United States Patent and Trademark Office
`______________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________________________
`SQUARE, INC.
`Petitioner
`v.
`4361423 CANADA INC.
`Patent Owner
`IPR2019-01649 – U.S. Patent No. 9,016,566
`IPR2019-01650 – U.S. Patent No. 9,311,6371
`
`January 28, 2021
`
`1The board has consolidated these cases for the purposes of oral argument
`
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`Square Exhibit 1028
`Square v. 4361423 Canada Inc. IPR2019-01649
`Page 1 of 56
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`
`______________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________________________
`SQUARE, INC.
`Petitioner
`v.
`4361423 CANADA INC.
`Patent Owner
`IPR2019-01649 – U.S. Patent No. 9,016,566
`IPR2019-01650 – U.S. Patent No. 9,311,6371
`
`January 28, 2021
`
`1The board has consolidated these cases for the purposes of oral argument
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`Square Exhibit 1028
`Square v. 4361423 Canada Inc. IPR2019-01649
`Page 1 of 56
`
`
`
`U.S. Patent # 9,016,566 and 9,311,637
`
`’566 and ’637 Patents (Ex. 1001) at FIGS. 1 & 2
`
`2
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`Page 2 of 56
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`Challenged Claims
`
`1. A portable smart card reader device for reading
`a smart card having recorded information stored
`on an integrated circuit incorporated into the
`card, the device comprising:
`a sensor for reading said recorded information stored
`on said integrated circuit incorporated into said
`card and for producing an analog signal
`indicative of the recorded information, said
`sensor including circuitry for converting said
`analog signal to a format / an encrypted signal
`suitable for transmission to a 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 converted / encrypted
`signal indicative of the recorded information to
`said mobile communication device for
`transmission to a transaction server for further
`processing.
`’566 and ’637 Patents (Ex. 1001) at cls. 1-4, further processing requirement only in claim 3
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`The card reader device from claim 1, in
`which the smart card is selected from a
`group consisting of a chip card, EMV card,
`proximity detector or NFC card, contactless
`card, or any combination thereof.
`3. A method for reading a smart card …
`… said portable card reader device produces an
`encrypted analog / analog signal…
`providing said encrypted analog / analog
`signal… to said mobile communication
`device for further processing by circuitry
`contained in said mobile communication
`device…
`The card reader device from claim 3, in
`which the smart card is selected from a
`group consisting of a chip card, EMV card,
`proximity detector or NFC card, contactless
`card, or any combination thereof.
`
`3
`
`2.
`
`4.
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`Overview of the Grounds
`
`#
`1
`
`2
`
`3
`
`4
`
`Grounds (identical for ’566 and ’637)
`Obvious from U.S. Patent Pub. # 2002/0091633
`(“Proctor”) in view of U.S. Patent Pub. #
`2005/0236480 (“Vrotsos”)
`Obvious from U.S. Patent Pub. # 2007/0067833
`(“Colnot”) in view of Vrotsos
`Obvious from U.S. Patent # 5,838,773 (“Eisner”) in
`view of Vrotsos and Proctor
`Obvious from Proctor in view of Vrotsos and U.S.
`Patent # 7,810,729 (“Morley”)
`
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`* Provisional support is
`relevant only for Ground 4
`
`4
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`Proctor + Vrotsos (Ground 1)
`
`Proctor
`
`Vrotsos
`
`+
`
`Petitions (IPR2019-01649 Paper 2 at 11, 20, 22; IPR2019-01650 Paper 2 at 10, 19, 20)
`
`5
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`Proctor + Vrotsos + Morley (Ground 4)
`
`Morley
`
`Ground 1
`Proctor + Vrotsos
`
`+
`
`Petitions (IPR2019-01649 Paper 2 at 80; IPR2019-01650 Paper 2 at 75)
`
`6
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`Grounds 1 & 4 – Disputes*
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`Disputed Issues
`
`Smart card (slides 9-10)
`Recorded information (slides 11, 28)
`Smart card sensor (slides 12-13)
`Producing & converting (slides 25-26)
`Encrypt[ion] (‘637 patent) (slides 16, 27)
`Mobile device’s further processing (slides 20-21, 29)
`Motivation to combine (slide 22)
`
`Disputed
`prior art
`disclosure
`X
`X
`X
`
`X
`X
`X
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`Disputed
`prov. support
`(Gd. 4)
`
`X
`
`X
`X
`X
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`7
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`Grounds 1 & 4
`Proctor + Vrotsos disclose preamble
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
`Proctor
`
`Vrotsos
`
`Petitions (IPR2019-01649 Paper 2 at 18-19, 21-22; IPR2019-01650 Paper 2 at 16-20)
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`8
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`Ground 1 & 4
`Proctor and Vrotsos each discloses smart card
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
`*
`
` Proctor: “[T]he credit card may include data encoded by . . . a memory chip that
`records information beyond identifying the card, including balance and available
`credit.”
`
`Proctor (Ex. 1007) at ¶10
`
` Vrotsos: “A card 51 having a magnetic stripe 52
`and/or smartchip 53 may be inserted into the slot 22.”
`
`See also Petitions (IPR2019-01649 Paper 2 at 12, 19-21; IPR2019-01650 Paper 2 at 10, 18-19)
`
`9
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`Vrotsos (Ex. 1009) at ¶41, FIG. 1E
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`Grounds 1 & 4
`PO improperly limits smart card to EMV and NFC cards
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
`*
`
`–
`
` PO’s interpretation is inconsistent with claims 2 & 4
`“2 [4]. The card reader device from claim 1 [3], in which the smart card is selected from a group
`consisting of a chip card, EMV card, proximity detector or NFC card, contactless card, or any
`combination thereof.”
`
`’566 and ’637 Patents (Ex. 1001) at cls. 2, 4
`
` PO’s interpretation is inconsistent with the POSITA’s understanding
`“In 2009, [Proctor’s credit card] was commonly referred to as a ‘chip card’ or a ‘smart card’
`because it has a digital memory chip that stores data that can be read from the card.”
`First McNair Decl. (Ex. 1003) at ¶53
`
`–
`
`See also Pet. Replies (IPR2019-01649 Paper 32 at 4-6; IPR2019-01650 Paper 31 at 2-4)
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`10
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`Grounds 1 & 4
`Proctor discloses recorded information
`
`*
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
` Proctor stores recorded information
`“[T]he credit card may include data encoded by . . . a memory chip that records information
`–
`beyond identifying the card, including balance and available credit.”
`
`Proctor (Ex. 1007) at ¶10
`
` POSITA knew credit cards stored recorded information
`“The ‘information beyond identifying the card, including balance and available credit’ [in Proctor]
`–
`is the recorded information.”
`First McNair Decl. (Ex. 1003) at ¶77
`
`–
`
`“There is also no dispute that Proctor’s credit card would include an EMV card and stores card-
`identifying information including “the payment card number, the cardholder’s name, expiration
`date, and other security information.”
`Pet. Replies (IPR2019-01649 Paper 32 at 5; IPR2019-01650 Paper 31 at 3)
`
`See also Petitions (IPR2019-01649 Paper 2 at 19-20; IPR2019-01650 Paper 2 at 18);
`Zatkovich Dep. Tr. (Ex. 1021) at 66:22-68:5
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`11
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`Grounds 1 & 4
`Proctor discloses sensor
`
`*
`
`’566/’637 claim 1: “… a sensor for reading said recorded information stored on said integrated circuit
`incorporated into said card…”
`
`Petitions (IPR2019-01649 Paper 2 at 24; IPR2019-01650 Paper 2 at 22)
`
`12
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`Grounds 1 & 4
`Vrotsos discloses sensor
`
`*
`
`’566/’637 claim 1: “… a sensor for reading said recorded information stored on said integrated circuit
`incorporated into said card…”
`
` “A smartcard read/write head may be positioned within a
`surface of the deeper channel portion 55 of the slot 22 so
`that information may be read from or written to the
`smartchip 53 when the card is positioned within the deeper
`channel portion 55.”
`Vrotsos (Ex. 1009) at ¶41
` “The smartcard read/write head in Vrotsos is the sensor for
`reading from a smart card . . . Vrotsos explicitly states the
`smartcard read/write head is for reading information from a
`smart card, not a magnetic card.”
`Second McNair Decl. (IPR2019-01649 Ex. 1022 at ¶17; IPR2019-01650 Ex. 1022 at ¶19)
`
`See also Petitions (IPR2019-01649 Paper 2 at 25; IPR2019-01650 Paper 2 at 23);
`Pet. Replies (IPR2019-01649 Paper 32 at 6; IPR2019-01650 Paper 31 at 4-5)
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`13
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`Grounds 1 & 4
`Proctor produces analog signal
`
`’566/’637 claim 1: “… a sensor … for producing an analog signal indicative of the recorded
`information…”
`
` “The terminal 36… converts the scanned…
`data to be sent from a digital form to a
`modulated tonal pattern transmissible via
`conventional telephone lines.”
`
` “The message generated in the terminal 36 is
`modulated to an audible stream of tones,
`which are transmitted to the converter 30.”
`
`Proctor (Ex. 1007) at ¶11, 16;
`See also Petitions (IPR2019-01649 Paper 2 at 27; IPR2019-01650 Paper 2 at 24-25)
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`14
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`Grounds 1 & 4 (’566 patent)
`Proctor converts to format suitable
`
`’566 claim 1: “… said sensor including circuitry for converting said analog signal to a format suitable for
`transmission to a jack of a mobile communication device…”
`
` “The converter converts this signal into a data
`stream in encoded format that is readily
`transmitted via digital cellular networks.”
`
` “The phone 22 includes… a supplementary
`connector 26 of the type used for… hands-free
`headsets.”
`
`Proctor (Ex. 1007) at ¶8, 16;
`See also Petition (IPR2019-01649 Paper 2 at 27-29)
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`15
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`Grounds 1 & 4 (’637 patent)
`Vrotsos discloses encrypt[ion]
`
`*
`
`’637 claim 1: “… said sensor including circuitry for converting said analog signal to an encrypted signal
`suitable for transmission to a jack of a mobile communication device …”
`’637 claim 3: “… produces an encrypted analog signal indicative of the recorded information stored on
`said integrated circuit…”
` Vrotsos encrypt[s] card information
`“The attachment 21 may encrypt the transaction data captured by the reader 23.”
`–
`Vrotsos (Ex. 1009) at ¶52
`
` POSITA knew to encrypt[] smart card information
`“[E]ncrypting smart card data in a smart card reader before sending that data to a mobile phone
`–
`was known, as described in Vrotsos.”
`First McNair Decl. (Ex. 1003) at ¶105
`
`–
`
`“Mr. Zatkovich[] admi[tted] that the POSITA would know to (1) encrypt data read from a smart
`card, (2) read encrypted data from the smart card, and (3) convert from an analog signal to an
`encrypted analog signal.”
`Pet. Reply (IPR2019-01650 Paper 31) at 6
`
`See also Petition (IPR2019-01650 Paper 2 at 27); Zatkovich Dep. Tr. (Ex. 1021) at 154:10-155:22
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`16
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`Ground 1
`Proctor and Vrotsos each discloses output jack
`
`’566 /’637 claim 1: “… an output jack adapted to be inserted into a jack associated with said mobile
`communication device for providing the converted signal indicative of the recorded information to said
`mobile communication device…”
`
`Proctor
`
`Vrotsos
`
`Petitions (IPR2019-01649 Paper 2 at 30-33; IPR2019-01650 Paper 2 at 28-31)
`
`17
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`Ground 4
`Morley discloses output jack
`
`’566 /’637 claim 1: “… an output jack adapted to be inserted into a jack associated with said mobile
`communication device for providing the converted signal indicative of the recorded information to said
`mobile communication device…”
`
`Petitions (IPR2019-01649 Paper 2 at 80; IPR2019-01650 Paper 2 at 75)
`
`18
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`Grounds 1 & 4
`Proctor discloses server’s further processing
`
`’566 /’637 claim 1: “… for transmission to a transaction server for further processing.”
`
`
`
`“The facility [20] identifies the stream as an encoded stream in
`the transmissible format, and if necessary, routes the call to the
`converter 52. The converter 52 converts the encoded stream
`into the modulated audible tone signal, which is demodulated by
`a modem in the computer 56, and processed.”
`
`Proctor (Ex. 1007) at ¶17;
`Petitions (IPR2019-01649 Paper 2 at 35-36; IPR2019-01650 Paper 2 at 32-33)
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`19
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`Grounds 1 & 4
`Proctor and Vrotsos’s phone performs further processing
`
`*
`
`’566/’637 claim 3: “… providing said [encrypted] analog signal … to said mobile communication device
`for further processing by circuitry contained in said mobile communication device …”
`
` Proctor and Vrotsos disclose at least four ways of performing further
`processing in the phone:
`
`1.
`
`2.
`
`“The phone includes circuitry that
`encodes vocal communications digitally,
`in a highly compressed format.”
`Proctor (Ex. 1007) at ¶8
`“[A]n A/D converter to convert audio
`input received at the microphone 8 to
`digital data.”
`
`Vrotsos (Ex. 1009) at ¶74
`
`3.
`
`4.
`
`“[A] filter to improve the quality
`of the digital data, and the like.”
`
`Vrotsos (Ex. 1009) at ¶74
`
`“[P]ackage the encrypted
`transaction data.”
`Vrotsos (Ex. 1009) at ¶53
`
`See also Petitions (IPR2019-01649 Paper 2 at 38-39; IPR2019-01650 Paper 2 at 35-36)
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`20
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`
`Grounds 1 & 4
`PO improperly limits mobile device’s further processing
`
`*
`
`’566/’637 claim 3: “… providing said [encrypted] analog signal … to said mobile communication device
`for further processing by circuitry contained in said mobile communication device …”
`
` This Board stated that further processing involves “sending an analog signal
`to the jack of a cell phone with the intent of further transmission to a server.”
`Institution Decisions (IPR2019-01649 Paper 11 at 18-19; IPR2019-01650 Paper 11 at 18-19)
`
` PO now interprets further processing to “require[] the recovery of the
`information from the audio signal into digital information” and to exclude
`“relaying of information from the mobile phone’s jack to the cellular network.”
`PO Responses (IPR2019-01649 Paper 23 at 26; IPR2019-01650 Paper 23 at 27)
`
`See also Pet. Replies (IPR2019-01649 Paper 32 at 9-11, 21; IPR2019-01650 Paper 31 at 8-10, 21)
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`21
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`Grounds 1 & 4
`Motivation to combine
`
`*
`
` Reasons to combine the prior art are clear
`Petitions (IPR2019-01649 Paper 2 at 22-23, 25-27, 34, 39-40, 80-82; IPR2019-01650 Paper 2
`at 20-21, 23-24, 27-28, 31-32, 36, 75-77)
` Board was “sufficiently persuaded that a [POSITA] would have had
`reason to combine the teachings of Proctor and Vrotsos.”
`Institution Decisions (IPR2019-01649 Paper 11 at 13; IPR2019-01650 Paper 11 at 13-14)
` PO’s arguments are faulty because they:
`– Rely on bodily incorporation
`– Reverse the order of the combination
`Pet. Replies (IPR2019-01649 Paper 32 at 24-25; IPR2019-01650 Paper 31 at 24-26)
`
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`22
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`Ground 4 - Timeline
`
` Assessing priority is necessary for Ground 4, but not Grounds 1-3
`
`Feb. 10, 2009
`’459 (Tang) Prov. filed
`
`June 10, 2009
`Morley filed
`
`Feb. 10, 2010
`’367 (Tang) PCT filed
`
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`23
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`Ground 4 – Disputes*
`
`Disputed Issues
`Prov. support for producing & converting steps (slides 25-26)
`Prov. support for encrypt[ing] (slide 27)
`Prov. support for recorded information (slide 28)
`Prov. support for further processing in mobile device (slide 29)
`
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`24
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`Ground 4 – No provisional support
`Producing & converting steps (claim 1)
`
`*
`
`’566/’637 claim 1: “… a sensor … for producing an analog signal indicative of the recorded information,
`said sensor including circuitry for converting said analog signal to [a format/an encrypted signal] suitable
`for transmission to a jack of a mobile communication device …”
`
`’459 Prov. (Ex. 1005) at [300];
`See also Pet. Replies (IPR2019-01649 Paper 32 at 18-19; IPR2019-01650 Paper 31 at 18)
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`25
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`Page 25 of 56
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`Ground 4 – No provisional support
`Producing & converting steps (claim 1)
`
`*
`
`’566/’637 claim 1: “… a sensor … for producing an analog signal indicative of the recorded information,
`said sensor including circuitry for converting said analog signal to [a format/an encrypted signal] suitable
`for transmission to a jack of a mobile communication device …”
`
`’459 Prov. (Ex. 1005) at [500];
`See also Pet. Replies (IPR2019-01649 Paper 32 at 18-19; IPR2019-01650 Paper 31 at 17-18)
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`26
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`Page 26 of 56
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`
`Ground 4 (’637 patent) – No provisional support
`Encrypt[ing] smart card information (all claims)
`’637 claim 1: “… said sensor including circuitry for converting said analog signal to an encrypted signal
`suitable for transmission to a jack of a mobile communication device …”
`’637 claim 3: “… produces an encrypted analog signal indicative of the recorded information stored on
`said integrated circuit…”
`
`*
`
`’459 Prov. (Ex. 1005) at [500];
`See also Pet. Reply (IPR2019-01650 Paper 31) at 19-20
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`27
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`
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`Ground 4 – No provisional support
`Recorded information (all claims)
`
`*
`
`’566/’637 claims 1 & 3: “… a smart card having recorded information stored on an integrated circuit
`incorporated into the card …”
`
`’459 Prov. (Ex. 1005) at [200];
`See also Pet. Replies (IPR2019-01649 Paper 32 at 24; IPR2019-01650 Paper 31 at 24)
`
`28
`
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`Page 28 of 56
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`
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`Grounds 1 & 4 – No provisional support
`Mobile device’s further processing (claim 3)
`
`*
`
`’566/’637 claim 3: “… providing said [encrypted] analog signal … to said mobile communication device
`for further processing by circuitry contained in said mobile communication device …”
`
`’459 Prov. (Ex. 1005) at [500];
`See also Pet. Replies (IPR2019-01649 Paper 32 at 21-22; IPR2019-01650 Paper 31 at 21-22)
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`29
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`Page 29 of 56
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`
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`Ground 2
`
`#
`1
`
`2
`
`3
`
`4
`
`Grounds (identical for ’566 and ’637)
`Obvious from U.S. Patent Pub. # 2002/0091633
`(“Proctor”) in view of U.S. Patent Pub. #
`2005/0236480 (“Vrotsos”)
`Obvious from U.S. Patent Pub. # 2007/0067833
`(“Colnot”) in view of Vrotsos
`Obvious from U.S. Patent # 5,838,773 (“Eisner”) in
`view of Vrotsos and Proctor
`Obvious from Proctor in view of Vrotsos and U.S.
`Patent # 7,810,729 (“Morley”)
`
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`30
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`
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`Colnot + Vrotsos (Ground 2)
`Colnot
`
`Vrotsos
`
`+
`
`Disputed Issues*
`Smart card (slides 34-35)
`Whether Colnot is enabling (slide 43)
`Motivation to combine (slide 44)
`
`Petitions (IPR2019-01649 Paper 2 at 13, 22, 46; IPR2019-01650 Paper 2 at 12, 20, 41)
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`31
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`
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`Ground 2
`Colnot discloses preamble
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
` “[T]he circuitry… is housed
`within a convenient and mobile
`key jack device that can be
`worn around a user's neck or
`may be placed on a key ring for
`convenience.”
`
`Colnot (Ex. 1011) at ¶57;
`Petitions (IPR2019-01649 Paper 2 at 41; IPR2019-01650 Paper 2 at 39)
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`32
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`Page 32 of 56
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`Ground 2
`Colnot + Vrotsos disclose preamble
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
` “[T]he attachment 21 may have a
`combined magnetic stripe reader
`and smartcard reader. A
`card 51 having a magnetic
`stripe 52 and/or smartchip 53 may
`be inserted into the slot 22.”
`
`Vrotsos (Ex. 1009) at ¶41, FIG. 1E;
`Petitions (IPR2019-01649 Paper 2 at 45-46; IPR2019-01650 Paper 2 at 41-42)
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`33
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`Page 33 of 56
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`
`
`*
`Ground 2
`Colnot and Vrotsos each discloses smart card
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
` Colnot: “Integrated circuit cards, commonly referred to as smart
`cards, are widely used in stores to secure electronic payments.”
`Colnot (Ex. 1011) at ¶5;
`
` Vrotsos: “A card 51 having a magnetic stripe 52 and/or
`smartchip 53 may be inserted into the slot 22.”
`
`Vrotsos (Ex. 1009) at ¶41, FIG. 1E
`
`See also Petitions (IPR2019-01649 Paper 2 at 41-46; IPR2019-01650 Paper 2 at 37-42)
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`34
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`Page 34 of 56
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`
`Ground 2
`PO improperly limits smart card to be removable
`
`*
`
`’566/’637 claims 1 & 3: “… a smart card having recorded information stored on an integrated circuit
`incorporated into the card …”
`
` “In rebutting Colnot, PO analyzes an embodiment not relied upon by Petitioner to
`argue that Colnot does not meet the claimed smart card because the smart card must
`be ‘removable.’ POR, 30-32. PO and its expert do not (and cannot) cite to any
`intrinsic record for support.”
`
`Pet. Reply (IPR2019-01650 Paper 31 at 11); see also Pet. Reply (IPR2019-01649 Paper 32 at 12),
`Patent Owner Responses (IPR2019-01649 Paper 23 at 31; IPR2019-01650 Paper 23 at 32)
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
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`35
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`Page 35 of 56
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`
`
`Ground 2
`Colnot discloses sensor
`
`’566/’637 claim 1: “… a sensor for reading said recorded information stored on said integrated circuit
`incorporated into said card…”
`
`Petitions (IPR2019-01649 Paper 2 at 48-49; IPR2019-01650 Paper 2 at 44-45)
`
`36
`
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`Page 36 of 56
`
`
`
`Ground 2
`Colnot produces analog signal
`
`’566/’637 claim 1: “… a sensor … for producing an analog signal indicative of the recorded
`information…”
`
` “Modem 406 and
`oscillator 405 generate
`the signal in the form of
`sine waves.”
`
`Colnot (Ex. 1011) at ¶55;
`Petitions (IPR2019-01649 Paper 2 at 50; IPR2019-01650 Paper 2 at 45)
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`37
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`Page 37 of 56
`
`
`
`Ground 2 (’566 patent)
`Colnot converts to format suitable
`
`’566 claim 1: “… said sensor including circuitry for converting said analog signal to a format suitable
`for transmission to a jack of a mobile communication device…”
`
`Petition (IPR2019-01649 Paper 2 at 51-53)
`
`38
`
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`Page 38 of 56
`
`
`
`Grounds 2 (’637 patent)
`Colnot and Vrotsos disclose encrypt[ion]
`
`’637 claim 1: “… said sensor including circuitry for converting said analog signal to an encrypted signal
`suitable for transmission to a jack of a mobile communication device …”
`’637 claim 3: “… produces an encrypted analog signal indicative of the recorded information stored on
`said integrated circuit…”
`
` Colnot: “Data payload 101 includes ID number 102, typically in an encrypted
`state.”
`Colnot (Ex. 1011) at ¶38
`
` Vrotsos: “The attachment 21 may encrypt the transaction data captured by
`the reader 23.”
`Vrotsos (Ex. 1009) at ¶52
`
`See also Petition (IPR2019-01650 Paper 2) at 27, 45-46
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`
`39
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`Page 39 of 56
`
`
`
`Ground 2
`Colnot discloses output jack
`
`’566 /’637 claim 1: “… an output jack adapted to be inserted into a jack associated with said mobile
`communication device for providing the converted signal indicative of the recorded information to said
`mobile communication device…”
`
` “A tip/ring interface
`for plugging into a
`microphone jack…”
`
`Colnot (Ex. 1011) at ¶55;
`Petitions (IPR2019-01649 Paper 2 at 42; IPR2019-01650 Paper 2 at 38)
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`
`40
`
`Page 40 of 56
`
`
`
`Ground 2
`Colnot discloses server’s further processing
`
`’566 /’637 claim 1: “… for transmission to a transaction server for further processing.”
`
` “[A]n authentication server adapted to authenticate a user 203 for access to a secure
`resource…. Server 201 generates a hash code of the user password stored at the
`server using the session key.”
`
`Colnot (Ex. 1011) at ¶¶43, 50;
`See also Petitions (IPR2019-01649 Paper 2 at 54; IPR2019-01650 Paper 2 at 49)
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`
`41
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`Page 41 of 56
`
`
`
`Grounds 2
`Colnot + Vrotsos disclose the phone’s further processing
`
`’566/’637 claim 3: “… providing said [encrypted] analog signal … to said mobile communication device
`for further processing by circuitry contained in said mobile communication device …”
`
` “[T]he key jack may be plugged into the sound input or headset connector jack
`associated with a mobile smart telephone or PDA enabling authentication through a
`telephone network… Modem 406 and oscillator 405 generate the signal in the form of
`sine waves that are demodulated by a modem provided in the applet on the users
`PC.”
`
`Colnot (Ex. 1011) at ¶¶53, 55;
`See also Petitions (IPR2019-01649 Paper 2 at 56; IPR2019-01650 Paper 2 at 51)
`
` Vrotsos’s phone also performs further processing (see Ground 1)
`
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`
`42
`
`Page 42 of 56
`
`
`
`Ground 2
`Colnot is enabling
`
`*
`
`–
`
` Colnot’s signal transmissions through cellular phone networks would not be
`corrupted
`“The technical reason that the terminal cannot communicate over digital cellular networks is the
`‘vocoders’ in the cellular voice transmission path. These vocoders compress the voice signals,
`making more conversations possible in the same bandwidth, thereby conserving spectrum.
`While effective for transmitting spoken words, the compression responds to modem tones in a
`way that corrupts the data carried therein, and renders the result unusable.”
`Proctor (Ex. 1007) at ¶4
`
`–
`
`“Colnot describes a specific FSK modem signal having the same frequencies as spoken words
`. . . [and] the POSITA would have understood from Proctor’s statement that the cellular
`compression is actually ‘effective’ for transmitting Colnot’s modem signal.”
`Second McNair Decl. (IPR2019-01649 Ex. 1022 ¶¶25-32; IPR2019-01650 Ex. 1022 ¶¶27-32)
`
`See also Pet. Replies (IPR2019-01649 Paper 32 at 13; IPR2019-01650 Paper 31 at 12)
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`43
`
`Page 43 of 56
`
`
`
`Ground 2
`Motivation to combine
`
`*
`
` Reasons to combine the prior art are clear
`
`Petitions (IPR2019-01649 Paper 2 at 46-48; IPR2019-01650 Paper 2 at 42-44, 48-49)
`
` PO’s arguments are faulty because they:
`– Misleadingly state that combining Colnot and Vrotsos would lead
`to two card readers
`– Ignore Petitioner’s reliance on Vrotsos for modifying Colnot’s card
`reader
`Pet. Replies (IPR2019-01649 Paper 32 at 25; IPR2019-01650 Paper 31 at 25)
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
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`44
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`Page 44 of 56
`
`
`
`Ground 3
`
`#
`1
`
`2
`
`3
`
`4
`
`Grounds (identical for ’566 and ’637)
`Obvious from U.S. Patent Pub. # 2002/0091633
`(“Proctor”) in view of U.S. Patent Pub. #
`2005/0236480 (“Vrotsos”)
`Obvious from U.S. Patent Pub. # 2007/0067833
`(“Colnot”) in view of Vrotsos
`Obvious from U.S. Patent # 5,838,773 (“Eisner”) in
`view of Vrotsos and Proctor
`Obvious from Proctor in view of Vrotsos and U.S.
`Patent # 7,810,729 (“Morley”)
`
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`
`45
`
`Page 45 of 56
`
`
`
`Eisner (Ground 3)
`
`Petitions (IPR2019-01649 Paper 2 at 15; IPR2019-01650 Paper 2 at 14)
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`
`46
`
`Page 46 of 56
`
`
`
`Eisner + Vrotsos + Proctor (Ground 3)
`
`Vrotsos
`
`Proctor
`
`Eisner +
`
`+
`
`Petitions (IPR2019-01649 Paper 2 at 18, 20, 22; IPR2019-01650 Paper 2 at 17, 19, 20)
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`47
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`Page 47 of 56
`
`
`
`Ground 3 – Disputes*
`
`Disputed Issues
`Smart card, smart card reader (slide 50)
`Smart card sensor (same as Gd. 1) (slides 12-13)
`Whether Eisner and Proctor are compatible (slides 53)
`Encrypt[ion] (’637 patent) (slides 54-55)
`Mobile device’s further processing (same as Gd. 1) (slides 20-21)
`Motivation to combine (slide 56)
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`48
`
`Page 48 of 56
`
`
`
`Ground 3
`Eisner + Vrotsos disclose preamble
`
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
`Vrotsos discloses the preamble (see Grounds 1 & 2)
`
`Petitions (IPR2019-01649 Paper 2 at 59-60; IPR2019-01650 Paper 2 at 53-54)
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`
`49
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`Page 49 of 56
`
`
`
`Ground 3
`Eisner and Vrotsos each discloses smart card and a smart
`card reader
`’566/’637 claim 1: “A portable smart card reader device for reading a smart card having recorded
`information stored on an integrated circuit incorporated into the card…”
`
`*
`
` Eisner: “IC cards, sometimes referred to as smart cards, which may
`contain the same information as the magnetic stripe, but in an
`integrated circuit, may also be used, although, the card reader would
`be necessarily different.”
`Eisner (Ex. 1012) at 7:52-59
`
` Vrotsos: “[T]he attachment 21 may have a combined magnetic stripe
`reader and smartcard reader . . . A card 51 having a magnetic
`stripe 52 and/or smartchip 53 may be inserted into the slot 22.”
`Vrotsos (Ex. 1009) at ¶41, FIG. 1E
`
`See also Petitions (IPR2019-01649 Paper 2 at 20-21, 59-60; IPR2019-01650 Paper 2 at 18-19, 54-55)
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`50
`
`Page 50 of 56
`
`
`
`Ground 3
`Eisner produces analog signal
`
`’566/’637 claim 1: “… a sensor … for producing an analog signal indicative of the recorded
`information…”
`
`Petitions (IPR2019-01649 Paper 2 at 64-65; IPR2019-01650 Paper 2 at 59-60)
`
`51
`
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`Page 51 of 56
`
`
`
`Ground 3 (’566 patent)
`Eisner + Proctor convert to format suitable
`
`’566 claim 1: “… said sensor including circuitry for converting said analog signal to a format suitable for
`transmission to a jack of a mobile communication device…”
`
`Eisner
`
`Proctor
`
`Petition (IPR2019-01649 Paper 2 at 66-67)
`
`52
`
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`Page 52 of 56
`
`
`
`Ground 3
`Eisner and Proctor are Compatible
`
`*
`
` “[A] POSITA would have been motivated to improve Eisner’s device by adding
`wireless functionality and compatibility with cellular networks… Proctor improves upon
`[Eisner] by increasing the mobility and portability of the card reader by having it
`connect to a mobile phone, instead of a landline telephone.”
`
`First McNair Decl. (IPR2019-01649 Ex. 1003 at ¶182-183; IPR2019-01650 Ex. 1003 at ¶¶ 191-192);
`See also Petitions (IPR2019-01649 Paper 2 at 68; IPR2019-01650 Paper 2 at 62-63);
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`53
`
`Page 53 of 56
`
`
`
`Ground 3 (’637 patent)
`Eisner and Vrotsos each discloses encrypt[ion]
`’637 claim 1: “… said sensor including circuitry for converting said analog signal to an encrypted signal
`suitable for transmission to a jack of a mobile communication device …”
`’637 claim 3: “… produces an encrypted analog signal indicative of the recorded information stored on
`said integrated circuit…”
`
`*
`
` Eisner encrypt[s] card information
`“Eisner provides no indication that its ‘encryptor’ would operate any differently for data read
`from a smart card versus a magnetic card.”
`
`–
`
`Pet. Reply (IPR2019-01650 Paper 31) at 15;
`See also Second McNair Decl. (IPR2019-01650 Ex. 1022) at ¶¶38-40
`
` Vrotsos encrypt[s] card information (see Ground 1)
`“The attachment 21 may encrypt the transaction data captured by the reader 23.”
`–
`Vrotsos (Ex. 1009) at ¶52;
`See also Petition (IPR2019-01650 Paper 2) at 27
`
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`
`54
`
`Page 54 of 56
`
`
`
`Ground 3 (’637 patent)
`POSITA knew to encrypt[] smart card information
`’637 claim 1: “… said sensor including circuitry for converting said analog signal to an encrypted signal
`suitable for transmission to a jack of a mobile communication device …”
`’637 claim 3: “… produces an encrypted analog signal indicative of the recorded information stored on
`said integrated circuit…”
`
`*
`
` “[E]ncrypting smart card data in a smart card reader before sending that data
`to a mobile phone was known.”
`
`First McNair Decl. (IPR2019-01650 Ex. 1003) at ¶105;
`See also Petition (IPR2019-01650 Paper 2) at 27
` “Mr. Zatkovich[] admi[tted] that the POSITA would know to (1) encrypt data
`read from a smart card, (2) read encrypted data from the smart card, and (3)
`convert from an analog signal to an encrypted analog signal.”
`Pet. Reply (IPR2019-01650 Paper 31) at 6;
`See also Zatkovich Dep. Tr. (IPR2019-01650 Ex. 1021) at 154:10-155:22
`
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`
`55
`
`Page 55 of 56
`
`
`
`Ground 3
`Motivation to combine
`
`*
`
` Reasons to combine the prior art are clear
`
`Petitions (IPR2019-01649 Paper 2 at 60-62, 67-69; IPR2019-01650 Paper 2 at 55-57, 61-63)
`
` PO’s arguments are faulty because they:
`– Incorporate the incorrect arguments from Ground 1
`– Fail to address Petitioner’s explanation of motivation to combine
`Pet. Replies (IPR2019-01649 Paper 32 at 25; IPR2019-01650 Paper 31 at 25)
`
`DEMONSTRATIVE EXHIBIT – NOT EVIDENCE
`
`56
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`Page 56 of 56
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`
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