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
`_________________________________________
`
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`CONDITIONAL MOTION TO AMEND
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`Table of Contents
`
`Page
`
`I. 
`II. 
`
`INTRODUCTION ........................................................................................... 1 
`PROCEDURAL HISTORY ............................................................................ 1 
`A.  USR Disclaimed Claims 1-3, 5-8, 16-24, 26-30, And 37-38 Of The
`’539 Patent To Avoid A CBM Petition. ................................................ 1 
`USR Reintroduces The Subject Matter It Disclaimed. ......................... 2 
`B. 
`III.  ARGUMENT ................................................................................................... 2 
`A.  USR’s Presentation of Substitute Claim 47 Is Improper For Multiple
`Reasons. ................................................................................................. 2 
`1. 
`USR Failed To Meet Its Duty Of Candor Under 37 C.F.R. §
`42.11. ........................................................................................... 2 
`USR Is Estopped From Reintroducing The Financial Subject
`Matter From Disclaimed Claims 5-8, 17-20, And 26-30. .......... 3 
`Substitute Claims 39-47 Are Obvious Over Reber In View Of
`Franklin And Schutzer. ......................................................................... 4 
`1. 
`Substitute Claims 39, 44, 46, and 47 .......................................... 4 
`2. 
`Substitute Claims 40-43 and 45 ................................................ 18 
`The Substitute Claims 39-47 Are Ineligible Under 35 U.S.C. § 101.. 18 
`1. 
`Alice Step 1: The Substitute Claims Are Directed To An
`Abstract Idea ............................................................................. 19 
`Alice Step 2: The Remaining Limitations Of The Substitute
`Claims Add Nothing Inventive To The Abstract Idea. ............. 23 
`Substitute Limitations 39[h], 44[b], And 47[c] Do Not Satisfy 35
`U.S.C. § 112 ........................................................................................ 25 
`IV.  CONCLUSION .............................................................................................. 25 
`
`
`2. 
`
`2. 
`
`B. 
`
`C. 
`
`D. 
`
`i
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`INTRODUCTION
`
`I.
`
`USR’s proposed amendments seek to cover methods and systems that Reber
`
`and/or Franklin expressly disclose, or that would have been obvious over Schutzer.
`
`USR’s motion also tries to game the patent system by reintroducing claim elements
`
`relating to financial services that it previously disclaimed to avoid institution of a
`
`CBM proceeding. 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 be consistent with USR’s 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-
`
`00023 (-023 CBM). Thus, USR’s CMTA should be denied.
`
`II.
`
`PROCEDURAL HISTORY
`A. USR Disclaimed Claims 5-8, 17-20, And 26-30 Of The ’539 Patent
`To Avoid A CBM Petition.
`
`The present Petition, filed on April 12, 2018, challenged claims 1-3, 5-8, 16-
`
`24, 26-30, and 37-38 of the ’539 patent as unpatentable under 35 U.S.C. § 103.
`
`Concurrently therewith, Petitioner filed the -023 CBM demonstrating the invalidity
`
`of claims 1-38 of the ’539 patent under 35 U.S.C. § 101. See Apple Inc. v. USR,
`
`LLC., CBM2018-00023, Paper 3, Petition (PTAB Apr. 12, 2018). USR disclaimed
`
`claims 5-8, 17-20, and 26-30 on August 17, 2018 (Ex-2201), and argued in its
`
`POPR that its disclaimer rendered moot Petitioner’s arguments related to these
`
`1
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`claims. Apple Inc. v. USR, LLC., CBM2018-00023, Paper 9, POPR (PTAB Aug.
`
`21, 2018). This panel did not consider claims 5-8, 17-20, and 26-30 in either the
`
`institution decision in this proceeding or in denying institution of the -023 CBM.
`
`B. USR Reintroduces The Subject Matter It Disclaimed.
`
`USR now tries to take back its assertions to the Board by reintroducing
`
`subject matter plainly directed to covered business methods that it previously
`
`disclaimed in the -023 CBM proceeding. USR’s substitute claim limitations 47[f]
`
`and 47[g] recite a “public ID code that identifies a financial account” and that can
`
`be used “to obtain the financial account number associated with the entity.”
`
`Despite reintroducing financial subject matter, USR’s CMTA makes no reference
`
`to its disclaimer of claims 5-8, 17-20, and 26-30.
`
`III. ARGUMENT
`A. USR’s Presentation of Substitute Claim 47 Is Improper For
`Multiple Reasons.
`1.
`USR Failed To Meet Its Duty Of Candor Under 37 C.F.R. §
`42.11.
`
`As discussed above, USR’s substitute limitations 47[f] and 47[g] recite a
`
`2
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`“public ID code”1 for a “financial account number.” These limitations reintroduce
`
`financial subject matter that USR disclaimed to avoid CBM review of patent
`
`eligibility under § 101. By reintroducing these limitations now, USR has effected
`
`an end-run around the CBM review process. Though USR owed a duty of candor
`
`in its POR and CMTA, see 37 C.F.R. § 42.11; Lectrosonics, Inc. v. Zaxcom, Inc.,
`
`IPR2018-01129, -01130, Order, Paper No. 15, 5-6 (PTAB Feb. 25, 2019), 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.
`
`2.
`USR Is Estopped From Reintroducing The Financial
`Subject Matter From Disclaimed Claims 5-8, 17-20, And 26-30.
`
`“[W]here a party assumes a certain position in a legal proceeding, and
`
`
`1 USR disclaimed a nearly identical “public ID code” limitation in the parallel IPR
`
`and CBM proceedings relating to U.S. Patent No. 9,530,137 (“’137 patent”) in
`
`order to avoid CBM review and to moot one of the obviousness grounds cited in
`
`the IPR. See IPR-2018-00809, Ex-1001, ’137 Patent, cl. 8; see also Apple Inc. v.
`
`USR, LLC., IPR2018-00809, Exhibit-2003, Disclaimer (PTAB July 10, 2018).
`
`3
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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 5-8, 17-20, and 26-30 because its current position is clearly inconsistent
`
`with its earlier position in the -023 CBM proceeding. See id., 750. USR would
`
`also derive unfair advantage (to Petitioner’s detriment) if not estopped because it
`
`avoided institution of the -023 CBM altogether. See id., 751. The Board should
`
`not permit USR to reap the benefit of its inconsistent and misleading positions.
`
`B.
`Substitute Claims 39-47 Are Obvious Over Reber In View Of
`Franklin And Schutzer.
`1.
`
`Substitute Claims 39, 44, 46, and 47
`
`a)
`
`Limitations 39[b], 44[a], and 47[b]
`
`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” received “from [a/the] provider.”
`
`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 explained in the Petition (Pet., 33-35),
`
`a POSITA would have found it obvious to configure Reber’s transaction request to
`
`4
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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-varying multicharacter code]. Ex-1131,
`
`Reber, 5:17-19, 5:45-59.2 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 second data
`
`element) 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). Ex-1136, Shoup-Decl., ¶20
`
`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 front-
`
`
`2 As explained previously, the cited portions of Reber would have been obvious to
`
`combine. Pet., 23-31, 33-35; POR Reply II(A)(4)(b).
`
`5
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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 the Petition and discussed in Apple’s reply brief.
`
`Pet., 23-31, 33-35; POR Reply, § II(A)(4). Accordingly, limitations 39[b], 44[a],
`
`and 47[b] are obvious over Reber in view of Franklin. Ex-1136, Shoup-Decl., ¶22.
`
`b)
`
`Limitations 39[c] and 46[b]
`
`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.”
`
`First, 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 Pet.,
`
`33-35. 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 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
`
`6
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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. Ex-1136, Shoup-Decl., ¶24.
`
`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 code for
`
`comparison. Without extracting a time value, the MAC coding and comparator
`
`unit 82 could not accurately generate its own MAC for comparison. Ex-1136,
`
`7
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`
`Shoup-Decl., ¶25.
`
`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 of success 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,
`
`Pet., 23-31, 33-35. Accordingly, limitations 39[c] and 46[b] are obvious over
`
`Reber in view of Franklin. Ex-1136, Shoup-Decl., ¶26-27.
`
`c)
`
`Limitations 39[e] and 44[d]
`
`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).
`
`In the DI, the Board found that merchant validation followed by 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
`
`8
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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 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 the
`
`petition. Pet., 36-39; see also POR Reply, II(A)(2)(b). Accordingly, limitations
`
`39[e] and 44[d] are obvious over Reber in view of Franklin. Ex-1136, Shoup-
`
`Decl., ¶29-30.
`
`d)
`
`Limitation 39[h], 44[b], and 47[c]
`
`Reber in view of Franklin and European Patent Appl. No. 1,028,401 to
`
`9
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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.”
`
`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-10XX, ’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 this authentication
`
`procedure is designed to ensure that an authorized user is attempting to conduct the
`
`transaction before involving any other parties. Ex-1131, Reber, 4:18-20, 4:25-27,
`
`5:13-15; Ex-1132, Franklin, 2:22-27, 5:24-28; Ex-1136, Shoup-Decl., ¶32.
`
`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
`
`10
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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. Schutzer also explains that
`
`biometric authentication may be conducted by obtaining a biometric sample at the
`
`point-of-use and then transmitting that information to a remote server for
`
`authentication. Id., ¶¶12-13. Ex-1136, Shoup-Decl., ¶33.
`
`Because Reber and Franklin already disclose requiring 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. Ex-1130, Schutzer, ¶¶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 required in a particular implementation, it would have been
`
`11
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`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.
`
`Likewise, if conducting biometric authentication was more convenient in a
`
`particular setting, it would have been obvious to substitute biometric authentication
`
`for another method. Substituting biometric information for the PIN or passcode-
`
`based authentication procedures described in Reber and Franklin would have had
`
`the predictable result of, where necessary, enhancing or adapting the security
`
`protocol for transactions using proxy information. Ex-1136, Shoup-Decl., ¶34.
`
`Accordingly, limitations 39[h], 44[b], and 47[c] are obvious over Reber in view of
`
`Franklin. Ex-1136, Shoup-Decl., ¶35.
`
`e)
`
`Limitations 44[f] and 47[g](Third Party Limitation)
`
`Both Reber and Franklin render obvious substitute limitations 44[f] and
`
`12
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`47[g] that recite “the third party being a different entity from the secure registry.”
`
`As discussed in the Petition, Reber and Franklin both describe systems
`
`wherein an entity and a provider conduct a transaction using a time-varying
`
`multicharacter code that is validated at a secure registry. Pet., 32, 41. The secure
`
`registry then directs a third party (such as an issuing bank) to credit and debit
`
`specific financial accounts. For instance, Reber explains that once “[t]he computer
`
`64 authenticates the second data element,” the computer 64 may “direct[] 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.” Ex-1131, Reber, 6:17-28.
`
`Because Reber does not specify what party is “directed” by the computer 64, a
`
`POSITA would have understood that the computer 64 would “direct” a third party,
`
`such as an issuing institution. Indeed, Dr. Jakobsson agreed that the passage could
`
`be read to include a third party. Ex-1137, Jakobsson-Dep., 432:11-15 (“Q. Well,
`
`what do you interpret the word ‘directs’ to mean in that sentence? A. So it could
`
`be at least two things. One could be that it sends a signal to another party to cause
`
`that second party to perform this action....”). This conclusion is consistent with
`
`Reber’s disclosure since a party typically “directs” another to perform an action.
`
`Moreover, as a practical matter, a single party (such as the computer 64) is often
`
`not in control of both the account being debited and the account being credited.
`
`Ex-1136, Shoup-Decl, ¶37.
`
`13
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`Franklin likewise discloses a system involving a third-party backend.
`
`Specifically, Franklin discloses an issuing bank 26 that receives an external
`
`transaction number from the merchant as a proxy for a user’s actual credit card
`
`account number. Ex-1132, Franklin, 2:46-60, 5:59-65. Franklin further discloses
`
`that the issuing bank determines that the received number is a proxy, substitutes
`
`the user’s actual credit card information, and then processes the transaction using
`
`its existing processing system. Id., 2:61-3:6, 5:65-6:12. Although the issuing bank
`
`26 is depicted in the Figures as a single entity, Franklin is explicit that the issuing
`
`bank is not limited to a single system controlled by a single party. For instance,
`
`Franklin explains that although the issuing bank 26 is “labeled as a ‘bank’, the
`
`issuing bank 26 may represent other types of card-issuing institutions….” Id., 4:3-
`
`5. Franklin further teaches “that other participants may be involved in some
`
`phases of the transaction, such as an intermediary settlement institution, but these
`
`participants are not shown.” Id., 4:7-9. In addition, Franklin states that “[t]he bank
`
`26 has a computing center 32 … [that] may be implemented in other forms, such as
`
`a minicomputer, a PC server, a networked set of computers, and the like.” Id.,
`
`4:16-20. Ex-1136, Shoup-Decl., ¶38.
`
`In view of these disclosures, to the extent that Reber itself does not expressly
`
`teach that a third party separate from the computer 64 [secure registry] could
`
`complete the transaction, Franklin teaches that one front-end party of bank
`
`14
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`computing center 32 (comprising elements 60, 62, 80, and 82) could receive and
`
`process proxy information (such as a Reber’s second data element or Franklin’s
`
`external card number) before passing the actual account number on to a bank
`
`processing system 84 controlled by a different party on a remote networked
`
`computer. Ex-1132, Franklin, 11:39-40 (“The FIG. 7 illustration is simplified for
`
`discussion purposes, as other participants will most likely be involved.”)
`
`(emphasis added); see also id., 11:39-12:43. Thus, because Reber in view of
`
`Franklin discloses conducting transactions involving an entity, provider, secure
`
`registry, and a separate third party, a POSITA would have found this limitation
`
`obvious. A POSITA would have been motivated to combine these disclosures and
`
`had a reasonable expectation of success for the reasons set forth in the Petition.
`
`Pet., 23-31, 40-42. Accordingly, limitations 44[f] and 47[g] are obvious over
`
`Reber in view of Franklin. Ex-1136, Shoup-Decl., ¶39-40.
`
`f)
`
`Limitation 47[f] and 47[g](Public ID Code Limitation)
`
`Reber in view of Franklin and Schutzer renders obvious proposed substitute
`
`limitations 47[f] and 47[g] that recite a “processor configured to ... access from the
`
`database … information including account identifying information that includes a
`
`public ID code that identifies a financial account number associated with the
`
`entity” and “use[] the public ID code to obtain the financial account number
`
`associated with the entity.”
`
`15
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`As discussed above, Reber in view of Franklin discloses a system wherein
`
`the computer 64 [secure registry] receives a one-time code that is used to approve
`
`a transaction. Supra, Section III(B)(1)(a). Once the one-time code is validated, the
`
`secure registry can “direct” a third party to credit and debit accounts associated
`
`with a financial transaction. Id. Because the direction to credit or debit a
`
`particular account is passed to a third party, a POSITA would have understood that
`
`the identifying information, such as an account number, must be transmitted over a
`
`network connection, such as Reber’s electronic network 22. See Ex-1131, Reber,
`
`5:28-30. In Reber and Franklin, the account number that is passed to the third
`
`party is the user’s actual account number. Id., 6:25-28; Ex-1132, Franklin, 12:27-
`
`33; Ex-1136, Shoup-Decl., ¶42.
`
`As explained above, supra III(B)(1)(d), Schutzer teaches an “alternate
`
`account number” [Public ID Code] that is used in place of a user’s actual credit
`
`card number in order to protect sensitive data during transmission (including
`
`transmissions over encrypted payment networks). Ex-1130, Schutzer ¶¶3, 11, 27
`
`(“At S6, the merchant (acquiring) bank’s server 18 receives the request for
`
`authorization and sends the request with the alternate card number over the card
`
`association network 20 to the card issuer’s server 14.”) (emphasis added), 30-31,
`
`Figs. 3-4; Ex-1136, Shoup-Decl., ¶43.
`
`A POSITA would have found it obvious to use a public ID Code, such as
`
`16
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`Schutzer’s alternate card number, which is associated with the user’s actual
`
`account number when the computer 64 [secure registry] of Reber directs the third
`
`party to credit or debit user accounts [account identifying information that
`
`includes a public ID code that identifies a financial account number associated
`
`with the entity]. Upon receipt, a POSITA would have found it obvious for the
`
`third party to match the public ID code to the user’s actual account number to
`
`execute the transfer of funds [use the public ID code to obtain the financial
`
`account number associated with the entity]. A POSITA would have been
`
`motivated to do so based on Schutzer’s teaching that the use of proxy information
`
`can provide an additional layer of protection for sensitive user data even where the
`
`connection is otherwise secure. See, e.g., Ex-1130, Schutzer, ¶19 (“the merchant’s
`
`bank sends the anonymous card number over the card association network to the
`
`transaction card issuer.”) (emphasis added). This combination would have
`
`required little more than a simple substitution of one element (the user’s actual
`
`account number) with another (proxy information) to achieve predictable results
`
`(ensuring that the transaction is completed without interception of the user’s actual
`
`card number during transmission to the third party). A POSITA would have had a
`
`reasonable expectation that the modification would be successful in preventing
`
`interception of sensitive information at least because Schutzer describes its
`
`approach as easy to implement (via software) and effective. Id. Ex-1130,
`
`17
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`Schutzer, ¶¶8-10. Accordingly, limitations 47[f] and 47[g] are obvious over Reber
`
`in view of Franklin. Ex-1136, Shoup-Decl., ¶44-45.
`
`2.
`
`Substitute Claims 40-43 and 45
`
`Substitute Claims 40-43 and 45 correspond to original claims 2, 3, 16, 21,
`
`and 23 respectively and contain no new limitations. As such, they are obvious for
`
`the reasons set forth above and in the petition. Pet., 42-44, 48-50, 56-58, 60-61.
`
`C. The Substitute Claims 39-47 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 already challenged eligibility of the unamended claims
`
`under § 101. See Apple Inc. v. USR, CBM2018-00022, Petition, Paper No. 3,
`
`(PTAB Apr. 4, 2018) (institution denied as not directed to a covered business
`
`method). For at least the reasons documented in the -023 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
`
`18
`
`

`

`U.S. Patent No. 8,856,539
`Petitioner’s Opposition to Conditional Motion to Amend
`generic computer implementation” is insufficient to transform the idea into a
`
`patent-eligible invention. Id., 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 [