UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY, LLC,
`
`Patent Owner.
`
`_________________________________________
`
`Case IPR2018-00812
`U.S. Patent No. 8,856,539
`_________________________________________
`
`DECLARATION OF DR. VICTOR SHOUP IN SUPPORT OF
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`CONDITIONAL MOTION TO AMEND
`
`Apple 1136
`Apple v. USR
`IPR2018-00812
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY, LLC,
`
`Patent Owner.
`
`_________________________________________
`
`Case IPR2018-00812
`U.S. Patent No. 8,856,539
`_________________________________________
`
`DECLARATION OF DR. VICTOR SHOUP IN SUPPORT OF
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`CONDITIONAL MOTION TO AMEND
`
`Apple 1136
`Apple v. USR
`IPR2018-00812
`
`
`
`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`Table of Contents
`
`Page
`
`I.
`II.
`
`INTRODUCTION............................................................................... 1
`LEGAL PRINCIPLES.......................................................................... 2
`A.
`Claim Construction..................................................................... 2
`B. Obviousness............................................................................... 3
`C.
`Subject Matter Eligibility............................................................. 5
`D.
`Indefiniteness............................................................................. 6
`III. OPINIONS......................................................................................... 7
`A.
`Substitute Claims 39-47 Are Obvious Over Reber In View Of
`Franklin And Schutzer................................................................. 7
`1.
`Substitute Claims 39, 44, 46, and 47..................................... 7
`2.
`Substitute Claims 40-43 and 45 ......................................... 21
`The Substitute Claims 39-47 Are Ineligible Under 35 U.S.C. § 101. 21
`1.
`Alice Step 1: The Substitute Claims Are Directed to an
`Abstract Idea................................................................... 22
`Alice Step 2: The Remaining Limitations Of The Substitute
`Claims Add Nothing Inventive To The Abstract Idea............ 24
`Substitute Limitations 39[h], 44[b], and 47[c] Are Indefinite .......... 25
`C.
`IV. CONCLUSION................................................................................. 26
`V. AVAILABILITY FOR CROSS-EXAMINATION................................. 26
`VI. RIGHT TO SUPPLEMENT................................................................ 26
`VII. JURAT............................................................................................. 28
`
`B.
`
`2.
`
`i
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`
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`I, Victor Shoup, Ph.D., declare as follows:
`
`I.
`
`INTRODUCTION
`
`1.
`
`I have been retained by Apple to provide opinions in this proceeding
`
`relating to Universal Secure Registry’s (“USR” or “Patent Owner”) Conditional
`
`Motion to Amend (“CMTA”) the claims of U.S. Patent No. 5,856,839 (“’539
`
`patent”). I previously prepared and submitted a Declaration in support of the
`
`Petition in this proceeding, dated April 12, 2018.
`
`2.
`
`Since preparing my previous Declaration, I have reviewed the
`
`following additional materials in connection with this Supplemental Declaration:
`
`(cid:120) The Board’s Decision on Institution (“DOI”)
`
`(cid:120) USR’s Patent Owner Preliminary Response (“POPR”)
`
`(cid:120) USR’s Patent Owner Response (“POR”)
`
`(cid:120) Dr. Jakobsson’s Declaration in Support of USR’s POPR (Ex.
`
`2101)
`
`(cid:120) Dr. Jakobsson’s Declaration in Support of USR’s POR (Ex.
`
`2108)
`
`(cid:120) USR’s CMTA
`
`(cid:120) Dr. Jakobsson’s Declaration in Support of USR’s CMTA (Ex.
`
`2107)
`
`(cid:120) The transcript of Dr. Jakobsson’s April 24, 2019, deposition
`
`1
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`
`(Ex. 1137)
`
`3. My background and qualifications are summarized in Section I of my
`
`previous Declaration and my curriculum vitae, which was attached thereto as
`
`Appendix A.
`
`4.
`
`I am being compensated at my normal consulting rate for my work.
`
`My compensation is not dependent on the outcome of this IPR proceeding or the
`
`related litigation, and does not affect the substance of my statements in this
`
`Supplemental Declaration.
`
`5.
`
`I have no financial interest in Petitioner. I have no financial interest in
`
`the ’539 patent.
`
`II.
`
`LEGAL PRINCIPLES
`
`6.
`
`I am not an attorney. For purposes of this Supplemental Declaration, I
`
`have been informed about certain aspects of the law that are relevant to my
`
`analysis and opinions.
`
`A.
`
`7.
`
`Claim Construction
`
`I have been informed that claim construction is a matter of law and
`
`that the final claim construction will be determined by the Board. I have been
`
`informed that the claim terms in an IPR review should be given their broadest
`
`reasonable construction in light of the specification as commonly understood by a
`
`person of ordinary skill in the art (“POSITA”). I have applied this standard in my
`
`2
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`
`analysis.
`
`B.
`
`8.
`
`Obviousness
`
`I have been informed and understand that a patent claim can be
`
`considered to have been obvious to a POSITA at the time the application was filed.
`
`I understand that this means that, even if all the requirements of a claim are not
`
`found in a single prior art reference, the claim is not patentable if the differences
`
`between the subject matter in the prior art and the subject matter in the claim
`
`would have been obvious to a POSITA at the time the application was filed.
`
`9.
`
`I have been informed and understand that a determination of whether
`
`a claim would have been obvious should be based upon several factors, including,
`
`among others:
`
`(cid:120) the level of ordinary skill in the art at the time the application was
`
`filed;
`
`(cid:120) the scope and content of the prior art; and
`
`(cid:120) what differences, if any, existed between the claimed invention and
`
`the prior art.
`
`10.
`
`I have been informed and understand that the teachings of two or
`
`more references may be combined in the same way as disclosed in the claims, if
`
`such a combination would have been obvious to a POSITA. In determining
`
`whether a combination based on either a single reference or multiple references
`
`3
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`would have been obvious, it is appropriate to consider, among other factors:
`
`(cid:120) whether the teachings of the prior art references disclose known
`
`concepts combined in familiar ways, and when combined, would yield
`
`predictable results;
`
`(cid:120) whether a POSITA could implement a predictable variation, and
`
`would see the benefit of doing so;
`
`(cid:120) whether the claimed elements represent one of a limited number of
`
`known design choices, and would have a reasonable expectation of
`
`success by those skilled in the art;
`
`(cid:120) whether a POSITA would have recognized a reason to combine
`
`known elements in the manner described in the claim;
`
`(cid:120) whether the proposed modification would have a reasonable
`
`expectation of success by those skilled in the art;
`
`(cid:120) whether there is some teaching or suggestion in the prior art to make
`
`the modification or combination of elements claimed in the patent;
`
`and
`
`(cid:120) whether the innovation applies a known technique that had been used
`
`to improve a similar device or method in a similar way.
`
`11.
`
`I have been informed and understand that a POSITA has ordinary
`
`creativity, and is not an automaton.
`
`4
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`I have been informed and understand that in considering obviousness,
`
`12.
`
`it is important not to determine obviousness using the benefit of hindsight derived
`
`from the patent being considered.
`
`13.
`
`I have also been informed that objective evidence can also be relevant
`
`to the question of obviousness. I understand that such evidence, which is
`
`sometimes referred to as “secondary considerations,” can include evidence of
`
`commercial success, long-felt but unsolved needs, failure of others, copying by
`
`others, and unexpected results. I also understand that when considering the
`
`strength of secondary considerations, weight is not given unless a nexus is
`
`established between the rebuttal evidence and the claimed invention. In other
`
`words, secondary considerations only carry weight when the secondary
`
`considerations are attributable to the claimed invention.
`
`C.
`
`14.
`
`Subject Matter Eligibility
`
`I have been informed that laws of nature, abstract ideas, and natural
`
`phenomena are not patent eligible.
`
`15.
`
`I have been informed that an application of an abstract idea, such as a
`
`mathematical formula, may be patent eligible if the patent claims add significantly
`
`more than routine, conventional activity to the underlying concept.
`
`16.
`
`I have been informed that an important and useful clue to patent
`
`eligibility is whether a claim is tied to a particular machine or apparatus or
`
`5
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`transforms a particular article into a different state or thing, according to the so-
`
`called machine-or-transformation test. I have been informed that the machine-or-
`
`transformation test is not the only test for patent eligibility.
`
`17.
`
`I have been informed that the Supreme Court’s decision in the Alice
`
`Corp. case in 2014 articulates a two-step framework for distinguishing patents that
`
`claim ineligible abstract ideas from those that claim eligible applications of those
`
`ideas. In step one, the court must determine whether the claims at issue are
`
`directed to a patent-ineligible abstract concept. If the claim is directed to an
`
`abstract idea, the analysis proceeds to step two. In step two, I understand that the
`
`elements of the claim 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. I am informed
`
`that a patentee cannot circumvent the prohibition on patenting abstract ideas by
`
`limiting the idea to a particular technological environment, nor by adding
`
`insignificant postsolution activity, or well-understood, routine, conventional
`
`features.
`
`D.
`
`18.
`
`Indefiniteness
`
`I have been informed that a patent claims must be definite. To be
`
`definite, I understand that patent claims must particularly point out and distinctly
`
`6
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`
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`claim the subject matter that the patentee regards as his or her invention. Definite
`
`claims definite claims clearly and precisely inform persons of ordinary skilled in
`
`the art of the boundaries of protected subject matter. I understand that determining
`
`if a claim is definite requires a determination of whether those skilled in the art
`
`would understand what is claimed when the claim is read in light of the
`
`specification.
`
`III. OPINIONS
`
`Substitute Claims 39-47 Are Obvious Over Reber In View Of
`A.
`Franklin And Schutzer.
`
`1.
`
`Substitute Claims 39, 44, 46, and 47
`
`a)
`
`Limitations 39[b], 44[a], and 47[b]
`
`19. Reber alone or in view of Franklin renders obvious substitute
`
`limitations 39[b], 44[a], and 47[b] that recite a “transaction request” or a “time-
`
`varying multicharacter code from [a/the] provider.”
`
`20. Reber discloses transaction data [transaction request] generated by
`
`the user device [entity] that is initially transmitted to the computer 20 [provider].
`
`Ex-1131, Reber, 5:16-26, 5:45-59, 6:14-29. As I explained in my prior declaration
`
`(Ex-1102, Shoup-Decl., ¶¶104-08), a POSITA would have found it obvious to
`
`configure Reber’s transaction request to include a first data element containing
`
`information about a merchant/provider [indication of the provider] and a second
`
`data element containing a time-varying code corresponding to an entity [time-
`
`7
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`varying multicharacter code]. Ex-1131, Reber, 5:17-19, 5:45-59. 1 A POSITA
`
`would have understood that Reber teaches the computer 20 [provider] may receive
`
`and subsequently transmit (via the electronic network 22) the transaction data
`
`[transaction request] to the computer 64 [secure registry]. Ex-1131, Reber,
`
`5:46-48 (“the computer 64 receives transaction data via the electronic network
`
`22”); see also id., 5:17-19. Thereafter, the computer 64 processes the received data
`
`elements (including the data element [time-varying multicharacter code]) and
`
`completes the transaction in conjunction with a third party. Id., 6:25-29 (“the
`
`computer 64 directs that an account for the first party be credited by the transaction
`
`amount, and an account for the second party be debited by the transaction
`
`amount”) (emphasis added).
`
`21.
`
`To the extent Reber alone does not render this limitation obvious, a
`
`POSITA would have looked to Franklin, which discloses that the merchant
`
`[provider] submits a request for authorization [transaction request] including a
`
`proxy transaction number [time-varying multicharacter code] to the issuing bank
`
`1 USR argues in its POR that it would not have been obvious to combine the cited
`
`portions of Reber. USR’s argument is incorrect for the reasons set forth in my
`
`prior declaration and my declaration in support of Apple’s Reply. Ex-1102,
`
`Shoup-Decl., ¶¶88-99, 109-118; Ex-1135, Shoup-Decl., ¶¶43-45.
`
`8
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`front-end [secure registry] for processing in conjunction with a third party. See
`
`Ex-1132, Franklin, 11:33-49, 12:30-32. A POSITA would have been motivated to
`
`combine the disclosures of Reber and Franklin to arrive at these claim limitations
`
`for the same reasons set forth in my prior declaration and discussed in my
`
`declaration in support of Apple’s reply brief. Ex-1102, Shoup-Decl., ¶¶88-99,
`
`104-08; Ex-1135, Shoup-Decl., ¶¶39-45.
`
`22.
`
`Accordingly, limitations 39[b], 44[a], and 47[b] are obvious over
`
`Reber in view of Franklin.
`
`b)
`
`Limitations 39[c] and 46[b]
`
`23. Reber alone or in view of Franklin renders obvious substitute
`
`limitations 39[c] and 46[b] that recite “the transaction request including a time
`
`value representative of when the time-varying multicharacter code was generated”
`
`and “extract the time value from the transaction request.”
`
`24. Both Reber and Franklin disclose the claimed transaction request as
`
`set forth above with respect to limitations 39[b], 44[a], and 47[b]. See also Ex-
`
`1102, Shoup-Decl., ¶¶104-08. Reber further discloses that the transaction data
`
`[transaction request] may contain information sufficient for either the computer
`
`20 [provider] or the computer 64 [secure registry] to generate transaction records
`
`that include, for instance, the date and time of the transaction. Ex-1131, Reber,
`
`5:33-38. A POSITA would have understood that to generate such a record, time
`
`9
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`information could either be “extracted” from the transaction data or generated at
`
`the computer 20 or computer 64. Because the time-varying second data element is
`
`generated concurrent with the time of the transaction, the second data element
`
`could include “a time value representative of when the time-varying multicharacter
`
`code was generated,” id., 3:4-8, 3:20-25, which could be “extracted” from the
`
`transaction data [transaction request] for incorporation into the record generated
`
`by the computer 20 or the computer 64. Id., 5:33-38. Therefore, Reber alone
`
`renders this limitation obvious.
`
`25.
`
`To the extent Reber alone does not render this limitation obvious, a
`
`POSITA would have looked to Franklin, which discloses the transmission of a
`
`request for authorization [transaction request] by the merchant [provider] that
`
`includes transaction-specific data, including the time and date. Ex-1132, Franklin,
`
`11:33-38. As part of processing the transaction request, Franklin discloses that
`
`“[t]he account manager 60 submits the private key, the customer-related data, and
`
`the transaction-specific data to the MAC coding and comparator unit 82,” which
`
`uses that data to generate a “test MAC” to compare to the received MAC for
`
`validation. Id., 12:11-26, see also id., 2:26-38, 5:24-39, 9:40-55, cl. 3. Because
`
`the test MAC is generated based on the same data as the received MAC, a POSITA
`
`would have understood that the time value is “extracted” from the transaction
`
`request for use by the MAC coding and comparator unit 82 to generate its own
`
`10
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`code for comparison. Without extracting a time value, the MAC coding and
`
`comparator unit 82 could not accurately generate its own MAC for comparison.
`
`26. A POSITA would have been motivated to combine Franklin’s known
`
`technique of extracting a time value from a received code with Reber’s code-based
`
`transaction system to generate a data record based on received information.
`
`Incorporating the time information into Reber’s one-time code would have
`
`increased efficiency since it would have eliminated the need to separately receive
`
`time data with the transaction. A POSITA would have had a reasonable
`
`expectation that this combination would be successful because both Reber and
`
`Franklin disclose that various types of information can be ascertained from
`
`transmitted codes for use by the receiving party. Ex-1131, Reber, 6:17-28; Ex-
`
`1132, Franklin, 7:65-8:14, Figs. 5-6; see also, Ex-1102, Shoup-Decl., ¶¶88-99,
`
`104-08.
`
`27.
`
`Accordingly, limitations 39[c] and 46[b] are obvious over Reber in
`
`view of Franklin.
`
`c)
`
`Limitations 39[e] and 44[d]
`
`28. Reber alone or in view of Franklin renders obvious proposed
`
`substitute limitations 39[e] and 44[d] that recite “validate an identity of the
`
`provider and then execute a restriction mechanism.” (emphasis added).
`
`29.
`
`In the DI, the Board found that merchant validation followed by
`
`11
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`subsequent access to data was sufficient to meet this claim limitation. DI, 14-16.
`
`That is precisely what Reber and Franklin disclose. Both references emphasize
`
`protecting account identifying information and other sensitive information
`
`(including from dishonest merchants). Ex-1131, Reber, 1:46-49, 2:29-32; Ex-
`
`1132, Franklin, 1:48-54, 11:38-47. In view of this emphasis, a POSITA would
`
`have found it obvious to use the received transaction data of Reber to ensure both
`
`that the merchant is trustworthy [validate an identity of the provider] and is
`
`entitled to access the data needed to conduct the transaction [restriction
`
`mechanism/access restrictions]. A POSITA would have understood, based on
`
`both Reber’s and Franklin’s repeated teachings to prevent unauthorized access to
`
`sensitive data (Ex-1131, Reber, 1:46-48, 2:29-31; Ex-1132, Franklin, 1:39-49) that
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`such access should not be provided absent some determination that the merchant
`
`was entitled to access that data. Because the only data the computer 64 receives
`
`about the transaction is the transaction data (i.e., Reber’s first data element
`
`[indication of the provider] and second data element [time-varying
`
`multicharacter code]), a POSITA would have further understood that the
`
`determination of compliance could be made based on only that received transaction
`
`data. Id. A POSITA would have been motivated to combine these disclosures for
`
`the reasons set forth in my prior declaration. Ex-1102, Shoup-Decl., ¶¶112-18; see
`
`also Ex-1135, Shoup-Decl., ¶¶22-24.
`
`12
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`30. Accordingly, limitations 39[e] and 44[d] are obvious over Reber in
`
`view of Franklin.
`
`d)
`
`Limitation 39[h], 44[b], and 47[c]
`
`31. Reber in view of Franklin and European Patent Appl. No. 1,028,401
`
`to Schutzer (“Schutzer”) renders obvious substitute limitations 39[h], 44[b], and
`
`47[c] that recite “wherein the identity of the entity is verified using a biometric.”
`
`32. Although Reber and Franklin do not explicitly discuss the use of
`
`biometric authentication, Reber teaches that its user device stores a secret key that
`
`a POSITA would have understood needs to be protected from unauthorized access.
`
`Ex-1131, Reber, 7:42-48 (incorporating by reference teachings regarding time-
`
`varying codes from U.S. Patent No. 5,168,520); Ex-1138, ’520 patent, 3:31-36
`
`(describing a “stored static value” in a user device used to generate a time-varying
`
`code). Additionally, Franklin teaches the user to authenticate themselves at their
`
`device prior to conducting a transaction. For instance, Franklin teaches that prior
`
`to granting the user access to a proxy card number, the customer 22 must invoke
`
`the software module and enter a password to gain access to the secure data, which
`
`is then used to generate a proxy card number and complete the transaction. Ex-
`
`1132, Franklin, 5:24-28. A POSITA would have understood that the purpose of
`
`this authentication procedure is to ensure that an authorized user is attempting to
`
`conduct the transaction before involving any other parties. Ex-1131, Reber, 4:18-
`
`13
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`20, 4:25-27, 5:13-15; Ex-1132, Franklin, 2:22-27, 5:24-28.
`
`33.
`
`Schutzer discloses a system for performing transactions using proxy
`
`information that closely resembles both Reber and Franklin. For instance,
`
`Schutzer discloses using a time-varying, one-time “alternate card number” in place
`
`of a user’s actual credit card number in a transaction. Ex-1130, Schutzer, ¶¶11, 19.
`
`An issuing bank server authenticates the one-time card number and replaces it with
`
`the user’s actual card number; then a transaction is processed according to
`
`traditional protocols. Id., ¶19. Like Franklin, Schutzer discloses that a user must
`
`be authenticated prior to accessing software used to generate proxy card
`
`information needed to conduct a transaction. Id., ¶¶12 (“The transaction card user
`
`can authenticate . . . by entering transaction card user information at a computing
`
`device…coupled to the card issuer's server.”); 14. Schutzer explains that the
`
`“transaction card user information” used to conduct this authentication may
`
`comprise, for example, “a biometric sample.” Id., ¶13.
`
`34. Because Reber and Franklin already disclose authentication prior to
`
`accessing sensitive data, a POSITA would have found it obvious to incorporate
`
`Schutzer’s teachings of biometric authentication (either locally or remotely) into
`
`the framework of Reber. Id., ¶¶13, 14. The addition of Schutzer’s technique to
`
`Reber and Franklin would have been a simple substitution (or combination) of
`
`well-known prior art elements. For instance, if an additional layer of security was
`
`14
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`required in a particular implementation, it would have been obvious to add
`
`biometric authentication to the use of a PIN or password. Adding an off-the-shelf
`
`biometric sensor would have been trivial and would not have required large scale
`
`architectural changes, since Schutzer explains that a biometric sample could be
`
`collected using a connected input device, which even the ’539 patent admits was
`
`well known in the art prior to 2001. Id., ¶35; Ex-1101, ’539 patent, 4:4-12, 6:34-
`
`40; Ex-1137, Jakobsson-Dep., 307:18-20, 322:5-12. A POSITA would have had a
`
`reasonable expectation that the modification would be successful in improving the
`
`security protocol at least because Schutzer describes its approach as effective and
`
`because existing biometric scanners could already be used successfully in
`
`authentication frameworks. Id.; Ex-1130, Schutzer, ¶¶8-10, 13-14. Likewise, if
`
`conducting biometric authentication was more convenient in a particular setting, it
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`would have been obvious to substitute biometric authentication for another
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`method. Substituting biometric information for the PIN or passcode-based
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`authentication procedures described in Reber and Franklin would have had the
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`predictable result of, where necessary, enhancing or adapting the security protocol
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`for transactions using proxy information. Id.
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`35. Accordingly, limitations 39[h], 44[b], and 47[c] are obvious over
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`Reber in view of Franklin.
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`e)
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`Limitations 44[f] and 47[g]
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`15
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`36. Both Reber and Franklin render obvious substitute limitations 44[f]
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`and 37[g] that recite “the third party being a different entity from the secure
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`registry.”
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`37. As discussed in my prior declaration, Reber and Franklin both
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`describe systems wherein an entity and a provider conduct a transaction using a
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`time-varying multicharacter code that is validated at a secure registry. Ex-1102,
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`Shoup-Decl., ¶¶100-03, 119-25. The secure registry then directs a third party
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`(such as an issuing bank) to credit and debit specific financial accounts. For
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`instance, Reber explains that once “[t]he computer 64 authenticates the second data
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`element,” the computer 64 may “direct[] that an account for the first party be
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`credited by the transaction amount, and an account for the second party be debited
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`by the transaction amount.” Ex-1131, Reber, 6:17-28. Because Reber does not
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`specify what party is “directed” by the computer 64, a POSITA would have
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`understood that the computer 64 would “direct” a third party, such as an issuing
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`institution. This conclusion is consistent with Reber’s disclosure, since a party
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`typically “directs” another to perform an action. Moreover, as a practical matter, a
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`single party (such as the computer 64) is often not in control of both the account
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`being debited and the account being credited.
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`38.
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`Franklin likewise discloses a system involving a third-party backend.
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`Specifically, Franklin discloses an issuing bank 26 that receives an external
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`16
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`transaction number from the merchant as a proxy for a user’s actual credit card
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`account number. Ex-1132, Franklin, 2:46-60, 5:59-65. Franklin further discloses
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`that the issuing bank determines that the received number is a proxy, substitutes
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`the user’s actual credit card information, and then processes the transaction using
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`its existing processing system. Id., 2:61-3:6, 5:65-6:12. Although the issuing bank
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`26 is depicted in the Figures as a single entity, Franklin is explicit that the issuing
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`bank is not limited to a single system controlled by a single party. For instance,
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`Franklin explains that although the issuing bank 26 is “labeled as a ‘bank’, the
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`issuing bank 26 may represent other types of card-issuing institutions….” Id., 4:3-
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`5. Franklin further teaches “that other participants may be involved in some
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`phases of the transaction, such as an intermediary settlement institution, but these
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`participants are not shown.” Id., 4:7-9. In addition, Franklin states that “[t]he bank
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`26 has a computing center 32 … [that] may be implemented in other forms, such as
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`a minicomputer, a PC server, a networked set of computers, and the like.” Id.,
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`4:16-20.
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`39.
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`In view of these disclosures, to the extent that Reber itself does not
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`expressly teach that a third party separate from the computer 64 [secure registry]
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`could complete the transaction, Franklin teaches that one front-end party of bank
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`computing center 32 (comprising elements 60, 62, 80, and 82) could receive and
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`process proxy information (such as a Reber’s second data element or Franklin’s
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`17
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`external card number) before passing the actual account number on to a bank
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`processing system 84 controlled by a different party on a remote networked
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`computer. Ex-1132, Franklin, 11:39-40 (“The FIG. 7 illustration is simplified for
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`discussion purposes, as other participants will most likely be involved.”)
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`(emphasis added); see also id., 11:39-12:43. Thus, because Reber in view of
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`Franklin discloses conducting transactions involving an entity, provider, secure
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`registry, and a separate third party, a POSITA would have found this limitation
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`obvious. A POSITA would have been motivated to combine these disclosures and
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`would have had a reasonable expectation of success for the reasons set forth in my
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`prior declaration. Ex-1102, Shoup-Decl., ¶¶88-99, 119-25.
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`40. Accordingly, limitations 44[f] and 47[g] are obvious over Reber in
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`view of Franklin.
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`f)
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`Limitation 47[f] and 47[g]
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`41. Reber in view of Franklin and Schutzer renders obvious proposed
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`substitute limitations 47[f] and 47[g] that recite a “processor configured to ...
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`access from the database … information including account identifying information
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`that includes a public ID code that identifies a financial account number associated
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`with the entity” and “use[] the public ID code to obtain the financial account
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`number associated with the entity.”
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`42. As discussed above, Reber in view of Franklin discloses a system
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`18
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`wherein the computer 64 [secure registry] receives a one-time code that is used to
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`approve a transaction. Supra, Section III(A)(1)(a). Once the one-time code is
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`validated, the secure registry can “direct” a third party to credit and debit accounts
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`associated with a financial transaction. Id. Because the direction to credit or debit
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`a particular account is passed to a third party, a POSITA would have understood
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`that the identifying information, such as an account number, must be transmitted
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`over a network connection, such as Reber’s electronic network 22. See Ex-1131,
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`Reber, 5:28-30. In Reber and Franklin, the account number that is passed to the
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`third party is the user’s actual account number. Id., 6:25-28; Ex-1132, Franklin,
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`12:27-33.
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`43. As explained above, supra III(A)(1)(d), Schutzer teaches an “alternate
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`account number” [Public ID Code] that is used in place of a user’s actual credit
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`card number in order to protect sensitive data during transmission (including
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`transmissions over encrypted payment networks). Ex-1130, Schutzer ¶¶3, 11, 27
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`(“At S6, the merchant (acquiring) bank’s server 18 receives the request for
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`authorization and sends the request with the alternate card number over the card
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`association network 20 to the card issuer’s server 14.”) (emphasis added), 30-31,
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`Figs. 3-4.
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`
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`44. A POSITA would have found it obvious to use a public ID Code, such
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`as Schutzer’s alternate card number, which is associated with the user’s actual
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`19
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`U.S. Patent No. 8,856,539
`Declaration of Dr. Shoup in Support of Petitioner’s Opposition
`to Patent Owner’s Conditional Motion to Amend
`account number when the computer 64 [secure registry] of Reber directs the third
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`party to credit or debit user accounts [account identifying information that
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`includes a public ID code that identifies a financial account number associated
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`with the entity]. Upon receipt, a POSITA would have found it obvious for the
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`third party to match the public ID code to the user’s actua
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