U.S. PATENT NO. 9,613,351
`Petition for Inter Partes Review
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________________________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________________________________
`
`
`Square, Inc.
`Petitioner
`
`v.
`
`4361423 Canada, Inc. d/b/a AnywhereCommerce
`Patent Owner
`
`Case IPR2019-01652
`
`PETITION FOR INTER PARTES REVIEW
`U.S. PATENT NO. 9,613,351
`
`Claims 1-10
`
`
`
`
`
`
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`
`
`
`
`
`
`Petition for Inter Partes Review
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________________________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________________________________
`
`
`Square, Inc.
`Petitioner
`
`v.
`
`4361423 Canada, Inc. d/b/a AnywhereCommerce
`Patent Owner
`
`Case IPR2019-01652
`
`PETITION FOR INTER PARTES REVIEW
`U.S. PATENT NO. 9,613,351
`
`Claims 1-10
`
`
`
`
`
`
`
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`
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`
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`
`U.S. PATENT NO. 9,613,351
`Petition for Inter Partes Review
`
`TABLE OF CONTENTS
`
`INTRODUCTION ............................................................................... 1
`
`
`
`I.
`
`II. MANDATORY NOTICES ................................................................. 1
`
`A.
`
`B.
`
`C.
`
`D.
`
`Real Party-in-Interest ................................................................ 1
`
`Related Matters .......................................................................... 1
`
`Notice of Counsel and Service Information .............................. 2
`
`Fee for Inter Partes Review ...................................................... 3
`
`III. CERTIFICATION OF GROUNDS FOR STANDING ...................... 3
`
`IV. OVERVIEW OF CHALLENGE AND RELIEF REQUESTED ........ 3
`
`V. OVERVIEW OF THE ’351 PATENT ................................................ 5
`
`A.
`
`B.
`
`The ’351 Patent ......................................................................... 5
`
`File History of the ’351 Patent .................................................. 8
`
`VI. OVERVIEW OF PRIOR ART ............................................................ 9
`
`A. Valliani ...................................................................................... 9
`
`B.
`
`C.
`
`Bear .......................................................................................... 11
`
`Vrotsos ..................................................................................... 13
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`VII. SPECIFIC GROUNDS FOR PETITION .......................................... 16
`
`A. Ground I: Claims 1-10 are rendered obvious by Valliani in
`view of Vrotsos under 35 U.S.C. § 103(a) .............................. 17
`
`1.
`
`Claim 1 .......................................................................... 17
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`
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`Claim 2 .......................................................................... 37
`
`Claim 3 .......................................................................... 38
`
`i
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`
`U.S. Patent No. 9,613,351
`Petition for Inter Partes Review
`Claim 4 .......................................................................... 38
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`Claim 5 .......................................................................... 40
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`Claim 6 .......................................................................... 41
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`Claim 7 .......................................................................... 45
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`Claim 8 .......................................................................... 45
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`Claim 9 .......................................................................... 45
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` Claim 10 ........................................................................ 45
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`B.
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`Ground II: Claims 1-6 are rendered obvious by Bear in view of
`Lahteenmaki under 35 U.S.C. § 103(a); ................................. 46
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`Claim 1 .......................................................................... 46
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`Claim 2 .......................................................................... 66
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`Claim 3 .......................................................................... 67
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`Claim 4 .......................................................................... 68
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`Claim 5 .......................................................................... 69
`
`Claim 6 .......................................................................... 69
`
`C.
`
`Ground III: Claims 4-10 are rendered obvious by Bear in view
`of Lahteenmaki and Vrotsos under 35 U.S.C. § 103(a) .......... 70
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`Claim 4: ......................................................................... 70
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`Claim 5 .......................................................................... 72
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`Claim 6 .......................................................................... 73
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`Claim 7 .......................................................................... 76
`
`Claim 8 .......................................................................... 76
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`
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`ii
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`U.S. Patent No. 9,613,351
`Petition for Inter Partes Review
`Claim 9 .......................................................................... 76
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`Claim 10 ........................................................................ 76
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`7.
`
`8.
`
`D. Ground IV: Claims 1-10 are rendered obvious by Vrotsos
`under 35 U.S.C. § 103(a) ......................................................... 76
`
`1.
`
`2.
`
`3.
`
`4.
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`5.
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`Claim 1 .......................................................................... 76
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`Claim 2 .......................................................................... 82
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`Claim 3 .......................................................................... 82
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`Claims 4-5 ..................................................................... 82
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`Claims 6-10 ................................................................... 82
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`VIII. CONCLUSION .................................................................................. 82
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`iii
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`U.S. Patent No. 9,613,351
`Petition for Inter Partes Review
`TABLE OF AUTHORITIES
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`
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`Page(s)
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`FEDERAL CASES
`
`Phillips v. AWH Corp,
`415 F.3d 1303 (Fed. Cir. 2005) .............................................................. 16
`FEDERAL STATUTES
`U.S.C. § 314(a) .............................................................................................. 4
`35 U.S.C. § 102(b) ..................................................................................... 4, 8
`35 U.S.C. § 103(a) ................................................................................ passim
`35 U.S.C. §§ 311-319 .................................................................................... 1
`PDA 10 ......................................................................................................... 29
`FEDERAL RULES
`Rule 42.104(a) ................................................................................................ 3
`Rule 42.104(b)(4)-(5) ................................................................................... 16
`Rules 42.22(a)(1) and 42.104(b)(1)-(2) ......................................................... 3
`FEDERAL REGULATIONS
`35 C.F.R. §§ 42.105 and 42.6 ...................................................................... 84
`37 C.F.R. §§ 42.1-.80, 42.100-.123 ............................................................... 1
`37 C.F.R. § 42.8(b)(1) .................................................................................... 1
`37 C.F.R. § 42.8(b)(4) .................................................................................... 3
`37 C.F.R. § 42.10(b) ...................................................................................... 3
`37 C.F.R. § 42.15(a) ....................................................................................... 3
`37 C.F.R. § 42.100(b) (effective Nov. 13, 2018) ......................................... 16
`
`
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`iv
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`U.S. PATENT NO. 9,613,351
`Petition for Inter Partes Review
`
`Table of Exhibits for U.S. Patent 9,613,351 Petition for Inter Partes Review
`
`Exhibit
`1001
`
`Description
`U.S. Patent No. 9,613,351 to Tang et al.
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`1009
`
`
`
`Claim Listing
`
`Declaration of Michael Shamos (“Shamos Decl.”)
`
`Prosecution History File of Application No. 15/236,408,
`which matured into U.S. Patent No. 9,613,351
`
`U.S. Patent 6,234,389 to Valliani et al. (“Valliani”)
`
`U.S. Patent Application Publication No. 20050236480A1to
`Vrotsos et al. (“Vrotsos”)
`U.S. Patent Application Publication No. 2006/0032905 to
`Bear et al. (“Bear”)
`U.S. Patent Application No. 2003/0183691 to Lahteenmaki
`(“Lahteenmaki”)
`
`v
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`
`
`I.
`
`INTRODUCTION
`
`Pursuant to 35 U.S.C. §§ 311-319 and 37 C.F.R. §§ 42.1-.80, 42.100-.123,
`
`Petitioner Square, Inc. (“Square” or “Petitioner”) hereby petitions for inter partes
`
`review (“IPR”) of claims 1-10 (“Challenged Claims”) of U.S. Patent No. 9,613,351
`
`(the “’351 patent”) and requests cancellation of those claims as unpatentable.
`
`II. MANDATORY NOTICES
`
`A. Real Party-in-Interest
`
`Under 37 C.F.R. § 42.8(b)(1), Petitioner certifies that Square is the real party-
`
`in-interest, and further certifies that no other party exercised control or could have
`
`exercised control over Square’s participation in this proceeding, the filing of this
`
`petition, or the conduct of any ensuing trial.
`
`B. Related Matters
`
`According to assignment records, the ’351 patent is currently assigned to
`
`4361423 Canada INC d/b/a AnywhereCommerce (“AnywhereCommerce”).
`
`As of the filing date of this Petition, and to the best of the Petitioner’s
`
`knowledge, the ’351 patent is involved in a single suit, 4361423 Canada Inc. v.
`
`Square, Inc. N.D.Cal. 4:19-cv-04311-JSW, in which Petitioner is the Defendant.
`
`Petitioner has filed, or will file, concurrent with the present Petition, petitions
`
`for IPR of U.S. Patent Nos. 8,286,875; 8,281,998; 9,016,566; 9,269,084; 9,311,637;
`
`9,443,239; and 9,818,107, which are in the same family as the ’351 patent. Petitioner
`
`
`
`1
`
`
`
`
`
`suggests the Board consider assignment to a common panel in the interest of
`
`efficiency:
`
`U.S. Patent No.
`8,286,875
`8,286,875
`8,281,998
`8,281,998
`9,269,084
`9,269,084
`9,016,566
`9,311,637
`9,443,239
`9,613,351
`9,818,107
`9,818,107
`
`PTAB Case No.
`IPR2019-01625
`IPR2019-01626
`IPR2019-01627
`IPR2019-01628
`IPR2019-01629
`IPR2019-01630
`IPR2019-01649
`IPR2019-01650
`IPR2019-01651
`IPR2019-01652
`IPR2019-01653
`IPR2019-01654
`
`C. Notice of Counsel and Service Information
`
`Petitioner’s counsel are:
`
`Lead Counsel
`David M. Tennant
`Registration No. 48,362
`WHITE & CASE LLP
`701 Thirteenth Street, NW
`Washington, DC 20053807
`202-626-3600 (phone)
`202-639-9355 (fax)
`
`Back-Up Counsel
`Grace I. Wang
`Registration No. 69,892
`WHITE & CASE LLP
`1221 Ave of the Americas
`grace.wang@whitecase.com
`New York, NY 10020-1095
`212-819-8574 (phone)
`Anne-Raphaelle Aubry
`Registration No. L0955
`White & Case LLP
`75 State Street
`Boston, MA 02109-1814
`anne-
`
`2
`
`
`
`
`
`
`
`raphaelle.aubry@whitecase.com
`617-979-9344 (phone)
`
` Power of Attorney is being filed concurrently with this Petition in
`
` A
`
`
`
`
`accordance with 37 C.F.R. § 42.10(b). Petitioner consents to electronic service.
`
`Pursuant to 37 C.F.R. § 42.8(b)(4), all services and communication to the above
`
`attorneys
`
`can
`
`be
`
`sent
`
`to
`
`their
`
`
`addresses
`
`above
`
`and
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`WCSquareAnywhereCommerceTeam@whitecase.com.
`
`D.
`
`Fee for Inter Partes Review
`
`The Director is authorized to charge the fee specified by 37 C.F.R. §
`
`42.15(a), and any other required fees, to Deposit Account No. 50-3672.
`
`III. CERTIFICATION OF GROUNDS FOR STANDING
`
`Petitioner certifies pursuant to Rule 42.104(a) that the patent for which
`
`review is sought is available for IPR and that Petitioner is not barred or estopped
`
`from requesting an IPR challenging the patent claims on the grounds identified in
`
`this Petition.
`
`IV. OVERVIEW OF CHALLENGE AND RELIEF REQUESTED
`
`Pursuant to Rules 42.22(a)(1) and 42.104(b)(1)-(2), Petitioner challenges
`
`claims 1-10 of the ’351 patent.
`
`
`
`3
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`
`
`
`
`
`A.
`
`Prior Art
`
`The following references are pertinent to the grounds of unpatentability
`
`explained below:
`
` U.S. Patent No. 6,234,389 (“Valliani”), filed April 29, 1998, issued May 22,
`
`2001, (Prior Art under 35 U.S.C. § 102(b)).
`
` U.S. Patent Application Publication No. 2005/0236480 (“Vrotsos”), filed
`
`April 23, 2004, published October 27, 2005, (Prior Art under 35 U.S.C. §
`
`102(b)).
`
` U.S. Patent Publication No. 2006/0032905 to Bear (“Bear”), PCT filed June
`
`13, 2003, published February 16, 2006, is prior art under 35 U.S.C. § 102(b).
`
` U.S. Patent Publication No. 2003/0183691 (“Lahteenmaki”), filed May 9,
`
`2003, published October 2, 2003, is prior art under 35 U.S.C. § 102(b).
`
`B. Grounds of Challenge
`
`This Petition, supported by the declaration of Dr. Michael Shamos, Ph.D. (Ex.
`
`1003), demonstrates that there is a reasonable likelihood that Petitioner will prevail
`
`with respect to at least one of the Challenged Claims and that the Challenged Claims
`
`are unpatentable. See U.S.C. § 314(a). Petitioner requests cancellation of the
`
`Challenged Claims under the following statutory grounds:
`
`
`
`4
`
`
`
`
`
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`1. Ground 1: Claims 1-10 are rendered obvious by Valliani in view of
`
`Vrotsos under 35 U.S.C. §103(a).
`
`2. Ground 2: Claims 1-6 are rendered obvious by Bear in view of
`
`Lahteenmaki under 35 U.S.C. §103(a).
`
`3. Ground 3: Claims 4-10 are rendered obvious by Bear in view of
`
`Lahteenmaki and Vrotsos under 35 U.S.C. §103(a).
`
`4. Ground 4: Claim 1-10 are rendered obvious by Vrotsos under 35
`
`U.S.C. §103(a).
`
`V. OVERVIEW OF THE ’351 PATENT
`
`A. The ’351 Patent
`
`The ’351 patent describes the well-known apparatus for performing credit
`
`card transactions using a transaction device (e.g., a credit card reader) coupled to a
`
`jack of a mobile phone. Ex. 1001 Abstract; Ex. 1003, ¶33. Indeed, the ’351 patent
`
`makes several admissions regarding what was known in the art. Ex. 1003, ¶¶34-53.
`
`● Point of sale (POS) device is combined with a wireless communication
`
`device such as a cell phone. Ex. 1001, 1:39-42;
`
`● POS device has a smartcard reader to receive and process information from
`
`smartcard’s integrated circuit. Ex. 1001, 1:43-52;
`
`● POS device sends transaction card information to the cell phone. Ex. 1001,
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`1:52-56;
`
`
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`5
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`
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`● Cell phone transmits the information over a communication network to a
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`remote computer. Ex. 1001, 1:56-61;
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`● Remote computer facilitates validation of a transaction and sends
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`information back to the POS device via the cell phone. Ex. 1001, 1:67-
`
`2:7.
`
`Consistent with the admitted prior art, Fig. 1, reproduced below, illustrates a flow
`
`diagram of such a transaction network. Id., 5:34-37. Ex. 1003, ¶36.
`
`
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`A POS device 12 (blue, similar to the POS device of the applicant admitted
`
`prior art (“AAPA”)) reads and captures credit card information and transmits it in
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`an analog audio format to a communication device 14 such as a mobile phone (red,
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`similar to the wireless communication device of the AAPA). Ex. 1001, 7:37-59.
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`
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`6
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`
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`The phone transmits that data over the communication network 26, such as the
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`internet (id. 7:21-23) to a remote transaction server 18 (purple, similar to the remote
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`computer of the AAPA), which transmits the data to a remote processor/issuer 20
`
`(id. 7:23-28). Ex. 1003 ¶37.
`
`Fig.
`
`2,
`
`reproduced
`
`below,
`
`depicts
`
`a
`
`front
`
`view
`
`of
`
`a
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`“transaction/communication assembly” (id. 5:3-40) including the transaction device
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`12 (blue) and the mobile phone 14 (red) connected over a cable 30 with two end
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`connectors 32. See Ex. 1001, 7:37-59; Ex. 1003, ¶38.
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`
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`Device 12 captures card data at the input device 38 (Ex. 1001, 9:4-8) from a
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`transaction card, which can include “other electronic methods of payment” (id. 6:5-
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`8). The captured data is then transferred to a controller 50 (id. 9:10-11), which
`
`encrypts the transaction data so that it can be transmitted first to the mobile phone
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`
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`7
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`
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`14 in an analog audio format (id. 10:22-33) and later to the remote transaction server
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`18 depicted in Fig. 1 above. Id. 9:10-20. The remote transaction server decodes the
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`data to recover the card data and payment information (id. 10:33-39), and then
`
`communicates this data with a remote processor/issuer to verify and complete the
`
`transaction (id. 10:42-44). Ex. 1003 ¶39.
`
`B.
`
`File History of the ’351 Patent
`
`The applicant filed U.S. Application 15/236,408 (the “’408 application”),
`
`which eventually issued as the ’351 patent on April 4, 2017. Ex. 1004, p. 1. The
`
`’351 patent claims priority1 to a provisional application filed on February 10, 2009.
`
`Ex. 1003, ¶¶40-43.
`
`Prior to the first Office Action on the merits, applicant preliminarily
`
`amended the claims to those claims that would eventually issue as the ten
`
`Challenged Claims. The Office did not issue any prior art rejections. Rather, in
`
`the only Office Action mailed September 2, 2016, the Office rejected the claims
`
`under nonstatutory double patenting, over claims 1 and 21-25 of U.S. Patent No.
`
`9,443,239, over claims 1-4 of U.S. Patent No. 9,311,637, over claims 1 and 9 of
`
`
`1 The prior art for the Challenged Claims are §102(b) prior art regardless of the
`
`claim of priority. Accordingly, for the purpose of this petition, Petitioner has not
`
`addressed the impropriety of the priority claim.
`
`
`
`8
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`
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`
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`U.S. Patent No. 8,281,998, and over claims 1-4 of U.S. Patent No. 9,015,566. Id.
`
`pp. 73-74. In response thereto, the applicant filed a terminal disclaimer with
`
`respect to these patents. Ex. 1004, p. 38. The Office approved the terminal
`
`disclaimer on the same day. Id. p. 43; Ex. 1003, ¶¶44-45.
`
`On November 18, 2016, the Office issued a notice of allowance. Ex. 1004,
`
`p. 9. The ’351 patent issued on April 4, 2017. Id. p. 1; Ex. 1003, ¶41,45.
`
`VI. OVERVIEW OF PRIOR ART
`
`A. Valliani
`
`Valliani discloses a point-of sale transaction system (depicted in Fig. 1,
`
`reproduced below with annotations) for reading and processing data from a smart
`
`card 230 (blue). The system includes a module 200 (red) having a smart card
`
`reader 260 plugged into a device 10 (green), which is a “portable computing
`
`device such as a laptop computer or a personal digital assistant (‘PDA’)”. Ex.
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`1005, 3:51-54. The device 10 communicates with a remote host 75. Ex. 1003,
`
`¶¶57-60.
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`
`
`9
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`
`
`
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`
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`The card 230 is a “smartcard storing data in memory 225.” Id. 4:46-47, see
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`also 2:62-63. That data includes “a card owner’s PIN” (id. 6:27-29), a “token
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`PIN” (id. 7:13-15), and “user account number, present maximum dollar limit of the
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`account, user identification” (id. 7:62-64). Smart card reader/writer unit 260 reads
`
`from memory 225 on the smart card. Id. 8:1-3.
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`Card data is encrypted before it is sent to the mobile communication device
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`10 so that “the actual PIN value [can] never be known to device 10.” Id. 5:41-42.
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`Otherwise, “an unscrupulous vendor might program device 10 with software that
`
`would capture and store in memory 30 or 40 a copy of the user’s decoded PIN
`
`
`
`10
`
`
`
`
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`value, and account number… [and] could illegally seek to impersonate the user.”
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`Id. 5:45-49.
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`The device 10 receives the encrypted data from the module 200, including
`
`the card data as well as a user-input PIN (id. 5:32-35, 6:33-35). The device 10 is
`
`loaded with software routines such as “point of sale software and software
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`driver(s) for the PCMCIA-implemented… smartcard reader/writer unit 260” and
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`executes routines on the data, Id. 6:4-12.
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`Device 10 transmits the encrypted card data to the host system 75, and the
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`host system 75 validates the card data. Id. 6:36-42. The remote system validates
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`the card data and sends a signal to the device 10 indicating whether the transaction
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`may proceed. Id. 6:42-46.
`
`B.
`
`Bear
`
`Bear discloses a system and method for the verification of credit card
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`purchases using wireless communications. Ex. 1007, Abstract; ¶31. Figure 3
`
`below illustrates an exemplary system, which includes a smart card 60 (green), a
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`smart card device 100 (blue), a cellular device 104 (red), and a remote server 106.
`
`Ex. 1003, ¶¶71-73.
`
`
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`11
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`
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`The smart card device 100 has a smart card reader 64 that reads data from a
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`smart card 60, such as authentication data. Ex. 1007, ¶41. A controller 52 within
`
`the smart card device 100 processes that data by encrypting it (id. ¶48) and
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`converting it into a proper format for transmission to the cellular device 104, such
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`as a phone. To transmit the processed data to the phone, the smart card device 100
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`also includes a transceiver 102 that establishes a communication link with the
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`phone, such as an infrared (IR), earphone and speaker, or Bluetooth connection.
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`Id. ¶¶39-40, see also Fig. 3.
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`
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`12
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`
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`After receiving the data from smart card device 100, cellular device 104
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`sends the data to a remote server 106, which uses the data to remotely process a
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`credit/debit or pre-paid transaction. Id. ¶¶61-62.
`
`C. Vrotsos
`
`Vrotsos discloses a smart card reader that attaches to a mobile phone. Ex.
`
`1003, ¶63. Fig. 1D (reproduced below) of Vrotsos depicts an attachment 21
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`secured to a mobile phone 1, where the attachment includes a slot for reading data
`
`from a smart card. Ex. 1006, ¶41; Ex. 1003, ¶63.
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`
`
`
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`13
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`
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`
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`Referencing Fig. 10 (reproduced and annotated below), Vrotsos’s
`
`attachment 21 (blue) plugs into communication device 1 (red) over an RS-232
`
`serial interface (gold), or another type of “serial or parallel interface connector[]”.
`
`Ex. 1009, ¶43; Ex. 1003, ¶63.
`
`
`
`
`
`As depicted in Fig. 10, the attachment 21 includes a processor 303, which
`
`performs processing on the card data, such as “encrypt[ing] the transaction data
`
`captured by the [card] reader 23”. Ex. 1009, ¶52, see also ¶¶75, 78, 94; Ex. 1003,
`
`¶66.
`
`
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`The attachment 21 transmits the encrypted transaction data over the
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`RS-232 serial interface (or other serial or parallel interface connector) to the
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`cell phone, which performs additional processing on the data, such as
`
`
`
`14
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`
`
`
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`“convert[ing] audio input received at the microphone 8 to digital data, a
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`filter to improve the quality of the digital data, and the like.” Ex. 1009, ¶74,
`
`see also ¶53, 97; Ex. 1003, ¶66. The phone also communicates with a
`
`remote server 101 over a communication network 102 to facilitate a
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`transaction, including sending a transaction transmission and receiving a
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`transaction response over the communication network 102. See Ex. 1009,
`
`Fig. 7; Ex. 1003, ¶65.
`
`
`II.
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`PERSON HAVING ORDINARY SKILL IN THE ART
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`The level of a person of ordinary skill in the art (“POSITA”) needed to have
`
`the capability of understanding the scientific and engineering principles applicable
`
`to the ’351 patent is (i) a Bachelor of Science in Electrical Engineering or
`
`Computer Engineering, or the equivalent and have at least one to two years of
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`relevant experience in the fields of embedded systems and mobile communication
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`device interfaces, or otherwise equivalent industry experience in the relevant field.
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`Less work experience may be compensated by a higher level of education, such as
`
`a Master’s Degree, and vice versa. Ex. 1003, ¶¶17-25.
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`
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`15
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`
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`III. CLAIM CONSTRUCTION
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`Claim terms of a patent in IPR are given their “ordinary and customary
`
`meaning . . . as understood by [a POSITA] and the prosecution history pertaining
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`to the patent.” See 37 C.F.R. § 42.100(b) (effective Nov. 13, 2018); Phillips v.
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`AWH Corp, 415 F.3d 1303, 1312-13 (Fed. Cir. 2005). The ordinary meaning may
`
`be readily apparent to a POSITA and involves little more than application of the
`
`accepted meaning, and in these cases general-purpose dictionaries may be used.
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`Id. at 1314.
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`Here, a POSITA would apply the ordinary and customary meanings to all
`
`the claim elements in the challenged claims of the ’351 patent, such that no
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`specific claim construction is necessary. Ex. 1003, ¶47.
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`VII. SPECIFIC GROUNDS FOR PETITION
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`Pursuant to Rule 42.104(b)(4)-(5), the sections below demonstrate in detail
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`how the prior art discloses each and every limitation of the Challenged Claims, and
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`how those claims are rendered obvious by the prior art, or would have been
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`combined by a POSITA. The declaration by Professor Shamos, who qualifies as a
`
`POSITA, reinforces these analyses and supports these conclusions. Ex. 1003, ¶78-
`
`85.
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`
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`16
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`
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`A. Ground I: Claims 1-10 are rendered obvious by Valliani in view of
`Vrotsos under 35 U.S.C. § 103(a)
`1.
`
`Claim 1
`
`(a) Preamble: “A portable reader apparatus for reading a payment
`device having information stored on an integrated circuit
`incorporated
`into said payment device,
`the apparatus
`comprising
`
`To the extent it is deemed limiting, Valliani discloses the preamble.
`
`Referencing Figure 1, reproduced below, Valliani discloses a reader apparatus
`
`device for reading data as a module 200, shown in blue. It reads the data from a
`
`payment device, shown in green. The module 200 plugs into a device 10, which is
`
`a personal digital assistant (“PDA”). See Ex. 1005, 3:18-24, 3:51-54, 4:38-49, 1:38-
`
`45; Ex. 1003, ¶¶1-5. The module 200 includes a smart card reader/writer unit 260
`
`that “is utilized if card 230 is a smartcard storing data in memory 225.” Ex. 1005,
`
`4:45-46, Ex. 1003, ¶6. The data (gold) stored in memory 225 (brown) corresponds
`
`to the information stored on an integrated circuit incorporated into the smart card.
`
`That information stored includes “user account number, present maximum dollar
`
`limit of the account, [and] user identification,” as well as “a card owner’s PIN . . .
`
`stored in memory 225.” Ex. 1005, 6:27-29; 7:62-64; Ex. 1003, ¶7.
`
`
`
`17
`
`
`
`
`
`
`
`
`The module 200, together with the device 10, is portable. Ex. 1005, 2:33-34,
`
`see also id. 3:18-21, 3:43-46, 7:49-8:6, 2:65-67; Ex. 1003, ¶¶C8-12.
`
`Figure 7 (reproduced below with annotations) depicts the module 200 (blue)
`
`including a smart card reader/writer unit 260. A smart card 230 (green) is inserted
`
`such that smartcard reader/write unit 260 reads the information stored on the
`
`memory 225 (brown). The smartcard reader/writer unit 260 is “used with a PDA to
`
`implement a PCMCIA-based point of sale transaction terminal system.” Id. 3:43-46.
`
`Ex. 1003, ¶¶C8-12.
`
`
`
`18
`
`
`
`
`
`
`
`
`
`
`Accordingly, Valliani discloses this limitation. Ex. 1003, ¶C13.
`
`(b) Element [1.A]: “a sensor for reading information stored on said
`integrated circuit incorporated into said payment device
`
`As stated supra in Section VII.A.1.a, Valliani’s module 200 includes a
`
`smartcard reader/writer unit 260, which includes a sensor that reads a smart card that
`
`has recorded information stored on said integrated circuit incorporated into said
`
`payment device. Ex. 1005, 7:61-8:6; Ex. 1003, ¶¶C14-15. Valliani also discloses
`
`data stored in memory on that smart card (Ex. 1005, 4:45-47), corresponding to
`
`
`
`19
`
`
`
`
`
`information stored on said integrated circuit incorporated into said payment device.
`
`Ex. 1003, ¶¶C14-16.
`
`(i) Vrotsos
`Vrotsos discloses a smart card reader, a portable reader apparatus, that reads
`
`information from a smart card, a payment device, and communicates with a mobile
`
`device over a physical connection. The smart card reader includes a portion 55 for
`
`reading information from the smart chip 53 of a credit card (Ex. 1006, ¶41, see
`
`Figure 1E, reproduced below, showing the card reader in blue, the smart card in
`
`green, and the integrated circuit in gold). Ex. 1003, ¶¶C17-22.
`
`
`
`
`
`When “[a] card 51 having a . . . smartchip 53 [is] inserted into the slot 22”
`
`(Ex. 1006, ¶41), a smartcard read/write head within the slot 22 can read information
`
`from, or write information to, the smartchip 53 (corresponding to the claimed
`
`integrated circuit incorporated into the payment device). Ex. 1003, ¶¶C21-22. In
`
`
`
`20
`
`
`
`
`
`Vrotsos, the smartcard read/write head is a sensor for reading information stored on
`
`said integrated circuit incorporated into said payment device. Id.
`
`(ii) Motivation to Combine
`A POSITA would have found it obvious to incorporate Vrotsos’s teachings
`
`into Valliani in order to implement the smart card reader/writer unit 260 to include
`
`a sensor for reading information stored on said integrated circuit incorporated into
`
`said payment device. Id. ¶¶C23-25. Valliani’s module includes a smart card
`
`reader/writer unit 260 that reads data stored in card’s memory. Ex. 1005, 4:42-47.
`
`To the extent Valliani does not provide a specific configuration of a sensor, a
`
`POSITA would have looked to another reference that provides details of how to
`
`implement that sensor. Ex. 1003, ¶¶C23-26.
`
`First, both Valliani and Vrotsos need to read data stored on a smartcard’s chip
`
`(Ex. 1005, 4:42-47; Ex. 1006, ¶¶28-31, 41). A POSITA would have been motivated
`
`by Vrotsos, which discloses a smartcard read/write head within the slot to read
`
`information from the smartchip. Ex. 1006 ¶41; Ex. 1003, ¶¶C23-26.
`
`Second, Vrotsos complements Valliani. Valliani’s system is a portable
`
`system that reads card data from a smart card (Ex. 1005, 3:18-21, 8:1-3), processes
`
`it (id. 5:30-40), and sends the data to the portable computing device (id.), which
`
`communications with a remote server to verify information from the smart card (id.
`
`6:33-43). Ex. 1003, ¶¶C14-16. Vrotsos’s system likewise is portable and reads
`
`
`
`21
`
`
`
`
`
`information stored on a credit card (Ex. 1006, ¶41), processes that information (id.
`
`¶52), and transmits it to the phone (id. ¶43), which transmits the data to a remote
`
`computer to process the credit card information and facilitate the transaction (id.
`
`¶53). Ex. 1003, ¶¶C17-20. Thus, Vrotsos discloses a specific configuration that
`
`provides the same function described by Valliani. Ex. 1003, ¶¶C21-26.
`
`Accordingly, a POSITA would have looked to Vrotsos. Id.
`
`Third, using a smartcard read/write head was known to read information
`
`stored on a smart card. A POSITA applying Vrotsos’s teaching to Valliani would
`
`have expected to yield the predictable result of success. Ex. 1003, ¶C25. Applying
`
`a smartcard read/write head to Valliani’s smart card read/write unit 260 would have
`
`enabled the unit 260 to read the data encoded by the smartcard’s memory 225. Id.,
`
`Ex. 1006, ¶41.
`
`(c) Element [1.B]: “a controller coupled to the sensor for
`converting said information to a format suitable for transmission
`to a mobile communication device; and
`
`Valliani’s portable smart card reader device includes electronics 210 that
`
`convert a card owner’s PIN data, corresponding to information stored on said
`
`integrated circuit, into a format suitable for transmission to a communication
`
`device. Ex. 1005, 5:19-29; Ex. 1003, ¶C27. Electronics 210 in the module 200
`
`include associated read head electronics, including a controller that “can process the
`
`magnetically sensed information.” Ex. 1005, 5:24-26; Ex. 1003, ¶¶C27-31.
`
`
`
`22
`
`
`
`
`
`Regardless of whether the data read from the card corresponds to the PIN or other
`
`card information, such as card number and expiration date, it would have been
`
`obvious to a POSITA to process card data received from the read head in the card
`
`reader device. Ex. 1003, ¶¶C30-37.
`
`To the extent that Valliani’s electronics 210 convert the information stored on
`
`a magnetic stripe card, and not on an integrated circuit of a smart card, a POSITA
`
`would have been motivated to process smart card data. Given that Valliani’s
`
`electronics 210 already process magnetic stripe data read from a magnetic stripe, it
`
`would have been obvious to a POSITA to implement the module 200 to also perform
`
`conversion on smart card data. Id.
`
`Valliani already contemplates that electronics 210, corresponding to the
`
`controller, would be coupled to the smartcard reader/writer unit’s sensor. Id.
`
`Valliani contemplates that module 200 would include both the smart card
`
`reader/writer unit to read information from a smart card as well as electronics 210
`
`to convert[] that information into a format suitable for transmission. Ex. 1003,
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`¶¶C30-37.
`
`
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`23
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`
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`
`
`
`
`
`Moreover, as depicted in Fig. 1 (see supra in Section IX.A.1.a), the electronics
`
`210 are coupled to the smart card reader/writer 260 that includes the sensor.
`
`The smartcard reader/writer unit 260 includes similar functionality as
`
`electronics 210. Ex. 1003, ¶¶C30-37. The module 200 may include only a
`
`smartcard reader/writer unit 260 (Ex. 1005, 4:47-49). When the module 200
`
`includes only the smartcard reader/writer 260, electronics were present to encrypt
`
`the smart card data and convert it to a PCMCIA-compliant format. Ex. 1003,
`
`¶¶C30-37. A POSITA would have been motivated to implement the module 200
`
`to include a controller that converts the data Into a format for sending. Whether
`
`that controller
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