`_____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
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`VISA INC., and VISA U.S.A. INC., and APPLE INC.
`Petitioner,
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`v.
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`UNIVERSAL SECURITY REGISTRY, LLC,
`Patent Owner
`_____________
`
`IPR2018-01350
`Patent 8,856,539 B2
`____________
`
`Record of Oral Hearing
`Held on November 21, 2019
`_____________
`
`BEFORE: PATRICK R. SCANLON, GEORGIANNA W. BRADEN,
`and JASON W. MELVIN, Administrative Patent Judges.
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`Case IPR2018-01350
`Patent 8,856,539 B2
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`APPEARANCES
`
`ON BEHALF OF PETITIONER:
`MATTHEW A. ARGENTI, ESQUIRE
`JAMIE YOO OTTO, ESQUIRE
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto, CA 94304
`650-493-9300
`
`MONICA GREWAL, ESQUIRE
`WILMER CUTLER PICKERING HALE and DORR LLP
`60 State Street
`Boston, MA 02109
`617-526-6223
`
`
`ON BEHALF OF THE PATENT OWNER:
`CHRISTOPHER A. MATHEWS, ESQUIRE
`TIGRAN GULEDJIAN, ESQUIRE
`JAMES M. GLASS, ESQUIRE
`QUINN EMANUEL URQULHART & SULLIVAN, LLP
`865 South Figueroa Street
`10th Floor
`Los Angeles, CA 90017
`213-443-3261
`
`ALSO PRESENT: DANIELLE JACKSON, STEPHEN YOUNG,
`ARTHUR
`HAGOPIAN, KENNETH WEISS.
`
`
`
`The above-entitled matter came on for hearing on November 21, 2019,
`commencing at 1:00 p.m., at the United States Patent and Trademark Office,
`USPTO Madison Building, 600 Dulany Street, Alexandria, VA 22314.
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`(Proceedings begin at 1:00 p.m.)
` JUDGE MELVIN: Okay. Good afternoon. We're here
`for a hearing in IPR2018-01350. Will the parties please make
`their appearances?
` MR. ARGENTI: Good afternoon, Your Honor. Matt
`Argenti from Wilson Sonsini on behalf of Petitioner in the
`matter, Visa. With me at counsel table is Jamie Otto.
` JUDGE MELVIN: Thank you.
` MR. MATHEWS: Good afternoon, Your Honors. Chris
`Mathews on behalf of Patent Owner, USR. With me today are two
`of my partners. Lead counsel, James Glass and Tigran
`Guledjian. Also in attendance from USR, USR CEO Dr. Kenneth
`Weiss, and USR's president, Arthur Hagopian.
` JUDGE MELVIN: Thank you.
` MS. GREWAL: Good afternoon. Monica Grewal on
`behalf of Petitioner, Apple Inc.
` JUDGE MELVIN: Okay. So as you all know, you each
`have 45 minutes and you may reserve time for your rebuttal.
`As you -- as is inherent, we have remote judges, so please
`remember to refer to the written materials and to speak into
`the microphone so that we have a clear record.
` How much time would Petitioner like to reserve?
` MR. ARGENTI: I'd like to reserve 20 minutes.
` JUDGE MELVIN: Okay. And Patent Owner?
` MR. MATHEWS: Right now, I imagine I'd like to
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`reserve 10 minutes.
` JUDGE MELVIN: Okay. Okay. Well, I'll set up the
`timer so that your rebuttal will be when the light goes
`yellow, okay? I'll trust that you can manage your time.
` MR. ARGENTI: Before you hit start on the timer, one
`administrative matter.
` JUDGE MELVIN: Of course.
` MR. ARGENTI: Given that we have remote judges
`participating, my plan is to not use the screen to display our
`demonstratives. I'll be referring to them in hard copy form.
`I also have a hard copy I could distribute if it would be
`helpful, but we did file the demonstratives.
` JUDGE MELVIN: Yeah, absolutely. I -- we all have
`copies of the demonstratives. I have no need for them to be
`on the screen, so I'm happy to just use my copy here.
` MR. ARGENTI: Great, thanks.
` JUDGE MELVIN: So whenever you're ready, Mr.
`Argenti.
` MR. ARGENTI: Great. Thank you.
` Good afternoon, Your Honors. Turning to Slide 2 of
`our demonstratives, we see the instituted grounds in this
`proceeding. All of the challenged claims of the '539 Patent
`are obvious in view of the combination of three references,
`Brener, Desai, and Weiss. And as I will explain in a bit, the
`Desai reference is not necessary to find the claims obvious
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`under the proper interpretation of the claims.
` Turning to Slide 3, the challenged '539 Patent
`relates to a system used to selectively provide personal
`information to authorized parties. As we see in Figure 8 on
`Slide 3, the system can be used to allow a user to purchase
`goods from a merchant without divulging the user's name,
`identity, or sensitive information such as a credit card
`number to the merchant.
` This is accomplished through use of a secret code
`that corresponds to the user. The user provides the secret
`code to the merchant, the merchant passes that on to the
`secure registry system; at which point the secret code is then
`used to determine the customer's account number, name,
`address, other information, and work in conjunction with, for
`example, a bank or a shipping company.
` The '539 Patent also explains that the secure
`registry can be used to maintain the customer's anonymity when
`shipping the goods. The merchant doesn't need to know the
`customer's address, a third party shipper receives the address
`and enables completion of the transaction by shipping the
`goods.
` Now, turning to Slide 4, which is representative
`Claim 1 of the '539 Patent. All of the challenged claims
`specify that that secret code I just mentioned is a
`time-varying multicharacter code. Now, that's nothing new.
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`Patent Owner's own prior art patent disclosed the use of a
`time-varying multicharacter code to authenticate a user years
`before the '539 Patent.
` Now, on Slide 4, the color-coded limitations recite
`actions that the secure registry processor performs. In red,
`we see that the secure registry receives a transaction request
`that includes the code representing the user, and an
`indication of the provider requesting the transaction. And
`the provider in the claim corresponds to the merchant that we
`just saw in Figure 8, for example.
` In blue, the secure registry uses that code to
`determine the identity of the entity or the customer. In
`green, the secure registry determines compliance with any
`access restrictions for the provider for completing the
`transaction. I'm going to come back and talk about that
`limitation more in just a minute.
` And in brown, the secure registry allows or does not
`allow access to information necessary to complete the
`transaction, including account identifying information based
`on the determined compliance with the access restrictions for
`the provider. And then in the last limitation, the claim
`requires that the provider does not receive account
`identifying information, but that that information is given to
`a third party to enable or deny the transaction.
` Turning to Slide 5, Brener discloses almost exactly
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`what is recited in the claim that we just saw. Brener
`discloses a system for online purchases where a customer
`remains anonymous to a vendor. That's accomplished by
`assigning the customer a code called the customer object,
`that's provided to the vendor and passed to a secure provider
`who maintains a table correspond -- correlating the customer
`object with the customer's identifying information; account
`numbers, name, address.
` Using this table, the system in Brener can work with
`a bank to enable funding for the transaction, and with a
`shipper to enable shipment of the goods. All while
`maintaining anonymity at the vendor. Now, I'm going to flip
`back to Slide 4. I want to jump back to that slide and focus
`on the green limitation that begins, "To execute a restriction
`mechanism."
` You see there's an element there that says, "Based
`at least in part on the indication of the provider and the
`time-varying multicharacter code of the transaction request."
`We explained in the petition that that based on clause could
`be read to mean the access restrictions themselves are based
`on the indication of the provider and the time-varying
`multicharacter code, or it could be read more broadly to mean
`that the transaction is completed based on the indication of
`the provider and the time-varying multicharacter code.
` The specification describes access restrictions that
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`are based on the identities of the user and the provider. But
`it also describes embodiments where the transaction is
`completed without such access restrictions. So we think the
`broader interpretation is the right one. Under that
`interpretation, you don't need the Desai reference to find the
`claims obvious, Brener satisfies this limitation on its own.
` And I want to make it clear that we're not saying
`that the access restrictions for the provider don't require
`consideration of which party may access the information. What
`we point to in Brener is the role-based access restriction
`where the system gives a third party access to certain
`information, but it doesn't give the vendor access to that
`same information. So the system in Brener knows who the
`vendor is, applies the access restrictions to that vendor, but
`it does not apply to other parties in the transaction.
` JUDGE MELVIN: So on the claim constriction issue,
`it -- I suppose it's your position that “for the provider” is
`doing the work of tying the restriction to the provider and
`that it would be redundant to say “based on, at least, in part”
`-- “based at least in part on the indication of the provider,”
`is doing something else, right? It's about completing the
`transaction, not about the access restriction?
` MR. ARGENTI: I think the way that I would put it
`and the way that I think about it is that the -- yeah, I agree
`that the “for the provider” is doing the work in the access
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`restrictions and that indicates that the access restrictions
`are applied to the provider. And that the important thing in
`this limitation in green that we're talking about is that it
`considers both the provider and the user, and so the access
`restrictions are based not just on the provider, but on the
`user, if that clause applies to the access restrictions.
` And otherwise, it -- if it only requires that the
`transaction be completed based on the provider and the user,
`you also get that from Brener. Because Brener is considering
`who the provider is when determining that, oh, that's a
`vendor. I'm not going to give them the information, I'll give
`it to a third party. And at the same time, the transaction is
`completed based on who the customer is because that's how you
`figure out the account identifying information in the first
`place.
` Now, turning to Slide 6, on the other hand, if the
`access restrictions themselves must be based on both the
`identity of the provider and the user, you find that taught by
`the prior art when you consider Desai. Desai teaches an
`information exchange system where a user can selectively grant
`access to his data on an element-by-element and user-by-user
`basis. And that is almost essentially the same concept as the
`training that's described in the '539 Patent where the
`training says the user can go into the database and set up
`permissions for particular entities to access particular data.
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`That's exactly what Desai teaches.
` Turning to Slide 7, the only other aspect of the
`claims that Brener does not disclose is the use of a
`time-varying code to identify the user. In Brener, the
`customer object doesn't vary in time, but time-varying codes
`to identify users were well known before the '539 Patent.
`Weiss is one example. Weiss teaches periodically generating
`codes that are used to identify a user. Patent Owner does not
`dispute that Weiss discloses a time-varying multicharacter
`code, as recited in the claims.
` So what does Patent Owner dispute? The only
`limitation in Patent Owner's briefing identified as missing
`from the prior art is Limitation 1.6, which is the requirement
`that the account identifying information is not provided to
`the provider, but is provided to a third party to enable or
`deny the transaction. Brener teaches this is two ways. I'm
`going to jump to Slide 9 here.
` First, Brener discloses Limitation 1.6 in its
`anonymous shipping. As I explained, the vendor in Brener
`doesn't know the customer's name or address, but the secure
`provider sends that information to a third party shipping
`carrier to deliver the package. Now, Patent Owner has two
`arguments as to why this aspect of Brener doesn't meet
`Limitation 1.6. First, Patent Owner argues that the
`transaction in Brener has already been enabled by the time the
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`shipper gets involved. But it's not clear and Patent Owner
`hasn't explained why the shipper cannot also enable the
`transaction.
` JUDGE MELVIN: Well, what about the claim language
`enable or deny? How can the shipper deny the transaction?
` MR. ARGENTI: Well, first I would argue that enable
`or deny doesn't require enable and deny. It says enable or
`deny, so by enabling the transaction, the shipper meets the
`claim requirement. However, even under an alternative
`interpretation where it requires both enabling and denying,
`which again, is inconsistent with the claim limit’s face. It's
`-- it absolutely is possible for a shipper to refuse to
`provide shipment.
` And in fact, Patent Owner's own expert testified
`that a shipping carrier could refuse to provide shipping. And
`that's at Exhibit 1015, Page 67, Lines 17 through 18. And
`that just makes sense, I mean, intuitively. I don't think
`anybody would ever argue or understand that a shipping carrier
`is always bound to carry out a shipment if it doesn't have the
`necessary information. If it doesn't have payment, if it
`doesn't have the product. There are a lot of different ways
`that a shipping carrier could not carry out payment.
` Now, I want to get back to the -- Patent Owner's
`argument as to the transaction already having been enabled.
`Patent Owner's trying to portray what's going on in Brener as
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`two separate transactions, a purchase transaction and a
`shipping transaction. And that also, intuitively, doesn't
`make sense. Nobody thinks when you order something online
`from Amazon that there are two different transactions
`involved, one where you pay Amazon and one where they ship you
`the goods. You pay for the goods; you receive the goods.
`It's a single transaction.
` And that's the same thing as what's going on in
`Brener and in the '539 Patent. I'll also point out that the
`'539 Patent treats purchase and shipment as a single
`transaction. For example, that's Figures 10 and 11 in the
`corresponding discussion at Column 1328 through 1458.
` And finally, Patent Owner's argument is directly at
`odds with Dependent Claim 25, and I believe it also applies to
`Dependent Claim 4, which covers similar limitations. As we
`see on Slide 9, Dependent Claim 25 says that the transaction
`includes a service that includes delivery, and that delivery
`is affected by providing the address to the third party to
`accomplish delivery for the provider. That's exactly what
`we're pointing to in Brener, it's the same thing.
` And moreover, even if the shipping is interpreted to
`be a separate transaction from the purchase somehow, which we
`don't think makes any sense at all, I think the petition also
`establishes that Brener discloses that every limitation of
`Claim 1, we pointed to an aspect of the shipping portion of
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`Brener as satisfying the claim. So even if you want to
`completely bifurcate the shipping from the purchase and say
`that the shipping is its own transaction, we've shown that
`Brener discloses that.
` Now, I'll jump back to Slide 8. Brener also
`discloses Limitation 1.6 through its disclosure that a bank
`receives the customer's account identifying information to
`determine whether the customer has sufficient funds for the
`purchase. Patent Owner argues that the transaction request
`goes from the vendor to the bank, not from the vendor to the
`secure provider to the bank. We don't think that matters in
`the context of the claims, but Brener plainly teaches that the
`bank can receive the request from the secure provider, as we
`see in Slide 8 in the citation to Brener at 14, Lines 16
`through 22.
` Patent Owner also argues that bank in Brener only
`receives linking information from the secure provider, not
`account identifying information. But the linking information
`in Brener is information used to identify a customer's
`account, i.e., account identifying information. Moreover,
`Brener discloses that the linking table can be stored at
`either the secure provider or the bank. For example, at Page
`8, Line 9 through 20, as we've cited on Slide 8, when it's
`stored at the secured provider, the secure provider uses that
`table to provide the account information to the bank.
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` So Brener discloses that the transaction request can
`go to the secure provider, and it discloses that the secure
`provider sends account information to the bank, regardless of
`whether that's linking information or account information,
`like an account number, and nothing more is required by the
`claims.
` JUDGE MELVIN: Well, when the linking information is
`at the bank, how is that consistent with the claim term --
`where the secure provider has to map the code to the customer
`information?
` MR. ARGENTI: I agree that Brener discloses that the
`linking information can be stored at the bank, but that's not
`the aspect of Brener that we're relying on. We're relying on
`the storage of the linking information at the secure provider.
`And then, either that linking information is provided to the
`bank by the secure provider, or the secure provider uses the
`linking information to look up account information, like an
`account name or number, sends that to the bank.
` JUDGE MELVIN: But if the -- if you're relying on
`sending the linking information from the secure provider to
`the bank, that would have to be consistent with Brener's
`embodiment where the bank is the one doing the mapping, right?
` MR. ARGENTI: Well, but the secure provider has
`already done the mapping between the time-varying
`multicharacter code, which is the modified customer object, as
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`we've proposed.
` JUDGE MELVIN: That's true in certain embodiments of
`Brener.
` MR. ARGENTI: Right.
` JUDGE MELVIN: But in that case, why would the
`secure provider send the linking information to the bank?
` MR. ARGENTI: Because the bank uses that linking
`information to look up, for example, the account number. So I
`think Brener discloses that it can happen in a lot of
`different ways, including a way in which the secure provider
`uses the time-varying multi -- the customer object to look up
`the linking information, provide that linking information to
`the bank, which can then use it to correlate to a -- to an
`account number.
` JUDGE MELVIN: Isn't that the whole purpose of the
`linking information is to correlate the customer number to the
`account information?
` MR. ARGENTI: That is a purpose, yes. But as --
` JUDGE MELVIN: I just don't understand why in Brener
`both mappings would happen -- the mapping would happen at both
`locations? It seems like those are sort of two possibilities.
`Like, Brener clearly contemplates you could use the linking
`information at the secure provider or you could use it at the
`bank.
` But it seems to me like if you're talking about
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`satisfying Limitation 1.6 with the secure provider sending the
`linking information to the bank, then that would cause a
`problem for Limitation 1.3 because it would be, you know --
`you can't have it both -- it would be mixing Brener's
`embodiments. Maybe that's --
` MR. ARGENTI: Sure. And all I can do is fall back
`on the disclosure in Brener where it provides multiple options
`of ways to do it. And I'm not sure that Brener provides an
`explicit explanation as to why the particular combination that
`you're discussing --
` JUDGE MELVIN: It doesn't clearly delineate these
`two, sort of, approaches.
` MR. ARGENTI: I think that's true, which is an
`important point to make. I think Patent Owner consistently
`presents Brener as presenting these discrete embodiments, and
`Brener's really not written that way. It's written in a way
`that really presents a system and says that there are a lot of
`options in how to set the system up.
` JUDGE MELVIN: Okay.
` MR. ARGENTI: And I also want to get back to the
`point that the linking information is not solely what we're
`relying on as the account identifying information. We're also
`-- it's also clear --
` JUDGE MELVIN: When the mapping is performed at the
`secure registry, then it's the actual account identifying
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`information --
` MR. ARGENTI: Right.
` JUDGE MELVIN: -- that's provided to the bank?
` MR. ARGENTI: And that is provided to the bank.
` So I'll turn now to Slide 10 and discuss the
`combination of Brener and Weiss. As our expert, Dr. Tygar
`explained, a person of ordinary skill would have found it
`beneficial to incorporate a time-varying aspect into Brener's
`customer objects, resulting in a time-varying code that
`corresponds to the user's identity via the linking information
`stored in the secured database.
` Weiss explains the time-varying codes provide added
`security in the event that they fall into the wrong hands.
`You're not going to be able to use that code in perpetuity.
`You're not going to be able to reuse it. At some point it's
`going to expire and you're going to be able to tell that, hey,
`that's not the right user that's sending me that code. It
`makes perfect sense to incorporate that into Brener's customer
`object to make them more secure.
` Now, Patent Owner's rebuttal is to mischaracterize
`Brener's discloser and our ground of challenge. According to
`Patent Owner, the only combination we proposed was to modify
`Brener's private key authorization code, which, in their view,
`must be a static digital certificate and it just wouldn't work
`to modify. And none of that is accurate. As you see here on
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`Slide 10, our proposed combination was to incorporate a
`time-varying aspect into Brener's customer object. Patent
`Owner has no response to that proposal.
` Turning to Slide 11, Patent Owner, as I mentioned,
`focuses on our example of modifying Brener's private key
`authorization code to include a time-varying aspect. Now,
`according to Patent Owner, again, the private key
`authorization code can only be a digital certificate, but
`that's not true. Brener itself explains that the customer
`object can have both a public and private segment to a digital
`certificate or key; it's not limited to a digital certificate.
` And then, if you look also on Slide 11 at Patent
`Owner's expert testimony, he admitted -- actually, this is not
`an admission, this was in his original declaration submitted
`pre-institution. That the private key authorization code
`discussed in Brener is a digital signature. It was only after
`institution and after Dr. Tygar's testimony, that all of a
`sudden Dr. Jakobsson said, Oh, it's not a digital signature.
`That's not what I meant. It can only be a digital
`certificate. So it's clear that the proposed modification is
`not so limited as Patent Owner proposes. And their rebuttal
`theory can and should be rejected on that basis alone.
` Turning to Slide 12, however, even in the instances
`where the private key authorization code is a digital
`certificate, Patent Owner is wrong that you cannot incorporate
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`a time-varying aspect. The rebuttal argument that Patent
`Owner presents depends on an assumption that the digital
`certificate itself would be made time varying. That's not
`something that we ever proposed in the petition. It was not
`the basis of institution where the Board recognized that we
`were not proposing making the entire customer object time-
`varying.
` And our expert repeatedly explained during his
`deposition, before the Patent Owner response was submitted,
`that Patent Owner was mischaracterizing his testimony. He
`explained that, consistent with our proposal, you could append
`time-varying information to a digital signature or a digital
`certificate. Patent Owner knew that. They knew that that was
`the basis of our expert's testimony before the Patent Owner
`response was due, and they never responded.
` Instead, they chose to attack a straw man, this idea
`that we're proposing modifying a digital certificate to be
`time varying. To this day, Patent Owner has not identified
`any reason that it would be technically infeasible to modify a
`customer object to include a time-varying portion.
` Now, turning to Slide 13. I'll talk about the basis
`for combining the teachings of Brener and Desai.
` JUDGE MELVIN: I have a question about Weiss.
`You know, in the institution decision, we discussed that it
`seemed possible to regenerate public/private pairs, even to
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`incorporate it -- a time-varying aspect. I mean, was that
`incorrect and that really, we should look at the time-varying
`aspect as independent from the private/public key pair itself?
` MR. ARGENTI: I won't stand here and say that that's
`incorrect because I think that that has not been fully
`developed in the record. But I do think that the basis of our
`proposed combination, or at least our response to Patent
`Owner's straw man is that you don't have to change the key
`pairs, you don't have to change the certificate. All you do
`is add a time-varying aspect to the information that's on
`there.
` JUDGE MELVIN: Regeneration is only relevant if the
`time-varying aspect were integral to the key pair?
` MR. ARGENTI: Right. Yes.
` JUDGE MELVIN: All right.
` MR. ARGENTI: So on Slide 13, Dr. Tygar, our expert,
`explained that a person of ordinary skill in the art would
`have been motivated to move beyond Brener's role-based access
`restrictions and apply restricted access on a vendor-by-vendor
`basis, as selected by the user. And that this would have been
`a natural extension of the Brener system, and consistent with
`the benefits of security and anonymity common to both
`references.
` Turning to Slide 14, Patent Owner argues that the
`proposed combination would somehow require a vendor to share
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`its keys with the bank, but that's not what we proposed and
`it's not consistent with the references. As you see on Slide
`14, Dr. Jakobsson admitted that users in Desai don't need to
`share keys with each other to access information. They each
`have their own keys that are used to access the information
`that they, themselves, have been given access to in the system
`by the registered user. In our combination, the customer
`entity.
` And quickly flipping back to Slide 6, just another
`way of illustrating that point. If you look at Figure 2 on
`Slide 6, you see that there are three entities that receive
`information access, an online vendor, a business contact, and
`a telemarketer. And there's no sharing of keys described in
`Desai or necessary in Desai in order for each of those three
`entities to have their varying levels of information access.
`They each have their own keys in the system.
` Now, turning to Slide 15, the only -- that covers
`the disputed issues for the independent claims. The only
`other claims that Patent Owner addresses are Claims 3 and 24,
`which require that the time-varying multicharacter code is
`encrypted, transmitted to the secure registry system, and then
`decrypted at the secure registry using the users public key.
`Dr. Tygar explained that this is disclosed by Brener through
`its use of RSA technology for digital signatures.
` He explained that a person of ordinary skill in the
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`art would understand, digital signatures using RSA encrypt
`data at the sender, and decrypt it at recipient using the
`sender's public key. We thought that would not be a
`controversial point, but Patent Owner came back and argued
`that digital signatures and encryption are two entirely
`different things.
` So we showed that Dr. Tygar's testimony was
`absolutely accurate. We introduced the Schneier reference,
`which is a textbook from the mid-1990s, a well-known textbook
`on cryptography that says exactly what Dr. Tygar said. That
`when you're using RSA for digital signatures, you're
`encrypting on one end and decrypting on the other end. Patent
`Owner did not address or respond to Exhibit 1016 in its
`surreply.
` Finally, on Slide 16, I'll briefly address Patent
`Owner's arguments with respect to secondary considerations of
`non-obviousness. As we know, evidence of commercial success
`requires a nexus with the claimed invention. And beyond a
`ball of conclusory assertion regarding Apple and Visa's
`products somehow demonstrating commercial success of the
`invention, Patent Owner has not even tried to establish a
`connection between the two.
`