 Patent Is a Covered Business Method Patent
`
`Section 18(d)(1) of the AIA defines a “covered business method
`
`patent” as “a patent that claims a method or corresponding apparatus for
`
`performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service, except that
`
`the term does not include patents for technological inventions.” In
`
`determining whether a patent is eligible for review as a covered business
`
`method patent, the focus is on the claims. See 37 C.F.R. § 42.301;
`
`Transitional Program for Covered Business Method Patents—Definitions of
`
`Covered Business Method Patent and Technological Invention; Final Rule,
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”). One claim
`
`directed to a covered business method is sufficient to render the patent
`
`eligible for review. CBM Rules, 77 Fed. Reg. at 48,736.
`
`a) Financial Product or Service
`
`The legislative history of the AIA indicates that “‘financial product or
`
`service’ should be interpreted broadly.” Id. at 48,735 (response to comment
`
`1). Specifically, the legislative history “explains that the definition of
`
`covered business method patent was drafted to encompass patents ‘claiming
`
`10
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`activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity.’” Id. (quoting 157 Cong. Rec. S5432
`
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`
`Petitioner argues that the claims of the ’013 patent, together with the
`
`financial embodiments disclosed in the Specification and Patent Owner’s
`
`assertion of the patent against numerous financial institutions, demonstrate
`
`that the patent relates to a financial product or service. See Pet. 8–13 (citing
`
`Ex. 1001, Abstract, 1:26–29, 4:63–64, 7:62–14:50).
`
`As an initial matter, we address Patent Owner’s argument that its
`
`statutory disclaimer of claims 7, 14, and 16 of the ’013 patent, after the
`
`Petition was filed, is dispositive of whether Petitioner has shown that the
`
`patent satisfies the financial product or service requirement. See Prelim.
`
`Resp. 8–12. Specifically, Patent Owner asserts that we must treat the
`
`’013 patent as though disclaimed claims 7, 14, and 16 never existed, and
`
`Petitioner argues only that claim 14 meets the financial product or service
`
`requirement, while referring to other claims in a conclusory and unsupported
`
`fashion. Id.
`
`We disagree. Petitioner explicitly argues that “the claims” of the
`
`’013 patent demonstrate that the patent satisfies the financial product or
`
`service requirement. See, e.g., Pet. 11 (“Here, the claims, the specification,
`
`and the patent owner’s litigation history all show the 013 Patent is directed
`
`to a financial product or service.”) (emphasis added). Petitioner also cites
`
`and relies upon numerous passages in the Specification establishing that the
`
`claimed invention is directed to the practice of a financial service. Id. at 12–
`
`13 (citing Ex. 1001, Abstract, 1:26–29, 4:63–64, 7:62–14:50). Therefore,
`
`we understand that Petitioner refers to claim 14 as an example, and that
`
`11
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`Petitioner’s arguments apply more broadly to the subject matter of all claims
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`of the ’013 patent.
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`Accordingly, we consider whether Petitioner has shown that the
`
`remaining claims of the ’013 patent—claims 1–6, 8–13, and 15—
`
`demonstrate that the patent meets the financial product or service
`
`requirement. We are persuaded by Petitioner’s showing that the circuits
`
`recited in independent claims 1 and 9 encompass an apparatus for managing
`
`financial products or delivering financial services, as evidenced by the
`
`financial embodiments disclosed in the Specification. Id.
`
`In particular, Petitioner points to the Abstract of the ’013 patent:
`
`“[T]he present invention relates to an electronic module . . . capable of
`
`passing information back and forth between a service provider’s equipment
`
`via a secure, encrypted technique so that money and other valuable data can
`
`be securely passed electronically.” Pet. 12 (quoting, with emphasis,
`
`Ex. 1001, Abstract). Similarly, Petitioner references the “Technical Field of
`
`the Invention” section of the ’013 patent: “The module can be configured
`
`. . . to authorize monetary transactions.” Pet. 12 (quoting Ex. 1001, 1:26–
`
`29). In addition, Petitioner cites “practical applications of the module”
`
`discussed in the Specification, including “digital cash dispenser,” “digital
`
`cash replenishment,” “direct transfer of funds between modules,” and a
`
`“postal metering service.” Pet. 12–13 (quoting Ex. 1001, 7:62–14:50).
`
`Having reviewed the Petitioner’s arguments and the Specification, we
`
`are persuaded that embodiments involving secure financial transactions,
`
`including payments and deposits, are a central focus of the Specification.
`
`Even Patent Owner concedes that the ’013 patent specification discloses
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`“monetary embodiments.” Prelim. Resp. 28.
`
`12
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`Moreover, we agree with Petitioner that, contrary to Patent Owner’s
`
`assertions, the relationship between the portions of the Specification cited in
`
`the Petition and the claim language—particularly the “secure transaction
`
`integrated circuit” of independent claims 1 and 9—is evident from the
`
`Petition. See Reply 3–4; Pet. 12–13. The cited portions of the Specification,
`
`outlined above, make clear that the “secure transaction integrated circuit”
`
`recited in claims 1 and 9 is intended to be used for secure financial
`
`transactions. The “input/output circuit,” for exchanging the recited
`
`“information” (claim 1) and “data” (claim 9) encompasses circuitry for
`
`exchanging a cash equivalent or monetary value. A claimed circuit that
`
`transfers a cash equivalent or monetary value manages a financial product,
`
`and providing such transfers delivers a financial service. See Gillman v.
`
`StoneEagle Servs., Inc., Case CBM2013-00047, slip op. at 7–8 (PTAB
`
`Feb. 18, 2014) (Paper 11) (holding that processing payment is an “inherently
`
`financial activit[y]”); Apple Inc. v. Sightsound Techs., LLC, Case CBM2013-
`
`00020, slip op. at 11–12 (PTAB Oct. 8, 2013) (Paper 14) (“The electronic
`
`transfer of money is a financial activity, and allowing such a transfer
`
`amounts to providing a financial service.”); 157 Cong. Rec. S5432 (daily ed.
`
`Sept. 8, 2011) (statement of Sen. Schumer) (listing “financial data
`
`processing” and “issuing or accepting stored value or payment instruments”
`
`as examples of financial products).
`
`Patent Owner disputes Petitioner’s assertion that the ’013 patent
`
`satisfies the financial product or service requirement by arguing that
`
`claims 1–6, 8–13, and 15 are not “limited to,” “specifically directed to,” or
`
`“specific to financial products or services.” Prelim. Resp. 26–31. These
`
`arguments, however, overstate the financial product or service requirement.
`
`13
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`To satisfy the definition of a covered business method patent in § 18(d)(1) of
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`the AIA, the patent need only “claim[] a method or corresponding apparatus
`
`for performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service.” AIA,
`
`§ 18(d)(1) (emphases added). Thus, the express statutory language does not
`
`mandate that a claim be limited expressly to a financial product or service.
`
`Instead, it requires only that a claim be “used in the practice, administration,
`
`or management” of such a product or service.
`
`The legislative history further demonstrates that the AIA’s definition
`
`is not as narrow as Patent Owner suggests. Rather, as the Office has
`
`explained, the legislative history of the AIA supports a “broad[]”
`
`interpretation of a “financial product or service.” CBM Rules, 77 Fed. Reg.
`
`at 48,735 (response to comment 1). Specifically, the legislative history
`
`explains that the definition of a covered business method patent was drafted
`
`to encompass “not only patents claiming the financial product or service
`
`itself, but also patents claiming activities that are financial in nature,
`
`incidental to a financial activity or complementary to a financial activity.”
`
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer);
`
`see Prelim. Resp. 6; CBM Rules, 77 Fed. Reg. at 48,735. In other words,
`
`the legislative history indicates that to meet the requirement, the patent must
`
`be “intended to be used in the practice, administration, or management of
`
`financial services or products,” 157 Cong. Rec. S5441 (statement of Sen.
`
`Leahy), but “need not recite a specific financial product or service,” id. at
`
`S5432 (statement of Sen. Schumer). Accordingly, Patent Owner’s
`
`arguments that the ’013 patent claims are not limited expressly to a financial
`
`product or service are unpersuasive.
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`14
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`Finally, we agree with Petitioner that Patent Owner’s assertion of the
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`’013 patent against numerous financial institutions and banks is a factor
`
`weighing in favor of a conclusion that the ’013 patent is “used in the
`
`practice, administration, or management” of financial products or services.
`
`See Pet. 13; Reply 9–10; Bank of the West v. Secure Axcess, LLC,
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`CBM2015-00009, slip op. at 13 (PTAB Apr. 13, 2015) (Paper 21); Paper 6,
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`1–7. Petitioner presents persuasive evidence that at least some of these
`
`allegations are specific to providing “financial products and services” on
`
`mobile banking products or systems. See Ex. 1020, 4.
`
`For the reasons set forth above, we determine that claims 1 and 9 of
`
`the ’013 patent cover an “apparatus for performing data processing or other
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`operations used in the practice, administration, or management of a financial
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`product or service,” as required by the definition of a covered business
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`method patent in § 18(d)(1) of the AIA. See 37 C.F.R. § 42.301(a).
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`b) Technological Invention Exception
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`Patents eligible for CBM review “do[] not include patents for
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`technological inventions.” AIA, § 18(d)(1); accord 37 C.F.R. § 42.301(a).
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`The technological invention exception in the definition of a covered business
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`method patent is not met by “[m]ere recitation of known technologies, such
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`as computer hardware, . . . or specialized machines, such as an ATM or point
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`of sale device,” or “[c]ombining prior art structures to achieve the normal,
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`expected, or predictable result of that combination.” Office Patent Trial
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`Practice Guide, 77 Fed. Reg. 48,756, 48,763–64 (Aug. 14, 2012) (“Trial
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`Practice Guide”). To determine whether a patent is for a technological
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`invention, we consider “whether the claimed subject matter as a whole”: (1)
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`“recites a technological feature that is novel and unobvious over the prior
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`art;” and (2) “solves a technical problem using a technical solution.”
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`37 C.F.R. § 42.301(b); see CBM Rules, 77 Fed. Reg. at 48,736.
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`Regarding the first prong—whether the subject matter as a whole
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`recites a “technological feature that is novel and unobvious over the prior
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`art”—Petitioner contends that each of the technological features recited in
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`the ’013 patent claims was generic, common, and conventional in 1995,
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`when the application that issued as the ’013 patent was filed. Pet. 14–19.
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`Petitioner further argues that the combination of these features merely
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`achieves the normal, expected, and predictable result of the combination. Id.
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`On this record, we agree.
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`The ’013 patent claims recite many technological features including: a
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`microcontroller core, a memory, a modular exponentiation accelerator
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`circuit, an input/output circuit, and a clock circuit. Petitioner proffers
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`testimony from Peter Alexander, Ph.D. supporting its contention that each
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`technological feature recited in the ’013 patent claims was generic and
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`common before the priority date of the ’013 patent, and their combination
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`yields predictable results. Pet. 15 (citing Ex. 1021 ¶ 29).
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`In addition, the Specification refers to these technological features
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`briefly and generally by reference to their function or by commenting that
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`they are selected from known components. See, e.g., Ex. 1001, 2:51–52
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`(“clock circuitry 14 . . . provides a continuously running real time clock”),
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`2:53–57 (“coprocessor will handle the complex mathematics of RSA
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`encryption and decryption”), 2:48–50 (“microprocessor 12 is preferably an
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`8-bit microprocessor, but could be 16, 32, 64, or any operable number of
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`bits”), 3:22–23 (“the module 10 preferably contains a general-purpose,
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`8051-compatible micro controller”), 3:41–45 (“One of ordinary skill will
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`understand that there are many comparable variations of the module design.
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`For example, volatile memory can be used, or an interface other than a one-
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`wire could be used.”). Thus, we are persuaded that the ’013 patent claims
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`recite technological features that were known and conventional at the time of
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`filing in 1995.
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`We are not persuaded by Patent Owner’s arguments to the contrary.
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`Patent Owner contends that the prosecution history of the ’013 patent
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`demonstrates the claims are directed to novel and nonobvious technological
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`features. Prelim. Resp. 33–52. Patent Owner argues that the ’013 patent
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`issued because the applicants amended the claims to include a “clock,”
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`which distinguished the art of record and resulted in allowance of
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`independent claims 1 and 9. Id. at 42–43; Ex. 1002, 220, 222–23, 231–46.
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`But neither the applicants’ arguments for allowance, nor the allowance of
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`the ’013 patent, is “dispositive of the issue before us,” which is “based on a
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`different record than what was before the examiner.” Bloomberg Inc. v.
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`Markets-Alert Pty Ltd., Case CBM2013-00005, slip op. at 7–8 (PTAB Mar.
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`29, 2013) (Paper 18).
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`On the record before us, we are persuaded that combining the known
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`technological features recited in the ’013 patent claims to achieve only
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`“receiving and transmitting encrypted data” is insufficient to render the
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`combination anything but the “normal, expected, or predictable result of that
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`combination.” Trial Practice Guide, 77 Fed. Reg. at 48,764. Accordingly,
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`on this record, we are persuaded the ’013 patent claims are not directed to a
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`novel and nonobvious technological feature. Because we have determined
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`that the ’013 patent does not satisfy the first prong of the analysis for the
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`technological invention exception, the ’013 patent does not fall within this
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`exception.
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`For the reasons given above, we determine that the ’013 patent is
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`eligible for review as a covered business method patent.
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`C. Challenges to the Claims
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`Petitioner challenges the patentability of the challenged claims on the
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`grounds that the claims are obvious in light of various references including:
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`Sudia, Hawkes, Axelson, Lancaster, and Lee. The Supreme Court in KSR
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`International Co. v. Teleflex Inc., 550 U.S. 398 (2007) reaffirmed the
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`framework for determining obviousness as set forth in Graham v. John
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`Deere Co., 383 U.S. 1 (1966). As observed by the Court in KSR, the factual
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`inquiries set forth in Graham that are applied for establishing a background
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`for determining obviousness under 35 U.S.C. § 103(a) are summarized as
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`follows:
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`1. Determining the scope and content of the prior art,
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`2. Ascertaining the differences between the prior art and the claims at
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`issue,
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`3. Resolving the level of ordinary skill in the pertinent art, and
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`4. Considering objective evidence present in the application indicating
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`obviousness or nonobviousness.
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`KSR, 550 U.S. at 406. With these standards in mind, we address each
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`challenge below.
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`1. Obviousness of Claims Based Upon Sudia
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`a) Overview of Sudia
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`Petitioner alleges that Sudia is prior art to the claims of the ’013
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`patent under 35 U.S.C. § 102(e). Pet. 29. Sudia describes a “cryptographic
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`system” allowing portable devices to support electronic transactions.
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`Ex. 1005, Abstract. Petitioner
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`contends that Sudia describes its
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`system in connection with Figure
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`21, which is reproduced at right
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`with colors applied consistently
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`with the conventions used to
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`colorize Figure 1 of the ’013
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`patent in Part I.C above. Pet. 30.
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`Petitioner contends that Sudia
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`describes all the basic elements recited in independent claims 1 and 9,
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`including a microcontroller (purple), cryptographic coprocessor (red),
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`input/output interface (orange), memory (teal), clock (green), and battery
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`(brown). Pet. 30 (citing Ex. 1005, 13:34–60, 37:37–38, 37:66, 38:17–19).
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`The entire system is integrated into a chip small enough to fit inside a
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`telephone. Ex. 1005, 7:43–46, 14:21–26; Ex. 1021 ¶ 63. Sudia’s system
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`includes “the ability to generate a public/private key pair.” Ex. 1005, 13:1–
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`4, 14:66–15:2. Among the types of secure transactions that Sudia’s system
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`can be programmed to perform are “key escrow, digital cash management,
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`car rental or user medical records management” and “management of digital
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`representations of cash or other high-value documents.” Id. at 43:65–44:17,
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`45:24–61.
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`b) Claims 1–4, 6, 8–12, and 15 in View of Sudia
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`Petitioner contends that claims 1–4, 6, 8–12, and 15 are unpatentable
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`as obvious in view of Sudia. Pet. 36–55. Petitioner supports its contention
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`with detailed explanations and claim charts in which it identifies the ways in