Square, Inc.
`v.
`4361423 Canada Inc.
`
`IPR2019-01625
`
`January 27, 2021
`
`1
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`4361423 Canada Inc. Exhibit 2007
`Square, Inc. v. 4361423 Canada Inc.
`IPR2019-01625
`Page 1
`
`
`v.
`4361423 Canada Inc.
`
`IPR2019-01625
`
`January 27, 2021
`
`1
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`4361423 Canada Inc. Exhibit 2007
`Square, Inc. v. 4361423 Canada Inc.
`IPR2019-01625
`Page 1
`
`
`
`The ‘875 Patent
`
`2
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1001
`IPR2019-01625 Exhibit 2007 Page 2
`
`
`
`IPR2019-01625
`
`U.S. Patent No. 8,286,875
`
`• Ground 1:
`• Claims 1-3 and 6 - Proctor in view of Vrotsos under 35 U.S.C. §103(a)
`• Ground 2:
`• Claims 12, 14-16, 18-26, and 28 - Proctor in view of Hart under 35 U.S.C.
`§103(a)
`• Ground 3:
`• Claims 1-3, 6, 12, 18, 21-22, 24, 26, and 28 - Eisner in view of Proctor under
`35 U.S.C. §103(a)
`• Ground 4:
`• Claims 14-16, 19-20, 23, and 25 - Eisner in view of Proctor and Hart under 35
`U.S.C. §103(a)
`
`3
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 3
`
`
`
`Ground 1
`
`Claims 1-3, 6 - Proctor in view of Vrotsos under
`35 U.S.C. §103(a)
`
`4
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 4
`
`
`
`Ground 1: Independent Claim 1 (claims 2-3, 6
`are dependent)
`
`Ex. 1001, claim 1
`
`5
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 5
`
`
`
`Ground 1: Claim Interpretation – “a controller”
`• The ordinary meaning of “controller” is a microprocessor or
`microcontroller (or similar) that controls the flow of operations.
`
`• A controller has to perform the claimed functions of “converting the
`captured card information into a signal having an analog audio format
`suitable for transmission to an analog hands-free jack of a mobile
`communications device” and “transmitting” the converted information.
`
`• To do that, controller would have to receive, read, validate and convert
`the information to a signal with an analog-audio format suitable for
`transmission to a hands-free jack.
`
`(POR, pp. 12-13 (citing ‘875 patent); Ex. 2004, ¶¶26-29
`
`6
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 6
`
`
`
`Ground 1: Claim Interpretation – “a controller”
`
`Ex. 1001, p. 11, 6:17-19
`
`7
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004 (Zatkovich Declaration), ¶24
`IPR2019-01625 Exhibit 2007 Page 7
`
`
`
`Ground 1: Claim Interpretation – “a controller”
`
`Ex. 1001, p. 12, 7:41-46
`
`8
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1001, p. 7 (Fig. 5)
`
`IPR2019-01625 Exhibit 2007 Page 8
`
`
`
`Ground 1: Claim Interpretation – “a controller”
`
`Ex. 1022, p. 6 (Tang Provisional Application)
`
`9
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 9
`
`
`
`Ground 1: Claim Interpretation –
`“a controller” performs the claimed functions
`
`Ex. 1001, p. 11, 6:15-19
`
`Ex. 1001, p. 12, 8:50-59
`
`10
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 10
`
`Ex. 1001, p. 12, 7:64-8:1
`
`
`
`Ground 1: Claim Interpretation – “a controller”
`
`11
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1002 (Notice of Allowance), p. 429
`IPR2019-01625 Exhibit 2007 Page 11
`
`
`
`Ground 1: Proctor does not have the claimed
`“controller” – admission by Petitioner
`
`Petition, p. 20
`
`Petition, p. 25
`
`Petition, p. 22
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`12
`
`IPR2019-01625 Exhibit 2007 Page 12
`
`
`
`Ground 1: Proctor’s terminal 36 has
`“essentially a modem”
`
`Ex. 1004, p. 4
`
`13
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 13
`
`
`
`Ground 1: Proctor does not have the claimed
`“controller”
`
`A modem is not a controller.
`
`Ex. 2004, ¶25
`
`14
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 14
`
`
`
`Ground 1: Proctor does not disclose the claimed
`“controller” performing the recited functions
`• Converting to analog “format
`suitable for transmission to
`an analog hands-free jack”
`
`• Transmitting to
`communications link
`
`15
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1001, p. 14
`
`IPR2019-01625 Exhibit 2007 Page 15
`
`
`
`Ground 1: Proctor does not disclose the claimed
`“controller” performing the recited functions
`• Emphasis and explanation in file history - Ex. 1002, p. 292
`(Prosecution History for ‘875 patent)
`
`16
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 16
`
`
`
`Ground 1: Proctor – Figure 1 embodiment
`can’t perform claimed functions
`
`17
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1004, p. 2
`(Figure 1 of Proctor –
`converter 30 highlighted)
`
`IPR2019-01625 Exhibit 2007 Page 17
`
`
`
`Ground 1: Proctor’s other “embodiments”
`
`Ex. 1004 (Proctor), p. 4
`
`18
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 18
`
`
`
`Ground 1: Petitioner’s primary “embodiment”
`of Proctor
`• Integrating convert 30 into phone 22
`
`• Petitioner calls it “the embodiment of Proctor primarily used in this
`Petition” – Petition, p. 18, footnote 3.
`
`• No Figure in Proctor discloses this “embodiment” - the only
`disclosure is this: “the telephone may incorporate the decoder
`circuitry”
`
`• There are implications.
`
`19
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 19
`
`
`
`Ground 1: Petitioner’s primary “embodiment”
`of Proctor
`
`Ex. 2003, ¶33; POR, pgs. 31, 48, 56-58
`
`20
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 20
`
`
`
`Ground 1: Vrotsos is a digital system
`
`21
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1006, p.15 (Fig. 10)
`
`IPR2019-01625 Exhibit 2007 Page 21
`
`
`
`Ground 1: Vrotsos is a digital system and does
`not have the claimed “controller”
`
`22
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1006, p. 22
`
`IPR2019-01625 Exhibit 2007 Page 22
`
`
`
`Ground 1: There is no motivation to combine
`Proctor and Vrotsos
`
`In re Nuvasive, Inc., 842 F.3d 1376, 1381-82 (Fed. Cir. 2016) (“‘[T]he factual inquiry whether to combine
`references must be thorough and searching,’ and ‘[t]he need for specificity pervades [our] authority’ on the
`PTAB's findings on motivation to combine.”) (Emphasis added)
`
`Plas-Pak Industries, Inc., 600 Fed. Appx. 755, 758-60 (Fed. Cir. 2015) (affirming conclusion of nonobviousness
`where proposed combination would change the “basic principles under which the [prior art device] was
`designed to operate”) (Emphasis added)
`
`Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281, 296 (Fed. Cir. 1985) (“Moreover, a reference
`must be considered for all it taught, disclosures that diverged and taught away from the invention at hand as
`well as disclosures that pointed towards and taught the invention at hand.”)
`
`TQ Delta, LLC v. CISCO Sys., Inc., 942 F.3d 1352, 1359 (Fed. Cir. 2019) (“[A] conclusory assertion with no
`explanation is inadequate to support a finding that there would have been a motivation to combine because
`this type of finding, without more, tracks the ex post reasoning KSR warned of and fails to identify any actual
`reason why a skilled artisan would have combined the elements in the manner claimed.”)
`
`23
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 23
`
`
`
`Ground 1: No motivation to combine Proctor
`with Vrotsos
`
`Ex. 1004, p. 2 (Fig. 1)
`
`Ex. 1006, p. 15 (Fig. 10)
`
`24
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 24
`
`
`
`Ground 1: No motivation to combine Proctor
`with Vrotsos
`
`25
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004, ¶143; POR, p. 56
`IPR2019-01625 Exhibit 2007 Page 25
`
`
`
`Ground 1: Proctor does not have the claimed
`“communication link” and functionality
`
`26
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Petition, p. 28 (Petitioner’s red annotations)
`IPR2019-01625 Exhibit 2007 Page 26
`
`
`
`Ground 1: Proctor does not have the claimed
`“communication link” and functionality
`
`Ex. 1004 (Proctor)
`
`27
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004, ¶54
`
`Ex. 2004, ¶55
`
`IPR2019-01625 Exhibit 2007 Page 27
`
`
`
`Ground 1: Proctor does
`not have the claimed
`“communication link” and
`functionality
`
`Petitioner’s arguments
`regarding incompatibility
`of RJ-11 and hands-free
`jacks
`IPR2019-01630 Petition, pp. 21-22; POR, p. 24
`
`28
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 28
`
`
`
`Ground 1: Claim 1- “automatically transmits the captured
`card information to the remote transaction server”
`
`29
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1004 (Proctor), p. 4
`
`IPR2019-01625 Exhibit 2007 Page 29
`
`
`
`Ground 2
`
`Claims 12, 14-16, 18-26, and 28 - Proctor in view of
`Hart under 35 U.S.C. §103(a)
`
`30
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 30
`
`
`
`Independent Claims Challenged in Ground 2
`
`• 12
`
`• 18
`
`• 22
`
`• 24
`
`• 26
`
`• 28
`
`31
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 31
`
`
`
`Ground 2: Hart is a digital system
`
`Ex. 1018, p. 19 (7:25-32)
`
`32
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1018, p. 19 (8:20-34)
`
`IPR2019-01625 Exhibit 2007 Page 32
`
`
`
`Ground 2:“further processing”
`
`Ex. 1001, p.13, 10:43-44, 10:53-57
`(POR, p. 40)
`
`33
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2001, pp. 52-53 (POR, p. 40)
`Square’s Petition in the Morley IPR
`
`IPR2019-01625 Exhibit 2007 Page 33
`
`
`
`Ground 2: Proctor does not do “further
`processing” in the phone
`
`34
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004, ¶85
`
`IPR2019-01625 Exhibit 2007 Page 34
`
`
`
`Ground 2: Hart does not disclose “further
`processing” in the phone
`
`Ex. 2004, ¶90
`
`35
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 35
`
`
`
`Ground 2: No motivation to combine Proctor
`and Hart
`
`• Hart = Digital
`• Proctor = Analog
`
`36
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 36
`
`
`
`Ground 3
`
`Claims 1-3, 6, 12, 18, 21-22, 24, 26, and 28 - Eisner in
`view of Proctor under 35 U.S.C. §103(a)
`
`37
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 37
`
`
`
`Ground 3: Eisner + Proctor
`(claims 1-3, 6, 12, 18, 21, 22, 24, 26, and 28)
`• All challenged independent claims require that the card-reader device
`transmit a signal in analog-audio format suitable to the hands-free
`jack of a mobile communication device
`• See, e.g., claim 1: “a communication link for coupling said input
`device to an analog hands-free jack of a mobile communication
`device for the transmission of said analog-audio-format signals there
`between”
`• Similarly, claim 18: “read head including circuitry for converting said
`analog signal to an audio format suitable for transmission to a hands-
`free jack of a mobile communication device” and “an output jack
`adapted to be inserted into a jack associated with said mobile
`communication device for providing the analog signal”
`
`38
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 38
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`• Petitioner on Eisner:
`“Eisner discloses a controller (microcontroller tone generator,
`computer 34) for converting the captured card information into an
`encrypted audio signal having an analog audio format suitable for
`transmission to an analog jack (converting to analog tones for output
`on an RJ-11 jack to a telephone network).”
`• See Petition, p. 63 (emphasis added by PO).
`• Petitioner on Proctor:
`• “To the extent Eisner does not disclose a mobile communication device or a hands-
`free jack of a mobile communication device, Proctor, which teaches using a card
`reader with mobile communication networks, discloses converting captured card
`information into a signal having an analog audio format suitable for transmission
`(converting to a modulated tonal pattern) to an analog hands-free jack (connector
`26) of a mobile communication device (phone 22).”
`• See Petition, p. 64
`
`39
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 39
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`• Problems with Petitioner’s Argument:
`• Initially, Proctor does not meet any of these claim limitations regarding
`converting to or producing analog audio signals in a format suitable for
`transmission to a hands-free jack – that is the reason for Ground 3 where
`Eisner is now the primary reference
`• Proctor’s converter 36 is not optional
`• Petitioner’s “primary embodiment” of Proctor (where converter 36 gets
`integrated into the cell phone)
`• Eisner’s RJ-11 versus a hands-free jack input
`
`40
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 40
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`
`Proctor’s converter (POR, p. 44)
`
`“Proctor does not disclose that the card-reader terminal
`connects to the converter through a hands-free (or “headset”)
`jack.” (POSR, p. 21)
`
`41
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 41
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`Eisner’s RJ-11 output v. 3.5 mm jack (POR, p. 44)
`
`• “Eisner does not disclose, and Petitioner does not explain, how a signal
`conditioned for a telephone line would necessarily be compatible with a
`hands-free audio jack or the input of Proctor’s phone 22.” (POR, p. 45)
`
`• Contrast Petitioner’s previous arguments on RJ-11 versus 3.5mm jacks (POR, pp.
`23-25, 44; IPR2019-01630 Petition, pp. 21-22)
`
`42
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 42
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`
`43
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1008, p. 3 (Fig. 2)
`
`IPR2019-01625 Exhibit 2007 Page 43
`
`
`
`Ground 3: Eisner +
`Proctor (transmitting
`signal in analog-audio
`form to hands-free jack
`of mobile device)
`
`Petitioner’s arguments
`regarding incompatibility
`of RJ-11 and hands-free
`jacks
`
`IPR2019-01630 Petition, p. 21-22;
`POR, p. 24
`
`44
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 44
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in
`analog-audio form to hands-free jack of mobile device)
`
`• Petitioner’s alternative footnote argument: Eisner’s DTMF signal
`might be sent for processing by Proctor’s converter 30 before sending
`the signal to the mobile phone. (Petition, p. 60 n. 9; POR, p. 45)
`
`• But Proctor’s converter 30 accepts modem signals and then produces
`(not receives) converted (e.g., DTMF) signals. (Ex. 2004, ¶102; POR, p. 45; Ex.
`1004, pp. 3-4 (¶¶5, 16, 17)
`
`45
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 45
`
`
`
`Ground 3: Here is how Proctor is designed and
`operates
`
`46
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004, ¶104
`
`IPR2019-01625 Exhibit 2007 Page 46
`
`
`
`Ground 3: Eisner + Proctor (transmitting signal in analog-
`audio form to hands-free jack of mobile device)
`Petitioner’s alternative footnote argument: Eisner’s DTMF signal might be sent for
`processing by Proctor’s converter 30 before sending the signal to the mobile phone.
`(Petition, p. 60 n. 9; POR, p. 45)
`But Proctor’s converter 30 accepts modem signals and then produces (not receives)
`converted (e.g., DTMF) signals. (Ex, 2004, ¶102; POR, p. 45; Ex. 1004, pp. 3-4 (¶¶5, 16, 17)
`
`47
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1004, p. 3 (POR, pp. 45-46)
`
`IPR2019-01625 Exhibit 2007 Page 47
`
`
`
`Ground 3: Eisner + Proctor (claim 1 and dependents)
`(mobile device automatically transmitting card information)
`
`Claim 1 requires “said mobile communication device automatically
`transmits the captured card information to the remote transaction
`server and receives transaction validation information from said
`remote transaction server.”
`
`48
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 48
`
`
`
`Ground 3: Eisner + Proctor (claim 1 and dependents)
`(mobile device automatically transmitting card information)
`No automatic transmission in Eisner/Proctor:
`
`• Ability of Eisner’s DTMF signals to pass along mobile network unimpeded not
`same as claim automatic transmission by mobile device. (POR, p. 49)
`
`• PBX not a mobile communication device. (POR, p. 50)
`
`• Proctor (as discussed) contemplates manual dialing (POR, p. 50)
`
`49
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 49
`
`
`
`Ground 3: Eisner + Proctor (“further processing” by
`mobile device)
`• Claim 24 recites “providing said converted signal indicative of the
`magnetically recorded information stored on a magnetic stripe to said
`mobile communication device for further processing by circuitry
`contained in said mobile communication device ….”
`
`• Not disclosed in Eisner or in Proctor as previously discussed
`
`• Finally, there is no motivation to combine Eisner and Proctor
`
`50
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01625 Exhibit 2007 Page 50
`
`
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