UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY, LLC,
`
`Patent Owner.
`
`_________________________________________
`
`Case IPR2018-00809
`U.S. Patent No. 9,530,137
`_________________________________________
`
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`CONDITIONAL MOTION TO AMEND
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`I. 
`
`II. 
`
`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`Table of Contents
`
`Page
`
`INTRODUCTION ........................................................................................... 1 
`A.  USR Disclaimed Claims 8 and 11 To Avoid A CBM Petition. ............ 1 
`B. 
`USR Now Tries To Reintroduce The Subject Matter It Disclaimed. ... 2 
`ARGUMENT ................................................................................................... 3 
`A.  USR’s Substitute Claims Fail To Respond to A Ground of
`Unpatentability Involved In The Trial. ................................................. 3 
`USR Is Estopped From Reintroducing The Subject Matter Of
`Disclaimed Claims 8 and 11. ................................................................. 5 
`USR Has Waived Its Right To Respond To Ground 3. ........................ 5 
`C. 
`D.  USR Failed To Meet Its Duty Of Candor Under 37 C.F.R. § 42.11. .... 6 
`E. 
`USR Cannot Substitute Claims That Apple Did Not Challenge. .......... 6 
`F. 
`USR Proposes An Unreasonable Number Of Substitute Claims. ......... 7 
`G. 
`The Substitute Claims 13-21 Are Ineligible Under 35 U.S.C. § 101.... 8 
`1. 
`Alice Step 1: The Substitute Claims Are Directed to the
`Abstract Idea Of Verifying an Account Holder’s Identity Based
`On Codes And/Or Information Related to an Account Holder
`Before Enabling a Transaction. ................................................. 10 
`Alice Step 2: The Remaining Limitations Of The Substitute
`Claims Add Nothing Inventive To The Abstract Idea. ............. 14 
`Substitute Claims 13-14 and 19-21 Are Obvious Over Jakobsson In
`View Of Maritzen & Schutzer. ........................................................... 17 
`1. 
`Substitute Claims 13 and 21 ..................................................... 17 
`2. 
`Substitute Claims 14 and 19 ..................................................... 20 
`3. 
`Substitute Claim 18 ................................................................... 21 
`Substitute Claims Do Not Satisfy § 112. ............................................ 23 
`1. 
`Limitations 13[e] And 21[f] Lack Written Description Support.
` ................................................................................................... 23 
`Limitation 17[a] Lacks Written Description Support. .............. 25 
`
`B. 
`
`H. 
`
`I. 
`
`2. 
`
`2. 
`
`
`i
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`INTRODUCTION
`
`I.
`
`Through its conditional motion to amend (“CMTA”), USR tries to game the
`
`patent system by reintroducing subject matter it previously disclaimed from the
`
`claims of the ’137 patent to avoid institution of a CBM on the same patent. In
`
`doing so, USR fails to comply with 37 C.F.R. §§ 42.121(a)(2)(i) and the Board’s
`
`precedential ruling in Lectrosonics, Inc. v. Zaxcom, Inc., which require
`
`amendments to respond to a ground of unpatentability involved in the trial and
`
`patent owners to comply with their duty of candor to the Board. Furthermore,
`
`USR’s motion fails because USR’s substitute claims recite subject matter that is
`
`patent ineligible under § 101 as demonstrated in CBM2018-00022 (-022 CBM);
`
`are indefinite, unsupported by the written description, and not enabled under §112;
`
`and are obvious in view of the prior art of record or concepts well known before
`
`2006. Thus, USR’s CTMA should be denied.
`
`A. USR Disclaimed Claims 8 and 11 To Avoid A CBM Petition.
`
`The present Petition, filed on April 4, 2018, challenged claims 1, 2, and 5-12
`
`of the ’137 patent as unpatentable under 35 U.S.C. § 103. Concurrently therewith,
`
`Petitioner filed the -022 CBM demonstrating the invalidity of claims 1-12 of the
`
`’137 patent under 35 U.S.C. § 101. See Apple Inc. v. USR, LLC., CBM2018-
`
`00022, Paper 3, Petition (PTAB Apr. 4, 2018). The -022 CBM demonstrated that
`
`claims 8 and 11 were directed to covered business methods. Id. at 17-19. USR
`
`1
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`disclaimed claims 8, 10, and 11 on July 6, 2018 (Ex-2003), and argued in its POPR
`
`that Petitioner’s arguments related to claims 8 and 11 were moot in light of USR’s
`
`disclaimer. Apple Inc. v. USR, LLC., CBM2018-00022, Paper 8, POPR (PTAB
`
`July 10, 2018). In the subsequent institution decision in the instant Petition and
`
`denial of institution of the -022 CBM, this panel did not consider claims 8 and 11.
`
`B. USR Now Tries To Reintroduce The Subject Matter It
`Disclaimed.
`
`USR now tries to take back its assertions to the Board by reintroducing the
`
`same subject matter of claims 8 and 11 into the substitute claims. As shown in the
`
`chart below, USR’s substitute claims 13 and 21 recite subject matter that is
`
`virtually identical to the now-disclaimed subject matter recited by dependent
`
`claims 8 and 11:
`
`Original ’137 Claims
`8. “The system of claim
`1, wherein the first
`authentication
`information includes a
`multidigit public ID code
`for a credit card account,
`which a credit card issuer
`can map to a usable
`credit card number.”
`
`11. “. . . the second
`device that is a
`networked credit card
`validation-information
`entity configured to
`
`Substitute Claim 13
`13[c] “. . . the first
`authentication
`information including a
`multi-digit identification
`(ID) code allowing a
`networked validation-
`information entity to map
`the multi-digit ID code to
`a credit and/or debit card
`number . . .”
`13[e] “. . . the second
`device being the
`networked validation-
`information entity
`configured to enable the
`
`Substitute Claim 21
`21[d] “. . . the first
`authentication information
`including a multi-digit
`identification (ID) code
`allowing a networked
`validation-information
`entity to map the multi-
`digit ID code to a financial
`account number . . .”
`
`21[f] “. . . the second
`device being the networked
`validation-information
`entity configured to enable
`the financial transaction
`
`2
`
`

`

`Original ’137 Claims
`approve or deny financial
`transactions based on
`authentication of the
`user.”
`
`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`Substitute Claim 13
`Substitute Claim 21
`credit and/or debit card
`based on
`transaction based on
`authentication of the user .
`authentication of the user
`. .”
`. . .”
`
`Despite the similarity between the disclaimed claims and USR’s substitute
`
`
`
`claims, USR’s CMTA makes no reference to its disclaimer or to original claims 8
`
`and 11 for support for its amendments. Furthermore, USR now contradicts
`
`statements that it made in its POPR. Whereas USR previously argued that Ground
`
`3 addressing claims 8 and 11 was moot, Ground 3 is no longer moot, and renders
`
`obvious the new limitations.
`
`By removing the limitations of claims 8 and 11 from consideration prior to
`
`institution and thereafter reviving them in its CMTA, USR has deprived the Board
`
`of valuable time to consider the merits of Ground 3. In doing so, USR has sought
`
`to avoid timely, complete, just, and efficient resolution of the issues presented in
`
`the instant Petition. As described below, the substitute claims are invalid under the
`
`same grounds as the present Petition, and thus fail to respond to a ground of
`
`unpatentability involved in the trial. Additionally, the substitute claims recite
`
`nothing more than standard, well known encryption and authentication techniques
`
`that existed long before 2006. Accordingly, the Board should deny USR’s CMTA.
`
`II. ARGUMENT
`A. USR’s Substitute Claims Fail To Respond to A Ground of
`Unpatentability Involved In The Trial.
`
`3
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`The Board should deny USR’s proposed amendments because they “do not
`
`respond to a ground of unpatentability.” See 37 C.F.R. § 42.121(a)(2)(i); see also
`
`Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, -01130, Order, Paper No. 15,
`
`5-6 (PTAB Feb. 25, 2019).
`
`First, as discussed above, substitute limitations 13[c], 13[e], 21[d], and 21[f]
`
`and other limitations that recite a “financial transaction” or a “credit and/or debit
`
`card transaction” reintroduce subject matter that is virtually identical to original
`
`claims 8 and 11. Although Apple challenged claims 8 and 11 under Ground 3,
`
`USR avoided institution on this ground by disclaiming claims 8 and 11. By
`
`reintroducing this subject matter in its CMTA, USR revives an issue that was
`
`intentionally excluded from being “involved in the trial.” Avoiding institution on
`
`ground of unpatentability and then reviving the same issues via amendment is
`
`gamesmanship that does not “respond to a ground of unpatentability.” Allowing
`
`USR to reintroduce disclaimed claim limitations would do the opposite of
`
`“serv[ing] the public interest,” “ensur[ing] a ‘just’ resolution of the proceedings,”
`
`or “ensur[ing] . . . fairness to all parties” (Lectrosonics, at 6).
`
`Second, as described below, none of the remaining substitute claims
`
`responds to a ground of patentability because these claims are obvious over the
`
`references of record or over well-known encryption and security techniques.
`
`USR’s CMTA should therefore be denied.
`
`4
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`B. USR Is Estopped From Reintroducing The Subject Matter Of
`Disclaimed Claims 8 and 11.
`
`“[W]here a party assumes a certain position in a legal proceeding, and
`
`succeeds in maintaining that position, he may not thereafter, simply because his
`
`interests have changed, assume a contrary position, especially if it be to the
`
`prejudice of the party who has acquiesced in the position formerly taken by him.”
`
`New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (citation omitted). USR is
`
`estopped from amending its claims to incorporate the subject matter of disclaimed
`
`claims 8 and 11. First, USR’s current position is clearly inconsistent with USR’s
`
`earlier position in the instant proceeding. See id. at 750. Second, USR had
`
`previously succeeded in persuading the Board in the present proceeding that
`
`Ground 3 was moot due to disclaimer of claims 8 and 11 such that the Board was
`
`persuaded to refrain from addressing the merits of Ground 3. See id. Third, USR
`
`would derive unfair advantage and impose an unfair detriment on Petitioner if not
`
`estopped because it avoided full, fair, and timely consideration of Ground 3 while
`
`simultaneously avoiding institution of the -022 CBM altogether. See id. at 751.
`
`The Board should not permit USR to reap the benefit of its inconsistent and
`
`misleading positions.
`
`C. USR Has Waived Its Right To Respond To Ground 3.
`
`USR has waived any arguments relating to Ground 3 in the present Petition
`
`and amended limitations 13[c], 13[e], 21[d], and 21[f]. The Board’s Trial Practice
`
`5
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`Guide states that “any arguments for patentability not raised in the [Patent Owner’s
`
`Response] may be deemed waived.” Office Patent Trial Practice Guide, 83 Fed.
`
`Reg. 39,989 (Aug. 13, 2018). By failing to respond to Ground 3 as it relates to the
`
`substitute claims in its POR (Paper 18), USR has waived the right to argue the
`
`merits of Ground 3. Accordingly, to the extent that the substitute claims are
`
`considered, USR has conceded limitations 13[c], 13[e], 21[d], and 21[f] are
`
`obvious under Ground 3.
`
`D. USR Failed To Meet Its Duty Of Candor Under 37 C.F.R. § 42.11.
`
`By proposing substitute claims 13 and 21, which restore the subject matter in
`
`disclaimed claims 8 and 11, USR directly contradicts its arguments in its POPR
`
`that the validity of such subject matter was moot. Though USR owed a duty of
`
`candor in its POPR and CMTA, see 37 C.F.R. § 42.11; Lectrosonics, Paper No. 15
`
`at 9-10, USR failed to disclose that it planned to seek or had sought inconsistent
`
`positions before the Board. See 37 C.F.R. § 42.51(b)(1)(iii) (“[A] party must serve
`
`relevant information that is inconsistent with a position advanced by the party
`
`during the proceeding concurrent with the filing of the documents or things that
`
`contains the inconsistency.”). Accordingly, the Board should dismiss USR’s
`
`CMTA because USR violated its duty of candor.
`
`E. USR Cannot Substitute Claims That Apple Did Not Challenge.
`
`The Board should deny USR’s CMTA because it seeks to substitute claims
`
`6
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`that were not challenged in the present Petition. 35 U.S.C. § 316(d)(1) only allows
`
`a patent owner to amend “challenged” claims. Thus, USR has no statutory basis
`
`for substituting claims 15 and 16 for unchallenged claims 3 and 4. Accordingly,
`
`the Board should dismiss USR’s CMTA for failing to comply with § 316.
`
`F. USR Proposes An Unreasonable Number Of Substitute Claims.
`
`A CMTA must submit a “reasonable number of substitute claims for each
`
`challenged claim.” Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, -01130,
`
`Paper 15, Order, 4 (PTAB Feb. 25, 2019) (precedential). USR’s attempt to replace
`
`7 challenged claims with 9 new claims is unreasonable.1 By adding more claims
`
`than Apple challenged, USR’s 9 substitute claims disregard the rebuttable
`
`presumption that a one-to-one ratio of substitute claims per challenged claims is
`
`reasonable. See id. at 4. Though USR acknowledges this presumption in its
`
`CMTA (Paper 19, 3), it does not attempt to demonstrate a need to submit more
`
`claims than Apple challenged. Instead, USR makes the following untrue assertion:
`
`“[c]onsistent with this presumption, the present Motion provides only one
`
`
`1 USR’s disclaimer reduced the number of challenged claims from 10 to 7.
`
`Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (For statutory disclaimer, “the
`
`patent is viewed as though the disclaimed claims had never existed in the patent.”).
`
`7
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`substitute claim for each Challenged Claim.”2 CMTA, 3.
`
`By failing to demonstrate a need for additional claims, USR waived its right
`
`to do so. That USR had no space to demonstrate need in its CMTA due to its
`
`reduced page limits is no excuse—the Board already informed USR here that USR
`
`“assumes the risk that it will not have sufficient space to make the preliminary
`
`showing required in a motion to amend.” Order, Paper No. 17, 2. Accordingly,
`
`the Board should deny USR’s amendment for failing to comply with the
`
`procedural requirements in 37 C.F.R. § 42.121(a)(3). See SAP America, Inc. v.
`
`Lakshmi Arunachalam, CBM2016-00081, Paper No. 28, 53-54 (PTAB Dec. 21,
`
`2017) (denying a CMTA for failure to comply with §42.221(a)(3) because Patent
`
`Owner did not submit arguments showing need).
`
`G. The Substitute Claims 13-21 Are Ineligible Under 35 U.S.C. § 101.
`
`The Board should also deny USR’s motion because the substitute claims
`
`recite ineligible subject matter under 35 U.S.C. § 101, which is a prerequisite for a
`
`CMTA. See Amazon.com, Inc. v. Uniloc Luxembourg S.A., IPR2017-00948, Final
`
`Written Decision, Paper No. 31, 58-59 (PTAB Aug. 1, 2018) (precedential). As
`
`discussed above, Petitioner has already challenged eligibility of the unamended
`
`claims under § 101. See Apple Inc. v. USR, CBM2018-00022, Petition, Paper No.
`
`
`2 Emphasis added unless otherwise noted.
`
`8
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`3, (PTAB Apr. 4, 2018) (institution denied as not directed to a covered business
`
`method). For at least the reasons documented in the -022 CBM, and further below,
`
`the substitute claims are also ineligible under § 101.
`
`In Alice Corp. Pty. v. CLS Bank Int’l, the Supreme Court invalidated claims
`
`directed toward computer-based schemes to manage “settlement risk” in financial
`
`transactions. 573 U.S. 208 (2004). The Court confirmed that, in light of “the
`
`ubiquity of computers,” limiting a claim covering an abstract concept to a “wholly
`
`generic computer implementation” is insufficient to transform the idea into a
`
`patent-eligible invention. Id. at 223-24.
`
`Applying the Alice two-step framework for distinguishing patents that claim
`
`ineligible abstract ideas from those that claim eligible applications of those ideas,
`
`the Board, in step one, must determine whether the claims are directed to a patent-
`
`ineligible abstract concept. Id. If the claims are directed to an abstract idea, the
`
`analysis proceeds to step two wherein the claim elements must be searched, both
`
`individually and as an “ordered combination,” for an “inventive concept”—i.e.,
`
`“an element or combination of elements that is sufficient to ensure that the patent
`
`in practice amounts to significantly more than a patent upon the [ineligible
`
`concept] itself.” Id. at 217-18 (alteration in original) (quotation omitted). A
`
`patentee cannot circumvent the prohibition on patenting abstract ideas by limiting
`
`the idea to “a particular technological environment,” or by adding “insignificant
`
`9
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`postsolution activity,” Bilski v. Kappos, 561 U.S. 593, 610-11 (2010) (internal
`
`quotation marks omitted), or “well-understood, routine, conventional” features,
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 82 (2012).
`
`Thus, “the mere recitation of a generic computer cannot transform a patent-
`
`ineligible abstract idea into a patent-eligible invention.” Alice, 573 U.S. at 223.
`
`1.
`Alice Step 1: The Substitute Claims Are Directed to the
`Abstract Idea Of Verifying an Account Holder’s Identity Based
`On Codes And/Or Information Related to an Account Holder
`Before Enabling a Transaction.
`
`The substitute claims fail the first step of Alice because the claims are
`
`directed to the abstract idea of verifying an account holder’s identity based on
`
`codes and/or information related to the account holder before enabling a
`
`transaction. Ex-1129, Shoup-Decl. ¶29. USR’s expert, Dr. Jakobsson, agrees that
`
`“[t]he ‘137 patent is generally directed to the idea of verifying an account holder’s
`
`identity to enable a transaction based on codes or information related to an account
`
`holder.” Ex-1127, Jakobsson Dep., 92:14-20. For example, substitute claim 21
`
`recites in its preamble “a system for authenticating a user for enabling a financial
`
`transaction.” Although claim 21 is limited to a computer system and financial
`
`transactions, the underlying problem that the claim purports to solve is age old:
`
`“authenticating identity or verifying the identity of individuals and other entities
`
`seeking access to certain privileges.” ’137 patent, 1:45-48. Limiting this pre-
`
`Internet problem to using a computer database cannot confer patent eligibility. See
`
`10
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`Bilski, 561 U.S. at 612 (“limiting an abstract idea to one field of use or adding
`
`token postsolution components did not make the concept patentable”); CLS Bank
`
`Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1300-01 (Fed. Cir. 2013) (giving
`
`examples of post-solution activity such as “identifying a relevant audience, a
`
`category of use, field of use, or technological environment”), aff’d, 134 S. Ct. 2347
`
`(2014). Limiting this pre-Internet problem to using a computer database, generic
`
`encryption techniques, and known authentication values cannot confer patent
`
`eligibility. See, e.g., Bilski, 561 U.S. at 612. Ex-1129, Shoup-Decl. ¶29.
`
`Similar claims have been found directed to an abstract idea at Alice step 1 in
`
`numerous Supreme Court and Federal Circuit decisions. See Alice, 573 U.S. at
`
`219-20 (finding abstract a patent directed to “exchanging financial obligations
`
`between two parties using a third-party intermediary to mitigate settlement risk” in
`
`part because such a process was “a fundamental economic practice”). Id. at 219;
`
`Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905 (Fed. Cir. 2017)
`
`(finding claims directed to verifying the authenticity of a mail object using an
`
`identifier or barcode and, as in the ’137 patent, an authenticating portion of the
`
`identifier was stored in a database to be an abstract idea and emphasizing that the
`
`generic functions of downloading, receiving, determining, verifying, and denying
`
`were not patent eligible without something more); Smart Sys. Innovations, LLC v.
`
`Chicago Transit Auth., 873 F.3d 1364 (Fed. Cir. 2017) (finding patents directed to
`
`11
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`acquiring identification from a bankcard, using the data to verify the validity of the
`
`bankcard, and granting/denying access based on a comparison of two number to be
`
`abstract).
`
`The claimed verification system is also directed to an abstract concept for
`
`the additional reason that the claim recites nothing more than a mental process.
`
`See Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1145 (Fed. Cir.
`
`2016) (“claims … directed to a mental process [are] a subcategory of unpatentable
`
`abstract ideas”); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1367
`
`(Fed. Cir. 2011) (finding invalid a “method and system for detecting fraud in a
`
`credit card transaction . . . over the Internet” as an abstract mental process). That
`
`is, a user seeking access to a private account could arrive at a bank and present a
`
`dynamic passcode. The bank teller would then compare the received passcode to
`
`information in a spreadsheet containing an entry for the account holder. If the
`
`received code matches the expected code in the spreadsheet, access is granted. The
`
`account holder could also give the teller a code that is different from his or her
`
`account number from which the teller could identify the correct account number.
`
`As a result, the identity verification system of claim 21 is drawn to an unpatentable
`
`abstract idea. Ex-1129, Shoup-Decl., ¶30.
`
`The patent specification also fails to meaningfully limit the abstract idea to
`
`specific hardware or software and instead emphasizes the broad and generic nature
`
`12
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`of components and systems in which the invention can be implemented. Ex-1001,
`
`’137 patent, 11:45-46 (“[t]he computer system may be a general purpose computer
`
`system”), 12:1-3 (“the database 24 may be any kind of database”), 12:34-36
`
`(“[T]he invention is not limited to a particular computer platform, particular
`
`processor, or particular high-level programming language”), 12:67-13:2
`
`(“[c]ommunication between the interface centers 27 and the computer 10 system
`
`may take place according to any protocol…”). Ex-1129, Shoup-Decl. ¶31.
`
`For the foregoing reasons, substitute claim 21 is directed to an unpatentable
`
`abstract idea. The remaining substitute independent and dependent claims all
`
`claim the same abstract idea, and only recite varied permutations of post-solution,
`
`generic, and well-known encryption, security, biometric, and authentication
`
`techniques that existed in the prior art. Cf. Enfish, LLC v. Microsoft Corp., 822
`
`F.3d 1327, 1337 (Fed. Cir. 2016) (finding claims were not directed to abstract
`
`concept because they recited a narrow and particular software structure—i.e., a
`
`“self-referential” logical table—that improved functionality of prior art computers
`
`by providing “increased flexibility, faster search times, and smaller memory
`
`requirements”). In fact, Dr. Jakobsson admits that these additional encryption and
`
`authentication techniques were well known in the prior art. See, e.g., Ex-1127,
`
`Jakobsson Dep., 30:16-34:24 (admitting that prior art discloses time-varying codes,
`
`encrypting messages between devices including authentication information, such
`
`13
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`as a credit card or account number or biometric information, authenticating a user
`
`based on encrypted messages, public key cryptography), 36:10-12 (admitting that
`
`prior art discloses key encryption keys), 44:10-12, 46:2-5, and 56:20-24 (admitting
`
`that prior art discloses hybrid cryptosystems), 76:11-77:19 (admitting that prior art
`
`discloses digital signatures), 95:3-5 (admitting that prior art discloses pin-based
`
`authentication authentication), 95:19-96:18 (admitting that prior art discloses
`
`biometric authentication), 96:23-98:15 (admitting that prior art discloses pin and
`
`biometric authentication together), 98:22-99:18 (admitting that prior art discloses
`
`local authentication), 99:19-101:7 (admitting that prior art discloses remote
`
`authentication), 101:2-7 (admitting that prior art discloses combined local and
`
`remote authentication), 161:14-63:12 (admitting that prior art discloses encryption
`
`and decryption, symmetric and asymmetric encryption, public key encryption),
`
`198:2-4 (admitting that prior art discloses fingerprint sensors capturing biometric
`
`information). Thus, these remaining claims are similarly abstract under the Alice
`
`test step 1. See Ex-1129, Shoup-Decl. ¶32.
`
`2.
`Alice Step 2: The Remaining Limitations Of The Substitute
`Claims Add Nothing Inventive To The Abstract Idea.
`
`The substitute claims also fail the second step of the Alice test. The
`
`substitute claims take the abstract idea of verifying an account holder’s identity
`
`based on codes and/or information related to the account holder before enabling a
`
`transaction and add nothing but the instruction to automate the process using
`
`14
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`conventional, generic computer hardware. As described above, all substitute
`
`claims are directed to systems using generic hardware and database software that
`
`was well known at the time of filing. Indeed, the written description emphasizes
`
`that the claimed invention can be implemented in “a general-purpose computer
`
`system” and is “not limited to a particular computer platform, particular processor,
`
`or . . . high level programming language.” ’137 patent, 11:45-48 12:34-39; see
`
`also id., 12:47-60. Furthermore, Dr. Jakobsson admits there is nothing inventive in
`
`the algorithms, software, components, or arrangement of components disclosed in
`
`the ’137 patent:
`
`Q: The ’137 and ’826 patents don’t propose any new encryption
`algorithm, correct? 3
`
`A: That is correct.
`
`Q: The ’137 and ’826 patents don’t disclose any new computer or
`computer components to perform encryption, correct?
`
`A: That’s also true.
`
`Q: The ’137 and ’826 patents don’t disclose any new software to
`perform encryption, correct?
`
`A: That is correct.
`A. Sorry. That’s correct.
`
`Q: The ’137 and ’826 patents don’t disclose any new arrangement of
`components to perform encryption, correct?
`A: That is correct.
`
`3 Objections omitted unless otherwise indicated.
`
`15
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`
`
`Ex-1127, Jakobsson Dep., 161:20-162:30; see also id. at 30:16-34:24, 36:10-12,
`
`44:10-12, 46:2-5, 56:20-24, 76:11-77:19, 95:3-5, 95:19-96:18, 96:23-98:15, 98:22-
`
`99:18, 99:19-101:7, 101:2-7, 161:14-63:12, 198:2-4. These general-purpose
`
`elements are neither inventive nor do they add “significantly more” than the
`
`abstract idea of verification, as Alice requires.4 Alice, 573 U.S. at 217-18;
`
`Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1329 (Fed. Cir.
`
`2017) (finding “recit[ation of] routine computer functions, such as the sending and
`
`receiving information to execute the database search” insufficient under Alice step
`
`2). Ex-1129, Shoup-Decl. ¶33.
`
`The limitations of each claim, considered separately and as an ordered
`
`combination, do not meaningfully limit the scope of the underlying abstract idea to
`
`which the claims are directed. See Ex-1129, Shoup-Decl. ¶34.
`
`None of the substitute claims change the character of the invention, but
`
`rather all merely claim different permutations of an identity verification system. It
`
`is well established that “limiting an abstract idea to one field of use or adding token
`
`postsolution components” does not make the concept patentable. Bilski, 561 U.S.
`
`
`4 The claims would similarly not pass muster under the machine or
`
`transformation test because the claims do not cover any particular machine and do
`
`not transform any article from one state to another. Ex-1127, Shoup-Decl. n. 2.
`
`16
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`at 612 (finding unpatentable dependent claims which limited the claims to
`
`commodities and energy markets applications); Apple, Inc. v. Ameranth, 842 F.3d
`
`1229, 1244-45 (Fed. Cir. 2016) (finding dependent claims relating to modification
`
`of a menu via handwriting or voice capture were insignificant post-solution
`
`activity); Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1334 (Fed. Cir. 2012)
`
`(finding dependent claims limiting use of a clearinghouse to car loan application
`
`process were unpatentable post-solution activity); Data Distrib. Tech., LLC v.
`
`BRER Affiliates, Inc., No. 12-4878 , 2014 WL 4162765, at *14 (D.N.J. Aug. 19,
`
`2014) (“The [patent-in-suit] is directed specifically to the real estate field, but that
`
`subject matter focus is not a meaningful limitation.”). Ex-1129, Shoup-Decl. ¶35.
`
`H.
`
`Substitute Claims 13-14 and 19-21 Are Obvious Over Jakobsson
`In View Of Maritzen & Schutzer.
`1.
`
`Substitute Claims 13 and 21
`
`a)
`
`Limitations 13[c], 13[e], 21[d], and 21[f]
`
`As discussed above, disclaimed claims 8 and 11, which depended from
`
`claim 1, are obvious over Jakobsson, Maritzen, and Schutzer. See Pet., 63-65, 69-
`
`71; Ex-1102, Shoup-Decl., ¶¶166-168, 175-179. Substitute limitations 13[c],
`
`13[e], 21[d], and 21[f] add similar limitations to claims 1 and 12, and are obvious
`
`for at least the same reasons claims 8 and 11 are obvious. It would have been
`
`obvious to combine Jakobsson, Maritzen, and Schutzer for at least the same
`
`reasons discussed in the Petition. See Pet., 66-69, 71-72; Ex-1102, Shoup-Decl.,
`
`17
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Conditional Motion to Amend
`¶¶169-174, 180-181. Ex-1129, Shoup-Decl. ¶36.
`
`Substitute limitation 13[c] further adds that the one or more signals recited
`
`in claim 1 “ha[s] at least three separable fields.” Jakobsson further discloses this
`
`limitation. Ex-1129, Shoup-Decl. ¶37.
`
`In the Decision Granting Institution, the Board found “Jakobsson’s ‘event
`
`state (E)’ to correspond to the claimed indicator of biometric authentication[,] . . .
`
`Jakobsson’s ‘dynamic[, time-varying] value (T)’ to correspond to the claimed time
`
`varying value[, and] . . . the remainder of Jakobsson’s authentication code,
`
`comprising the ‘user data value (P)’ and ‘secret (K)’ to correspond with the
`
`claimed first authentication information.” Decision, Paper No. 9, 11 (citations
`
`omitted). The Board further found that Jakobsson “discloses a variety of
`
`implementations in which the function may combine certain values at one stage
`
`and then combine the resulting authentication code with further values to result in
`
`another authentication code” and “Jakobsson’s combination of values may occur in
`
`any sequence; the end result is an ‘authentication code’ that includes multiple types
`
`of information.” Id. (citations omitted). Ex-1129, Shoup-Decl., ¶38.
`
`For example, Jakobsson teaches that combination function 230 can generate
`
`an authentication code 292 (another authentication code) by “prepending or
`
`appending the PIN (P) to A (K, T, E).” Ex-1113, Jakobsson, ¶73. A person of
`
`ordinary skill in the art (POSITA) would have understood that the event state (E),
`
`18
`
`

`

`U.S. Patent No. 9,530,137
`Petitioner’s Opposition to Condit