throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 16
`Entered: October 7, 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 CBM2015-00102
`Patent 6,237,095 B1
`
`
`
`
`
`
`
`
`
`Before TREVOR M. JEFFERSON, MITCHELL G. WEATHERLY, and
`KERRY BEGLEY, Administrative Patent Judges.
`
`WEATHERLY, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`Page 1 of 25
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION
`Exhibit 1012
`
`

`
`CBM2015-00102
`Patent 6,237,095 B1
`
`I.
`
`INTRODUCTION
`
`A. Background
`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 patent
`review”) of claims 1–8 of U.S. Patent No. 6,237,095 B1 (Ex. 1001, “the
`’095 patent”) pursuant to section 18 of the Leahy-Smith America Invents
`Act (“AIA”). Patent Owner, Maxim Integrated Products, Inc., (“Patent
`Owner”) filed a Preliminary Response. Paper 13 (“Prelim. Resp.”). We
`authorized, and Petitioner filed, a Reply to Patent Owner’s Preliminary
`Response. Paper 14 (“Reply”).
`With its Preliminary Response, Patent Owner provided evidence that
`it filed with the Office a statutory disclaimer of claim 7 of the ’095 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 claim 7.
`For remaining claims 1–6 and 8 (the “challenged claims”), we may
`not institute a CBM patent 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 10.
`2 “The Board institutes the trial on behalf of the Director.” 37 C.F.R.
`§ 42.4(a).
`
`2
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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 also
`37 C.F.R. § 42.208. Based on our review of the record, we conclude that
`Petitioner is more likely than not to prevail with respect to at least one of the
`challenged claims.
`Petitioner contends that the challenged claims are unpatentable under
`35 U.S.C. § 103 based on the following grounds (Pet. 24–77):
`
`References
`Hawkes3 alone or in combination with
`Chaum4 and/or Ciarcia5
`
`Hawkes alone or in combination with
`Brown6 and/or Ingalls7
`
`Basis Claim[s] challenged
`
`§ 103
`
`1, 2, 4–6, and 8
`
`§ 103
`
`3
`
`For the reasons described below, we institute a CBM review of claims 1–6
`and 8.
`B. Related Proceedings
`Patent Owner has asserted the ’095 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 5, 2. In addition, Patent Owner
`
`3 INTEGRATED CIRCUIT CARDS, TAGS AND TOKENS (Peter Hawkes, Donald
`Davies, W.L. Price, eds. 1990) (“Hawkes”) (Ex. 1003).
`4 U.S. Patent No. 5,485,520 (Jan. 16, 1996) (“Chaum”) (Ex. 1004).
`5 Steve Ciarcia, Ciarcia’s Circuit Cellar: Build the BASIC-52
`Computer/Controller, BYTE, Aug. 1985, (“Ciarcia”) (Ex. 1005).
`6 JOHN FORREST BROWN, EMBEDDED SYSTEMS PROGRAMMING IN C AND
`ASSEMBLY (1994) (“Brown”) (Ex. 1006).
`7 Daniel Ingalls, Design Principles Behind Smalltalk, BYTE, Aug. 1981,
`(“Ingalls”) (Ex. 1007).
`
`3
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`has asserted the ’095 patent against numerous other defendants in more than
`thirty cases filed in various district courts. See Paper 5, 1–7; Pet. 1–3.
`The ’095 patent also has been involved in several proceedings before
`the Office. More specifically, the patent was the subject of two previous
`petitions for CBM patent review filed by different sets of petitioners. Paper
`5, 3. First, in CBM2014-00041, 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 ’095 patent
`before filing the petition. PNC Bank, N.A. v. Maxim Integrated Prods., Inc.,
`Case CBM2014-00041 (PTAB June 3, 2014) (Paper 19). Second, in
`CBM2014-00177, the Board terminated the proceeding pursuant to
`settlement. JP Morgan Chase & Co. v. Maxim Integrated Prods., Inc., Case
`CBM2014-00177 (PTAB Feb. 26, 2015) (Paper 14).
`C. The ’095 Patent
`The ’095 patent relates to an apparatus or “module” for transferring
`money or “digital cash” electronically. Ex. 1001, 1:24–29, 1:51–67, 7:65–
`12:34. The claims are directed to an “apparatus for receiving and
`transmitting encrypted data.” Id. at 32:59–34:19. Claim 1, which is the only
`independent claim in the ’095 patent and thus illustrative, recites:
`1. An apparatus for receiving and transmitting encrypted
`data, comprising:
`an input/output interface for receiving a challenge number
`from an electronic device;
`a microprocessor circuit connected to said input/output
`interface;
`a coprocessor circuit, connected to said microprocessor
`circuit;
`
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`a timing circuit connected to the microprocessor, the timing
`circuit for generating a time stamp;
`a first memory connected to said microprocessor circuit, said
`first memory for storing a first data object; and
`a second memory connected to said microprocessor circuit,
`said second memory including instructions readable by
`said microprocessor circuit to thereby cause said
`microprocessor circuit to:
`initiate generation of a certificate, said certificate
`including said challenge number and a second data
`object; and
`adjust said first data object according to said second data
`object responsive to a verification signal from said
`electronic device;
`store a transaction script, the transaction script including
`at least a representation of the time stamp generated
`by the timing circuit.
`Id. at 32:59–33:17.
`We refer to the colorized version of Figure 1 from the ’095 patent,
`reproduced below, in describing the claimed apparatus.
`
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`
`
`A colorized version of Figure 1 of the ’095 patent is a block
`diagram of the hardware components comprising the claimed
`apparatus.
`Pet. 29.
`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). Id. at 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 7:65–12:34. 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 9:41–49. Module 10 receives
`the packet and the amount of the purchase as an input object, and then
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`subtracts the amount of the purchase from a money object. Id. at 9:45–53.
`Finally, module 10 adds additional information to the input object, and sends
`it back to the merchant as a certificate. Id. at 9:52–64. This additional
`information can include a time stamp. Id. at 32:36–44.
`II. ANALYSIS
`A. Claim Interpretation
`In a CBM patent 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 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 four phrases recited in various
`claims and contends that we should interpret those phrases according to the
`broadest reasonable interpretation standard. Pet. 22–29. Patent Owner does
`not comment on Petitioner’s proposed interpretations other than to argue that
`Petitioner interpreted claims under the wrong standard and should have
`interpreted the claims under the standards set forth in Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc). See Prelim. Resp. 59–65
`
`7
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`(exercising right to delay comment on claim construction only if review is
`initiated).
`According to Patent Owner, the ’095 patent “will expire on
`January 30, 2016,” “months before any final written decision” in this case.
`Id. at 60. Patent Owner, therefore, reasons that the Phillips standard will
`apply to any final written decision. See id. at 60–61. 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 60–64. 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
`support.” Id. at 61. 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 ’095 patent is not expired. See id. at 60. 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
`
`
`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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`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
`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
`’095 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.
`
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`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. 8–9. First, Petitioner represents that all Petitioners except
`DPI “ha[ve] been sued for infringement” of the ’095 patent and that DPI’s
`real 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. 9; 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’095 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
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`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 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 ’095 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. 9–14.
`As an initial matter, we address Patent Owner’s argument that its
`statutory disclaimer of claim 7 of the ’095 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. 11–12.
`Specifically, Patent Owner asserts that we must treat the ’095 patent as
`though disclaimed claim 7 never existed, and Petitioner argues only that
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`claim 7 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
`’095 patent demonstrate that the patent satisfies the financial product or
`service requirement. See, e.g., Pet. 12 (“Here, the claims, the specification,
`and the patent owner’s litigation history all show the 095 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 13–
`14 (citing Ex. 1001, Abstract, 1:26–28, 4:59–60, 7:65–14:46). Therefore,
`we understand that Petitioner refers to claim 7 as an example, and that
`Petitioner’s arguments apply more broadly to the subject matter of all claims
`of the ’095 patent.
`Accordingly, we consider whether Petitioner has shown that the
`remaining claims of the ’095 patent—claims 1–6 and 8—demonstrate that
`the patent meets the financial product or service requirement. We are
`persuaded by Petitioner’s showing that the apparatus recited in independent
`claim 1 encompasses 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 ’095 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. 13 (quoting, with emphasis,
`Ex. 1001, Abstract). Similarly, Petitioner references the “Technical Field of
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`the Invention” section of the ’095 patent: “The module can be configured
`. . . to authorize monetary transactions.” Pet. 13 (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. 13–14 (quoting portions of Ex. 1001, 7:65–
`14:46).
`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 ’095 patent Specification discloses
`“monetary embodiments.” Prelim. Resp. 31.
`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 “first data object” and
`“second data object” of independent claim 1—is evident from the Petition.
`See Reply 3–4 (citing Ex. 1001, 8:8–19, 9:21–24, 9:36–38, 9:52–67, 10:28–
`37, 10:57–58, 11:13–40); Pet. 13–14. The cited portions of the
`Specification, outlined above, make clear that the “first data object” and
`“second data object” recited in claim 1 is intended to be used for secure
`financial transactions. Using these two data objects, the claimed apparatus
`stores and adjusts the value of a cash equivalent or monetary value. A
`claimed apparatus that transfers a cash equivalent or monetary value
`manages a financial product and 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
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`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 ’095 patent
`satisfies the financial product or service requirement by arguing that
`claims 1–6 and 8 are not “limited to,” “specifically directed to,” or “specific
`to financial products or services.” Prelim. Resp. 27–31. These arguments,
`however, overstate the financial product or service requirement. To satisfy
`the definition of a covered business method patent in § 18(d)(1) of 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
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`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 ’095 patent claims are not limited expressly to a financial
`product or service are unpersuasive.
`Finally, we agree with Petitioner that Patent Owner’s assertion of the
`’095 patent against numerous financial institutions and banks is a factor
`weighing in favor of a conclusion that the ’095 patent is “used in the
`practice, administration, or management” of financial products or services.
`See Pet. 14; Reply 10; Bank of the West v. Secure Axcess, LLC, CBM2015-
`00009, slip op. at 13 (PTAB Apr. 13, 2015) (Paper 21); Paper 5, 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. 1018, 4.
`For the reasons set forth above, we determine that claim 1 of the
`’095 patent covers an “apparatus for performing data processing or other
`operations used in the practice, administration, or management of a financial
`product or service,” as required by the definition of a covered business
`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
`Patents eligible for CBM patent review “do[] not include patents for
`technological inventions.” AIA, § 18(d)(1); accord 37 C.F.R. § 42.301(a).
`The technological invention exception in the definition of a covered business
`method patent is not met by “[m]ere recitation of known technologies, such
`as computer hardware, . . . or specialized machines, such as an ATM or point
`of sale device,” or “[c]ombining prior art structures to achieve the normal,
`expected, or predictable result of that combination.” Office Patent Trial
`Practice Guide, 77 Fed. Reg. 48,756, 48,763–64 (Aug. 14, 2012) (“Trial
`Practice Guide”). To determine whether a patent is for a technological
`invention, we consider “whether the claimed subject matter as a whole”:
`(1) “recites a technological feature that is novel and unobvious over the prior
`art;” and (2) “solves a technical problem using a technical solution.”
`37 C.F.R. § 42.301(b); see CBM Rules, 77 Fed. Reg. at 48,736. Both the
`first and second prong must be met for the technological invention exception
`to apply. Agilysys, Inc. v. Ameranth, Inc., Case CBM2014-00014, slip op. at
`11 (PTAB Mar. 26, 2014) (Paper 19); see Google Inc. v. Inventor Holdings,
`LLC, Case CBM2014-00002, slip op. at 10 (PTAB Apr. 1, 2014); 157 Cong.
`Rec. S1364 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer).
`Regarding the first prong—whether the subject matter as a whole
`recites a “technological feature that is novel and unobvious over the prior
`art”—Petitioner contends that each of the technological features recited in
`the ’095 patent claims was generic, common, and conventional in 1995,
`when the application that issued as the ’095 patent was filed. Pet. 15–20.
`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.
`On this record, we agree.
`The ’095 patent claims recite many technological features including:
`an input/output interface, a microprocessor, a coprocessor, a timing circuit,
`and memory circuits. Petitioner proffers testimony from Peter
`Alexander, Ph.D. supporting its contention that each technological feature
`recited in the ’095 patent claims was generic and common before the priority
`date of the ’095 patent, and their combination yields predictable results.
`Pet. 16 (citing Ex. 1019 ¶ 30).
`In addition, the Specification refers to these technological features
`briefly and generally by reference to their function or by commenting that
`they are selected from known components. See, e.g., Ex. 1001, 2:52–53
`(“clock circuitry 14 . . . provides a continuously running real time clock”),
`2:54–57 (“coprocessor will handle the complex mathematics of RSA
`encryption and decryption”), 2:49–50 (“microprocessor 12 is preferably an
`8-bit microprocessor, but could be 16, 32, 64, or any operable number of
`bits”), 3:21–22 (“the module 10 preferably contains a general-purpose,
`8051-compatible micro controller”), 3:40–44 (“One of ordinary skill will
`understand that there are many comparable variations of the module design.
`For example, volatile memory can be used, or an interface other than a one-
`wire could be used.”). Thus, we are persuaded that the ’095 patent claims
`recite technological features that were known and conventional at the time of
`filing in 1995.
`We are not persuaded by Patent Owner’s arguments to the contrary.
`Patent Owner contends that the prosecution history of the ’095 patent
`demonstrates that the claims are directed to novel and unobvious
`
`17
`
`Page 17 of 25
`
`

`
`CBM2015-00102
`Patent 6,237,095 B1
`
`technological features. Prelim. Resp. 38–43. Patent Owner argues that the
`’095 patent issued because the applicants amended the claims to recite “a
`timing circuit connected to the microprocessor, the timing circuit for
`generating a time stamp” and that the second memory “store a transaction
`script, the transaction script including at least a representation of the time
`stamp generated by the timing circuit.” Prelim. Resp. 42; Ex. 1002, 222,
`234–37. But neither the applicants’ arguments for allowance, nor the
`allowance of the ’095 patent, is “dispositive of the issue before us,” which is
`“based on a different record than what was before the examiner.”
`Bloomberg Inc. v. Markets-Alert Pty Ltd., Case CBM2013-00005, slip op.
`at 7–8 (PTAB Mar. 29, 2013) (Paper 18).
`Patent Owner also faults the Petition for being conclusory in
`addressing the claims as a whole and relying on the asserted grounds of
`unpatentability and our prior decision instituting review of a related patent in
`CBM2014-00179. See Prelim. Resp. 43–51. We disagree. Petitioner’s
`arguments on the issue are sufficiently detailed and provide supporting
`citations to the Specification and Dr. Alexander’s testimony. See Pet. 15–
`20.
`
`In addition, Patent Owner points to a statement characterizing math
`coprocessors as being new at the time of filing of the ’095 patent in 1996
`that was made by counsel for other entities not among Petitioner in a district
`court proceeding relating to the ’095 patent. Prelim. Resp. 51–52.
`Specifically, counsel stated: “back in the 1990s math coprocessors were
`something that were new. It’s now many, many years later . . . .” Ex. 2008,
`44:5–9. We are not persuaded it is reasonable to interpret this statement as
`establishing that math coprocessors recited in the ’095 patent claims were
`
`18
`
`Page 18 of 25
`
`

`
`CBM2015-00102
`Patent 6,237,095 B1
`
`novel in 1996. Moreover, even if we agreed with Patent Owner’s
`characterization of counsel’s statement, it was not made on behalf of
`Petitioner. See id. at 2:21–22 (listing relevant counsel as appearing on
`behalf of non-parties PNC Financial Services Group, Inc. and The Vanguard
`Group, Inc.). We, therefore, find Patent Owner’s argument to be
`unpersuasive.
`On the record before us, we are persuaded that combining the known
`technological features recited in the ’095 patent claims to achieve only
`“receiving and transmitting encrypted data” is insufficient to render the
`combination anything but the “normal, expected, or predictable result of that
`combination.” Trial Practice Guide, 77 Fed. Reg. at 48,764. Accordingly,
`on this record, we are persuaded the ’095 patent claims are not directed to a
`novel and unobvious technological feature. Because we have determined
`that the ’095 patent does not satisfy the first prong of the analysis for the
`technological invention exception, the ’095 patent does not fall within this
`exception. Therefore, we need not reach the second prong of the analysis,
`namely whether the subject matter “solves a technical problem using a
`technical solution.”
`For the reasons given above, we determine that the ’095 patent is
`eligible for review as a covered business method patent.
`C. Challenges to the Claims Based on Prior Art
`Petitioner challenges the patentability of claims 1–6 and 8 on the
`grounds that the claims are obvious in light of various references including:
`Hawkes, Chaum, Ciarcia, Brown, and Ingalls. The Supreme Court in KSR
`International Co. v. Teleflex Inc., 550 U.S. 398 (2007) reaffirmed the
`framework for determining obviousness as set forth in Graham v. John
`
`19
`
`Page 19 of 25
`
`

`
`CBM2015-00102
`Patent 6,237,095 B1
`
`Deere Co., 383 U.S. 1 (1966). As observed by the Court in KSR, the factual
`inquiries set forth in Graham that are applied for establishing a background
`for determining obviousness under 35 U.S.C. § 103(a) are summarized as
`follows:
`1. Determining the scope and content of the prior art,
`2. Ascertaining the difference

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