Paper No. 31
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC,
`
`Petitioner,
`
`UNIVERSAL SECURE REGISTRY LLC,
`
`Patent Owner
`
`Case IPR2018-00809
`
`US. Patent No. 9,530,137
`
`PATENT OWNER’S REPLY IN SUPPORT OF ITS MOTION TO AMEND
`
`PURSUANT TO 37 C.F.R. § 42.121
`
`Apple 1 136
`
`Apple V. USR
`IPR2018-00809
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC,
`
`Petitioner,
`
`UNIVERSAL SECURE REGISTRY LLC,
`
`Patent Owner
`
`Case IPR2018-00809
`
`US. Patent No. 9,530,137
`
`PATENT OWNER’S REPLY IN SUPPORT OF ITS MOTION TO AMEND
`
`PURSUANT TO 37 C.F.R. § 42.121
`
`Apple 1 136
`
`Apple V. USR
`IPR2018-00809
`
`
`
`TABLE OF CONTENTS
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`Case No. IPR2018-00809
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`US Patent No. 9,530,137
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`fig;
`
`PATENT OWNER’S LIST OF EXHIBITS ............................................................ III
`
`I.
`
`II.
`
`INTRODUCTION ........................................................................................... 1
`
`PETITIONER’S ARGUMENTS FOR DENIAL OF SUBSTITUTE
`
`CLAIMS HAVING FEATURES THAT OVERLAP WITH
`
`DISCLAIMED CLAIMS 8 AND 11 ARE MERITLESS ............................... l
`
`A.
`
`B.
`
`C.
`
`Substitute Claims Respond to a Ground of Unpatentability ................. 2
`
`Estoppel and Waiver Do Not Apply ..................................................... 6
`
`Patent Owner Satisfies Its Duty of Candor ........................................... 7
`
`III.
`
`SUBSTITUTE CLAIMS DIRECTED AT UNCHALLENGED
`
`CLAIMS .......................................................................................................... 8
`
`IV.
`
`SUBSTITUTE CLAIMS ARE PATENT ELIGIBLE UNDER § 101 ............ 8
`
`V.
`
`SUBSTITUTE CLAIMS ARE NOVEL AND NONOBVIOUS .................. 13
`
`A.
`
`It Would Not Have Been Obvious to Have the Claimed
`
`“Second Device” Map the ID Code to a Card or Account
`Number ................................................................................................ 14
`
`B.
`
`C.
`
`D.
`
`Using “Three Separable Fields” Is Not Obvious ................................ 16
`
`Substitute Dependent Claim 18 Is Not Obvious ................................. 19
`
`Petitioner Fails to Address Substitute Claims 17 and 20 .................... 21
`
`VI.
`
`SUBSTITUTE CLAIMS SATISFY 35 U.S.C. § 112 ................................... 21
`
`VII. CONCLUSION .............................................................................................. 25
`
`
`
`TABLE OF AUTHORITIES
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`Case No. IPR2018-00809
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`U.S. Patent No. 9,530,137
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`figs
`
`Cases
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int'l,
`
`134 S. Ct. 2347
`............................................................................................ 12
`
`................................................................... 6
`
`Apple Inc. et al. v. Valencell, Inc.,
`IPR2017-0032l , Paper 44
`Aqua Products, Inc. v. Matal,
`872 F.3d 1290 (Fed. Cir. 2017) .................................................................... 20, 21
`Ari0sa Diagnostics v. Verinata Health, Inc.,
`805 F.3d 1359 (Fed. Cir. 2015) ........................................................................... 21
`Ex parte Levy,
`17 USPQ2d 1461 (Ed. Pat. App. & Inter. 1990) ................................................. 20
`Universal Secure Registry, LLC v. Apple, Inc.,
`1:17-cv-00585-JFB-SRF, Dkt. 137 (D. Del. Sep. 18, 2018) ................................. 9
`
`Statutory Authorities
`35 U.S.C. § 112 ........................................................................................................ 21
`
`Rules and Regulations
`37 C.F.R. § 42.121 ..................................................................................................... i
`
`Other Authorities
`
`Ofice Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,767 (Aug. 14,
`2012) ...................................................................................................................... 7
`
`ii
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`PATENT OWNER’S LIST OF EXHIBITS
`
`Ex. 2001
`
`Declaration of Dr. Markus Jakobsson in Support of
`Patent
`
`Owner’s Preliminary Response.
`
`Curriculum Vitae of Dr. Markus Jakobsson.
`
`EX. 2003
`
`USR Disclaimer Filed July 6, 2018.
`
`Ex. 2004
`
`Declaration ISO Motion Pro Hac Vice Harold Barza.
`
`Ex. 2005
`
`Declaration ISO Motion Pro Hac Vice Jordan Kaericher.
`
`EX. 2006
`
`US. Application No. 15/019,660.
`
`EX. 2007
`
`US. Application No. 1 1/677,490.
`
`EX. 2008
`
`US. Provisional Application No. 60/775,046.
`
`EX. 2009
`
`US. Provisional Application No. 60/812,279.
`
`Ex. 2010
`
`Declaration of Dr. Markus Jakobsson in Support of
`Patent Owner’s Response.
`
`Ex. 2011
`
`Deposition Transcript of Dr. Victor John Shoup.
`
` Ex. 2002
`
`
`
`Ex. 2012
`
`Ex. 2013
`
`N. Asokan, et. al, The State of the Art in Electronic
`Payment Systems, IEEE Computer, Vol. 30, No. 9, pp.
`28-35 (IEEE Computer Society Press, Sept. 1997).
`
`M. Baddeley, Using E-Cash in the New Economy: An
`Economic Analysis of Micropayment Systems, J.
`Electronic Commerce Research, Vol. 5, No. 4, pp. 239-
`253 (Nov. 2004).
`
`Ex. 2014
`
`Declaration of Dr. Markus Jakobsson ISO PO’s
`
`Conditional Motion to Amend.
`
`iii
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`
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`Case No. IPR2018-00809
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`U.S. Patent No. 9,530,137
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`Ex
`
`.2015
`
`EX
`
`.2016
`
`EX
`
`.2017
`
`EX
`
`.2018
`
`EX
`
`.2019
`
`EX
`
`.2020
`
`EX
`
`.2021
`
`
`
`U.S. Provisional Application No. 60/859,235.
`
`U.S. District Court for Delaware Report and
`Recommendation.
`
`Deposition Transcript of Dr. Markus Jakobsson.
`
`A. Juels and M. Sudan, “A Fuzzy Vault Scheme.”
`
`Deposition Transcript (Rough) of Dr. Ari Juels.
`
`U.S. Patent No. 8,495,372.
`
`Declaration by Dr. Markus Jakobsson ISO Reply to
`Motion to Amend.
`
`
`
`iV
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`
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`Universal Secure Registry LLC (“Patent Owner”) submits this Reply in
`
`support of its Conditional Motion to Amend, Paper 19 (“Mot”), and in response to
`
`Petitioner’s Opposition to Patent Owner’s Conditional Motion to Amend, Paper 24
`
`(“0p”).
`
`I.
`
`INTRODUCTION
`
`Petitioner advances a myriad of baseless arguments against the patentability
`
`of some of Patent Owner’s substitute claims, while completely failing to address
`
`other substitute claims at all (and hence conceding their patentability). Petitioner
`
`also improperly attempts to incorporate substantive arguments from its Petition (and
`
`its expert’s declaration in support thereof) in a flagrant attempt to circumvent this
`
`Board’s order on page limits. See Paper No. 17. Petitioner’s opposition lacks any
`
`merit whatsoever as the majority of its arguments either have been already rejected
`
`by this Board (or the district court), or are specious attacks on the propriety of Patent
`
`Owner’s presentation of the substitute claims.
`
`II.
`
`PETITIONER’S ARGUMENTS FOR DENIAL OF SUBSTITUTE
`
`CLAIMS HAVING FEATURES THAT OVERLAP WITH
`
`DISCLAIMED CLAIMS 8 AND 11 ARE MERITLESS
`
`The Petitioner first argues that Patent Owner’s substitute claims 13 and 21
`
`“recite subject matter that is virtually identical to the now-disclaimed subject matter
`
`by dependent claims 8 and 11.” Op. at 2. Petitioner then argues that the substitute
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`claims should be denied because: the substitute claims fail to respond to a ground of
`
`unpatentability under 37 C.F.R. § 42.12l(a)(2)(i); Patent Owner is estopped from
`
`reintroducing subject matter of disclaimed claims 8 and 11; and Patent Owner has
`
`“violated” its duty of candor with the Board for taking a position in its Motion that
`
`is inconsistent with its Patent Owner’s Preliminary Response (POPR). See Op. at
`
`3-6. The Petitioner also argues that USR should be deemed to have waived any
`
`arguments relating to Ground 3 and, as such, USR “has conceded limitations l3[c],
`
`13[e], 21[d], and 21[f] [as] obvious under Ground 3.” Id. Petitioner’s arguments
`
`for denial of the substitute claims or waiver of potential arguments are meritless.
`
`A.
`
`Substitute Claims Respond to a Ground 0f Unpatentabilig
`
`First, substitute claims 13 and 21 are not “virtually identical” to the disclaimed
`
`subject matter of claims 8 and 11. For instance, substitute claims 13 and 21 both
`
`recite “a multi-digit identification (ID) code allowing a networked validation-
`
`information entity to map the multi-digit ID code,” while disclaimed claim 8
`
`recites, “a multidigit public ID code for a credit card account, which a credit card
`
`issuer can map...” Compare Motion at Al (claim 13) and A4 (claim 21) with Ex.
`
`1101 at 46:34-37 (claim 8) (emphasis added). Thus, in substitute claims 13 and 21,
`
`a “networked validation information entity” maps the multi-digit ID code, while in
`
`claim 8, a credit card issuer performs the mapping of a multidigit public ID code.
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`This distinction is important because substitute claims 13 and 21 further specify that
`
`the networked validation-information entity is the claimed “second device” that
`
`is configured to enable the credit and/or debit card [or financial] transaction based
`
`on authentication of the user. Motion at Al (claim 13) and A4 (claim 21). Thus, in
`
`these substitute claims,
`
`the same entity—the networked validation-information
`
`entity—responsible for mapping the multi-digit ID code is also responsible for
`
`enabling the financial transaction.
`
`By contrast, claims 8 and 11 taken together1 do not specify that the credit card
`
`issuer, which performs the mapping (claim 8) operation, is the second deVice (the
`
`networked validation-information) that “approve[s] or den[ies]
`
`[the]
`
`financial
`
`transaction[]” (claim 11). Rather, claims 8 and 11 taken together merely require that
`
`a credit card issuer perform the mapping while separately the second deVice, which
`
`is the networked validation-information entity, approves/denies the financial
`
`transaction. See Ex. 1101 at 46:34-37, 46:50-54.
`
`1 Claims 8 and 11 do not have interdependency and instead separately depend from
`
`claim 1. Thus, Petitioner also neglects the impact that subject matter from these
`
`claims (that may exist in substitute claims 13 and 21) have on the substitute claims
`
`taken as a whole.
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`Indeed, Petitioner contradicts itself by vehemently arguing that claim
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`limitations l3[e] and 21[f] lack written description support “because the original
`
`disclosure does not show a financial institution [e.g., credit card issuer] being a
`
`networked validation-information entity.” Op. at 23-24. If Petitioner believes that
`
`a financial institution, such as a “credit card issuer,” is different from a “networked
`
`validation-information entity” for written description purposes, then it cannot in the
`
`same breath argue that the two terms are “virtually identical” in attempting to
`
`establish that Patent Owner purportedly fails to respond to Ground 3.
`
`Second, substitute claim 13 additionally recites “the first processor is
`
`programmed to generate one or more signals having at least three separable fields
`
`that include...” This limitation responds to Ground 1 of unpatentability because,
`
`among other things, Jakobsson, which purportedly discloses “first authentication
`
`information,” “indicator of biometric authentication,” and “time varying value” (see
`
`Petition at 30-33; Inst. Dec. (Paper 9) at 11), fails to disclose that the inputs (e.g., P,
`
`K, T, E, etc.) to its combination function generate an authentication code with at
`
`least three separable fields. See discussion infra Section V; see also Motion at 11-
`
`12. The Board has indicated that 37 C.F.R. § 42.121(a)(2)(i) “does not require,
`
`however, that every word added to or removed from a claim in a motion to amend
`
`be solely for the purpose of overcoming an instituted ground,” and that “once a
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`proposed claim includes amendments to address a prior art ground in the trial, a
`
`7
`patent owner also may include additional limitations.’ Western Digital Corp. v.
`
`SPEX Tech., IPR2018-00082, -00084, Paper 13 at 6. Consequently, even if the
`
`limitations identified by Petitioner related to “financial transaction” and “credit
`
`and/or debit card transaction” did not address a ground of unpatentability, these
`
`amendments are valid and includable by virtue of the “separable fields” amendment,
`
`which Petitioner does not dispute responds to a ground of unpatentability.
`
`Third, as to substitute claim 21, disclaimed claims 8 and 11 did not depend
`
`from independent claim 12, which substitute claim 21 proposes to replace. As such,
`
`no ground in the Petition was directed at a dependent claim that depended from claim
`
`12 and also included the subject matter of claims 8 and 11. Thus, in addition to the
`
`aforementioned differences between the subject matter of claims 8 and 11 and the
`
`amended features of limitations l3[c], l3[e], 2l[d], and 2l[f], differences between
`
`independent claims 1 and 12 also merit denial of Petitioner’s argument that substitute
`
`claim 21 should be denied for failing to respond to Ground 3 of unpatentability.
`
`Lastly, the amended features of limitations l3[c], l3[e], 2l[d], and 2l[f] do
`
`respond to Ground 3 of unpatentability because the combination of Jakobsson,
`
`Maritzen, and Schutzer fail to disclose several claimed features. See discussion infra
`
`Section V. Thus, even if Patent Owner had failed to respond to Ground 3 of
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`unpatentability in its Motion (because it disclaimed the claims subject to Ground 3),
`
`it does so now expressly here in its Reply. See Apple Inc. et a]. v. Valencell, Ina,
`
`IPR2017-00321, Paper 44 at 53-54 (Patent Owner did not address a ground of
`
`unpatentability in its MTA, but Patent Owner satisfied its burden with arguments
`
`made in its Reply brief).
`
`B.
`
`Estoppel and Waiver Do Not Apply
`
`Patent Owner is not estopped from submitting the pending substitute claims.
`
`As a preliminary matter and contrary to Petitioner’s assertions (see Op. at 5), the
`
`substitute claims include claim limitations that are substantively different than
`
`disclaimed claims 8 and 11 and for at least this reason Petitioner’s arguments
`
`concerning estoppel (or waiver) do not apply. See discussion supra Section ILA.
`
`Petitioner alleges that “USR’s current position is clearly inconsistent with
`
`USR’s earlier position in the instant proceeding.” However, Patent Owner has not
`
`taken any “position” in the past that now contradicts its stance that the substitute
`
`claims are patentable in view of the prior art. For instance, Patent Owner has never
`
`stated that the subject matter of claims 8 and 11 is obvious in view of prior art or
`
`were unpatentable for any other reason.
`
`Instead, on July 6, 2018, Patent Owner
`
`submitted a disclaimer under 37 C.F.R. § 1.321(a) disclaiming claims 8, 10, and 11
`
`of the ’137 Patent (Ex. 2003). Patent Owner then stated in its POPR that it
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`“maintains [that claims 8 and 11] are valid” but that Ground 3 was moot in view of
`
`the disclaimer. Paper 8 at 32. Patent Owner has taken no conflicting positions.
`
`Moreover, Patent Owner does n_ot “derive an unfair advantage and impose an
`
`unfair detriment on Petitioner” because it allegedly “avoided full, fair, and timely
`
`consideration of Ground 3” or the Board somehow “was persuaded to refrain from
`
`addressing the merits of Ground 3.” Op. at 5. If Petitioner believes the arguments
`
`it made with respect to the combination of Jakobsson, Maritzen, and Schutzer in
`
`Ground 3 apply to the substitute claims, it may raise those arguments—and any other
`
`new argument—in its Opposition. Office Patent Trial Practice Guide, 77 Fed. Reg.
`
`48,756, 48,767 (Aug. 14, 2012). Indeed, Petitioner did just that. See Op. at 17-23.
`
`Petitioner further argues that Patent Owner has “waived any arguments
`
`relating to Ground 3...and amended limitations l3[c],
`
`l3[e], 21[d], and 21[f]”
`
`because “[t]he Board’s Trial Practice Guide states that
`
`‘any arguments for
`
`patentability not raised in the [Patent Owner’s Response] may be deemed waived.’”
`
`Op. at 5-6 (citing Trial Practice Guide Update, 83 Fed. Reg. 38,989). Petitioner’s
`
`argument is meritless: Patent Owner’s CMTA is not a POR, and any arguments
`
`Patent Owner did not include in its POR do not affect Patent Owner’s ability to
`
`respond to invalidity arguments presented in Petitioner’s Opposition.
`
`C.
`
`Patent Owner Satisfies Its Duty of Candor
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`Petitioner fails to establish that Patent Owner has violated its duty of candor
`
`with the Board. As previously discussed, Patent Owner does not “contradict its
`
`arguments in its POPR that the validity of such subject matter was moot” as
`
`Petitioner alleges. Op. at 6; see discussion supra Section II.B. Also, the substitute
`
`claims recite limitations that are substantively different than the subject matter of
`
`disclaimed claims 8 and 11. See discussion supra Section II.A. Petitioner’s
`
`contention that Patent Owner violated 37 C.F.R. § 42.51(b)(l)(iii) is also baseless.
`
`This rule relates to discovery between parties and a duty of one party to serve
`
`relevant information concerning inconsistencies, not to any duty of candor.
`
`III.
`
`SUBSTITUTE CLAIMS DIRECTED AT UNCHALLENGED CLAIMS
`
`Per the conference call the parties had with the Board on April 22, 2019, all
`
`substitute claims directed at unchallenged claims are void.
`
`IV.
`
`SUBSTITUTE CLAIMS ARE PATENT ELIGIBLE UNDER § 101
`
`Petitioner argues that substitute claims 13-21 are unpatentable under § 101
`
`because they purportedly claim patent-ineligible abstract
`
`ideas. Op. at 8-14.
`
`However, on September 19, 2018, United States Magistrate Judge Sherry R. Fallon
`
`for the District Court of Delaware issued a Report and Recommendation (R&R)
`
`rejected virtually identical arguments made by Petitioner, and recommending that
`
`the District Court deny Petitioner’s motion to dismiss under § 101 since claims 1-12
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`of the ’137 Patent are “n_0t directed to an abstract idea because ‘the plain focus of
`
`the claims is on an improvement to computer functionality itself, not on economic
`
`or other tasks for which a computer is used in its ordinary capacity.”’ Ex. 2016,
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`Universal Secure Registry, LLC v. Apple, Inc, 1:17-cv-00585-JFB-SRF, Dkt. 137 at
`
`21 (D. Del. Sep. 18, 2018) (emphasis added). Specifically, Judge Fallon stated that:
`
`[t]he ’ 137 patent is directed to an improvement in the security of mobile
`
`devices by using biometric information to generate a time varying or
`
`other type of code that can be used for a single transaction, preventing
`
`the merchant from retaining identifying information that could be
`
`fraudulently used in subsequent transactions. (’137 patent, col. 18:14-
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`34) While certain elements of claim 12 recite generic computer
`
`components,
`
`the claim as a whole describes an improved
`
`authentication system with increased security.
`
`Id. at 22 (emphasis added). As such, substitute claims 13 and 21, which are narrower
`
`than claims 1 and 12, are patent eligible for the same reasons. Ex. 2021 at 11 29.
`
`This Board also reached the same conclusion of patent eligibility when it
`
`rejected substantially similar arguments made by Petitioner for related US. Patent
`
`8,577,813 (“the ’813 Patent”) in CBM2018-00026. CBM2018-00026, Paper 10 at
`
`23-24.
`
`Indeed, in its Petition for CBM2018-00026, Petitioner advanced the same
`
`abstract idea of “verifying an account holder’s identity based on codes and/or
`
`information related to the account holder before enabling a transaction” as it does
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`here now, and also cited to the same cases making substantially similar arguments
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`for patent ineligibility. The Board’s reasoning for dismissing these arguments in
`
`CBM2018-00026, and finding the claims of the ’813 Patent are not abstract, applies
`
`equally to the present substitute claims.
`
`For instance, Petitioner has oversimplified the claimed inventions and ignores
`
`many recited key claim limitations. Ex. 2021 at W 30-34. The specification shows
`
`that
`
`the substitute claims are directed to specific, concrete,
`
`technological
`
`improvements
`
`to secure distributed transaction approval
`
`systems
`
`that
`
`incorporate both local and remote authentication without compromising the
`
`user’s sensitive information, and these inventions are demonstrably valid under the
`
`analysis of Alice and its progeny. Id. Moreover, the problems addressed by the
`
`’137 Patent are firmly rooted in technological challenges associated with
`
`distributed electronic transactions, and so are the claimed solutions. Id.
`
`By arguing that the substitute 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” (Op. at 10), Petitioner fails to
`
`account for multiple claim requirements. Substitute claims 13 and 21 recite a unique
`
`and highly secure distributed transaction approval system including a local “first
`
`device” that authenticates a user of the device based on “secret information” (e.g., a
`
`10
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`PIN code) and retrieves or receives “biometric information” (e.g., a fingerprint
`
`captured by the “biometric sensor” of the first device) before the first device
`
`generates and Wirelessly transmits a transaction approval request “signal” to a
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`remote “second device.” Id. at 11 32. This signal includes at least three specific types
`
`of data: “first authentication information,” an “indicator of biometric authentication”
`
`of the user by the first device, and a “time varying value.” The remote second device
`
`receives the signal and, based on the specific data contained therein, as well as the
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`user’s “second authentication information” available at the second device,
`
`the
`
`second device may provide the first device With an “enablement signal” indicating
`
`the second device’s approval of the transaction. Petitioner’s proffered overbroad
`
`abstract idea does not capture these recited features. Id.
`
`Petitioner also fails to explain how the ordered combination of elements in the
`
`claims manifestly claim no more than Petitioner’s purported abstract idea. Although
`
`it is true that the “mere recitation of a generic computer” cannot transform a method
`
`claim directed to a patent-ineligible abstract idea into a system claim directed to a
`
`patent-eligible invention, Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347,
`
`2358, the substitute claims do more than merely state “an abstract idea While adding
`
`the words ‘apply it.’” Instead, they recite a specific, concrete, technological solution
`
`providing an improved secure distributed transaction approval
`
`system that
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`11
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`incorporates both local and remote authentication without compromising the
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`user’s sensitive information. Id. at 11 33. Thus, Petitioner fails to adequately address
`
`that the claimed “biometric information” and “indicator of biometric authentication”
`
`are specifically employed in two ways: the former used to locally authenticate the
`
`user of the first device, and the latter used to remotely authenticate the first device
`
`by the second device when the indicator of biometric authentication is used to
`
`generate one or more signals that are sent to the second device. Further, the claims
`
`do not preempt the field of secure electronic transactions, but instead cover very
`
`specific technologies used on specialized devices (e.g., with biometric sensors),
`
`while leaving open other known or unknown technology for conducting such
`
`transactions. Id.
`
`Even assuming the substitute claims are directed to the Petitioner’s abstract
`
`idea, the ordered combination of elements in these claims “transform the nature of
`
`the claim into a patent-eligible application.”
`
`Id. at 11 34. Petitioner does not
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`substantively address the claims as an ordered combination. See Op. at 14-17. By
`
`contrast, the ’137 Patent’s specification teaches that the ordered combination of
`
`elements do much more than merely recite an abstract idea or a rudimentary prior
`
`art verification system. See, e.g., Ex. 1101 at 2:50-52, 3:63-5:31, 13:62-14:53,
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`15:43-50, 16:49-17:54, 18:13-34, 19:45-20:37, 22:16-20, 29:21-44, 32:31-34:6.
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`12
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`Case No. IPR2018-00809
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`US. Patent No. 9,530,137
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`Instead, the ordered combination of claim elements recite a highly secure distributed
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`transaction approval system including a local “first device” that authenticates a user
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`of the device based on “secret information” (e.g., a PIN code) and retrieves or
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`receives “biometric information” (e.g., a fingerprint captured by the “biometric
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`sensor” of the first device) before the first device generates and wirelessly transmits
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`a transaction approval request “signal” to a remote “second device” that includes at
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`least three specific types of data. Ex. 2021 at 11 34. The remote second device may
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`then provide the first device with an “enablement signal” indicating the second
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`device’s approval of the transaction based on the data contained in the “signal.” Id.
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`For these reasons, the substitute claims are patent eligible.
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`V.
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`SUBSTITUTE CLAIMS ARE NOVEL AND NONOBVIOUS
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`Not only do the substitute claims respond to a ground of unpatentability, they
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`are clearly distinguishable over the prior art of record. As discussed above, the
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`substitute claims further specify that the networked validation-information entity is
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`the claimed “second device” that is configured to enable the credit/debit/financial
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`transaction based on authentication of the user. The substitute claims further recite
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`that the first authentication information included a multi-digit identification (ID)
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`code allowing the networked validation-information entity to map the multi-digit ID
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`code to a credit/debit card (or financial account) number. Substitute claim l3
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`l3
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`U.S. Patent No. 9,530,137
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`additionally recites that the first processor is programmed to generate one or more
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`signals “having at least three separable fields” that include the first authentication
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`information, an indicator of biometric authentication, and a time varying value.
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`Contrary to Petitioner’s assertions (Op. at 17-23), and as described in more detail
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`below, these amendments patentably distinguish the substitute claims over the
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`Jakobsson, Maritzen, and Schutzer references. Ex. 2021 at 1]] 35-43.
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`A.
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`It Would Not Have Been Obvious to Have the Claimed “Second
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`Device” Map the ID Code to a Card or Account Number
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`Petitioner fails to present any arguments in its Opposition with respect to the
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`newly added limitation in substitute claims 13 and 21 that “the first authentication
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`information include[ed] a multi-digit identification (ID) code allowing a networked
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`validation-information entity to map the multi-digit ID code to a [credit and/or debit
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`card/financial account] number,” but instead refers solely to the arguments made its
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`Petition with respect to disclaimed claims 8 and 11. Op. at 17-18. Even if this cross-
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`reference (and apparent incorporation by reference) were proper,2 Petitioner has
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`2 Patent Owner objects to Petitioner’s naked incorporation of arguments made in
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`its Petition for this limitation (as well as limitations 13[pre], 13[g], 13[h], 21[pre],
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`21 [h], and 21 [i] (see Op. at 20) and substitute claim 18 (see Op. at 21)) as a blatant
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`14
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`U.S. Patent No. 9,530,137
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`failed to establish this limitation is obvious in View of Jakobsson, Maritzen, and
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`Schutzer.
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`Disclaimed dependent claim 8 recited a multidigit public ID code for which
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`“a credit card issuer can map to a usable credit card number.” Ex. 1001 at C1. 8.
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`Substitute claims 13 and 21, on the other hand, require “a networked validation-
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`information entity” to perform the mapping. This is a critical distinction because
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`Petitioner acknowledges (1) that Jakobsson fails to show or reasonably suggest this
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`claimed feature (see Pet. at 64), and (2) Schutzer merely discloses that the “card
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`issuer” can associate an “anonymous card number” with the “proper cardholder.”
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`See Pet. at 65. At no point in the Petition (or in its Opposition to Patent Owner’s
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`MTA) does Petitioner point to any disclosure of the “networked validation-
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`information entity
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`373
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`performing the mapping between multi-digit 1D code to a
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`circumvention of this Board’s order on page limits. See Paper No. 17. Petitioner’s
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`incorporated arguments with respect this these limitations should therefore be
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`disregarded.
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`3
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`Importantly,
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`the claimed “networked validation-information entity” in the
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`substitute claims is the same claimed “second deVice” that is “configured to enable
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`15
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`[credit and/or debit card/financial account] number. Ex. 2021 at 11 37. Petitioner
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`had therefore failed to meet its burden to establish any of the substitute claims are
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`obvious.
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`B.
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`Using “Three Separable Fields” Is Not Obvious
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`Substitute claim 13 recites that the claimed “one or more signals” has “at least
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`three separable fields” that include “the first authentication information, an indicator
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`of biometric authentication, and a time varying value in response to valid
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`authentication of the first biometric information.” Petitioner alleges that Jakobsson
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`discloses this claimed feature (Op. at 18), but Jakobsson merely discloses
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`transmitting a unitary authentication code (either one of code 291, 292, or 293) to
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`verifier 105. Ex. 1113 at W[0060], [0071]. In other words, there is no disclosure in
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`Jakobsson of transmitting authentication code 291, in addition to the values (E) and
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`the financial transaction based on authentication of the user.” Petitioner fails to even
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`allege that the prior art of record includes such an entity, nor could it since neither
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`Jakobsson, Maritzen, nor Schutzer, alone or in combination, suggest using the same
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`entity to both map the multi-digit ID to a card/account number and enable the
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`financial transaction.
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`16
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`(T), all in the same transmission. Ex. 2021 at 11 38.
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`Moreover, as explained in more detail
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`in Patent Owner’s
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`sur-reply,
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`Petitioner’s mapping of the three recited types of information would require
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`transmitting authentication code 291 (Petitioner’s alleged “first authentication
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`information”), in addition to the values (E) (Petitioner’s alleged “indicator of
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`biometric authentication”) and (T) (Petitioner’s alleged “time varying value”), all in
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`the same transmission—which of course is not disclosed in Jakobsson.4 Id. at 11 39.
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`Moreover, as explained by the author of the reference, Dr. Jakobsson, “[t]he
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`one-way function is a critical aspect of [the invention described in the Jakobsson
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`reference].” Ex. 2017 at 127:6-20; Ex. 2021 at 11 40. While certain embodiments of
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`Jakobsson discuss prepending and appending certain inputs, a one-way function is
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`always used (optionally in conjunction with other functions). Dr. Jakobsson
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`explained that a person of ordinary skill in the art would understand that all the
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`4
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`In its Opposition, Petitioner now appears to cite to (E), (T), and (P) as the three
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`claimed types of information, but does not explain why “user data value (P)” can
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`qualify as the claimed “first authentication information.” Op. at 18. Regardless,
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`there is no disclosure in Jakobsson that the unitary authentication code includes
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`“three separable fields” after the code is generated and transmitted.
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`17
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`Case No. lPR2018-00809
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`U.S. Patent No. 9,530,137
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`examples given involve a one-way function because otherwise the system would not
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`be secure. EX. 2017 at 134:1-13; see also id. at 134:19-135:7 (explaining that it
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`would be “clear to a person of skill in the art reading this that there has to be a one-
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`way function”). Even Petitioner’s new expert, Dr. Juels, acknowledged at his
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`deposition that merely concatenating or XOR’ing inputs together, without more, was
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`an inadequate way to generate or protect
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`the authentication code from
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`eavesdroppers. Ex. 2019 at 30:3-21 (eavesdropper can recover inputs if mere
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`concatenation were used); 34:12-36:12 (same); 40:14-41:6 (adversary can recover
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`input if mere XOR is used as the combination function).
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`Since a one-way function must be used at some point during the authentication
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`code generation process in Jakobsson, the resultant unitary authentication code
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`does not have three separable fields that
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`include all
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`three pieces of claimed
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`information. EX. 2021 at 11 41.
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`In other words, a POSITA would not recognize
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`Jakobsson’s system to transmit a code as having three separable fields including the
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`first authentication information, an indicator of biometric authentication, and a time
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`varying value because the combination function transformed those pieces of
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`18
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`Case No. lPR2018-00809
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`US. Patent No. 9,530,137
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`information into a unitary authentication code prior to transmissions Id.
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`C.
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`Substitute Dependent Claim 18 Is Not Obvious
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`Substitute claim 18 recites “the first authentication information further
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`including a digital signature generat
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