Square, Inc.
`v.
`4361423 Canada Inc.
`IPR2019-01651
`IPR2019-01652
`
`1
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`February 10, 2021
`4361423 Canada Inc. Exhibit 2015
`Square, Inc. v. 4361423 Canada Inc.
`IPR2019-01652
`Page 1
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`
`v.
`4361423 Canada Inc.
`IPR2019-01651
`IPR2019-01652
`
`1
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`February 10, 2021
`4361423 Canada Inc. Exhibit 2015
`Square, Inc. v. 4361423 Canada Inc.
`IPR2019-01652
`Page 1
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`
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`IPR2019-01651
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`U.S. Patent No. 9,443,239
`
`• Ground 1:
`• Claims 1-6 - Valliani in view of Vrotsos under 35 U.S.C. §103(a)
`
`• Ground 2:
`• Claims 1-6 - Bear in view of Vrotsos under 35 U.S.C. §103(a)
`
`• Ground 3:
`• Claims 1-6 - Vrotsos under 35 U.S.C. §103(a)
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`2
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`IPR2019-01652 Exhibit 2015 Page 2
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`The ‘239 Patent
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`IPR2019-01651
`Ex. 1001
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`IPR2019-01652 Exhibit 2015 Page 3
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`
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`Ground 1
`
`Claims 1-6 - Valliani in view of Vrotsos under
`35 U.S.C. §103(a)
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`IPR2019-01652 Exhibit 2015 Page 4
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• ‘239 claims require a sensor for reading the recorded information
`stored on the integrated circuit
`
`Ex. 1001, p. 15
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`5
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`IPR2019-01652 Exhibit 2015 Page 5
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`“Smart Card”
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`6
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`Ex. 2004 (Zatkovitch Dec.), ¶18
`(POR, pp. 12-13, 15)
`IPR2019-01652 Exhibit 2015 Page 6
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`
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`“Smart Card”
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`Ex. 2004, ¶23
`(POR, p. 31)
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`Ex. 2004, ¶26
`(POR, p. 12)
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`IPR2019-01652 Exhibit 2015 Page 7
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• “… Valliani references the unit 210 as being able to sense information from the
`card. Unit 210, however, is a magnetic stripe reader and not a smart card reader.”
`(POR, p. 13)
`• “Valliani proves as much when it specifies that “as magnetic stripe 220 moves
`through slot 290, a read head associated with unit 210 senses magnetic charge
`embedded in stripe(s) 220. If desired, module 200 could also be used to write
`information magnetically to stripe(s) 220 on card 230.” Ex. 1005, 5:20-24
`(emphasis added); see also id. at 5:20-26 (“Associated read head electronics in
`unit 210 can process the magnetically sensed information to learn what was
`embedded in stripe 220.”).” (POR, p. 13)
`• “Thus, despite the mention of a smart card and a reference to memory, a POSITA
`would understand that Valliani only describes a magnetic stripe reader
`performing a reading activity and offers no disclosure of a sensor that would
`actually have the ability to read an integrated circuit of a smart card.” (POR, p. 14)
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`IPR2019-01652 Exhibit 2015 Page 8
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• “Vrotsos certainly does not supply the sensor for reading an
`integrated circuit that is missing from Valliani. Petitioner asserts that
`Vrotsos’s “smartcard read/write head” constitutes the claimed sensor,
`but Petitioner is incorrect.” (POR, p. 14)
`• “A POSITA would understand that a read/write “head” refers to a
`magnetic read head used for magnetic stripe. Ex. 2004, ¶35. This is
`consistent with how Vrotsos itself refers to the magnetic stripe sensor
`as “reader head 23,” which is a standard industry term for a magnetic
`read head. Id., ¶35. A magnetic read head would not be compatible
`with a sensor required to read an integrated circuit within a smart
`card … .” (POR, p. 14)
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`IPR2019-01652 Exhibit 2015 Page 9
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• ‘239 claims require a controller for converting the recorded information into an
`encrypted signal
`
`Ex. 1001, p. 15
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`10
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`IPR2019-01652 Exhibit 2015 Page 10
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`“a controller”
`• The “controller”: a microprocessor, microcontroller, or similar.
`Controls the flow of operations. (POR, p. 34, discussing “flow of operations”; POSR, p.
`10, citing Zatkovich).
`
`• A controller has to perform the claimed functions of “converting the
`recorded information stored on said integrated circuit into an encrypted
`signal indicative of the recorded information” and “transmitting” the
`converted information. (Claim 1) (Claim 4 is similar) (see previous page)
`
`• Controller would have to receive, interpret and process that information
`as digital payment information. (POR, p. 34, citing Zatkovich)
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`IPR2019-01652 Exhibit 2015 Page 11
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`“a controller”
`
`“A POSITA would understand that in order to
`convert the card information retrieved from the
`card reader … to an encrypted signal for
`transmission it would require a microprocessor,
`microcontroller, or a controller with similar
`processing power.”
`
`(POSR, p. 10; Ex. 2004, ¶48)
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`IPR2019-01652 Exhibit 2015 Page 12
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`“a controller”
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`Ex. 2005, p. 6 (Tang Provisional Application) (cited/quoted at Petitioner’s Reply, p. 4)
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`IPR2019-01652 Exhibit 2015 Page 13
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`Valliani’s “electronics 210”
`• “First, the purported controller, ‘electronics 210,’ is a component of
`the Valliani reader’s magstripe reader – not a reader for smart cards
`and specifically not having a controller coupled to a sensor for reading
`and converting recorded information stored on the integrated circuit
`of a smart card.” (POR, p. 17)
`• “Second, ‘electronics 210’ does not perform any kind of conversion or
`encryption of recorded information stored on the integrated circuit as
`required for the claimed controller.” (POR, p. 17)
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`IPR2019-01652 Exhibit 2015 Page 14
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• “Valliani clearly contemplates that processing of information from an integrated circuit
`would be carried out, if at all, in mobile device 10 … rather than module 200. See Ex.
`1005, 6:1-15 (software 35/45 is loaded onto device 10 and performs processing functions
`and routines); id., 8:7-15 (explaining that Valliani’s reader device, ‘module 200,’ ‘could be
`marketed as a modular kit, ... [which] could also include appropriate software 35/45
`storable in device 10 memory for execution by CPU 20.’); Ex. 2004, ¶¶49-52.” (POR, p. 17)
`• Vrotsos on Valliani:
`“U.S. Pat. No. 6,234,389 to Valliani et al. describes an [sic] module that may
`interface with a laptop computer or personal digital assistant (PDA) through a
`PCMCIA interface. … However, … data must be transferred to a processor within
`the main device (as opposed to the attachment) before being transmitted, either
`over the wireless network or the PSTN, to the remote computer. Therefore, in the
`system disclosed in the Valliani et al. patent, the telephone, laptop computer or
`PDA is still required to satisfy unnecessarily high hardware and software
`requirements, just as with the integrated systems.”
`(POR, p.17-18, quoting Vrotsos ¶5)
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`IPR2019-01652 Exhibit 2015 Page 15
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
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`16
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`Ex. 1005, Fig. 1
`(Pet. at pp. 8, 22, 26)
`IPR2019-01652 Exhibit 2015 Page 16
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• “Valliani does not disclose the claimed controller coupled to the
`sensor claimed in independent claims 1 and 4, which require that
`encryption of information of the integrated circuit must happen
`before the information is transmitted to a mobile communication
`device.” (POR, p. 18)
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`17
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`POSR, p. 9
`IPR2019-01652 Exhibit 2015 Page 17
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`Ground 1: Valliani + Vrotsos (Claim 1-6)
`
`‘239 claims require transmitting to remote transaction server for processing a commercial
`transaction
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`18
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`Ex. 1001, p. 15
`IPR2019-01652 Exhibit 2015 Page 18
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`
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`Ground 1: Valliani + Vrotsos (Claims 1-6)
`• “Valliani’s intent is not to perform a commercial transaction, but rather to
`provide a separate validation function in the form of PIN/signature
`authentication.” (POR, p. 21)
`• “Valliani describes the purpose of the PIN authentication, which is ‘to
`confirm that the card 230 has not been lost or stolen,’ and describes that
`the authentication step may require the user of the card to ‘manually input
`PIN data’ using device 210. This PIN data is then sent to host system 75 to
`compare the PIN entry with the known PIN on file.” (POR, p. 21)
`• “Valliani explains that the ‘comparison outcome is sent by host system 75
`to device 10,’ and that this is where the user learns ‘whether the sale
`should proceed.’” (POR, p. 21)
`• “There is no disclosure at all in Valliani regarding the actual transaction of a
`sale … in the event that the user is authenticated.” (POR, p. 21)
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`IPR2019-01652 Exhibit 2015 Page 19
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`Ground 1: Valliani + Vrotsos (Claim 1-6)
`
`• Claims 1 and 4 require that the controller of the reader device
`transmits its converted “encrypted signal indicative of the recorded
`information” stored on the smart card’s integrated circuit to the
`mobile communication device.
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`20
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`IPR2019-01652 Exhibit 2015 Page 20
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`
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`Ground 1: Valliani + Vrotsos (Claim 1-6)
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`21
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`IPR2019-01652 Exhibit 2015 Page 21
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`Ex. 1005, p. 11, 5:20-32 (quoted at POR, p. 22)
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`
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`Ground 1: Valliani + Vrotsos (Claim 1-6)
`
`• “Valliani does not disclose the encryption of the information from the
`integrated circuit in module 200. Valliani only discusses that
`‘additional software can also provide data encryption and decoding’
`somewhere in the system, with the only encryption explicitly
`described as happening in module 200 is when PIN data is manually
`entered by the user at the keypad and then encrypted.” (POR, p. 22)
`• “Valliani discloses only the intent and capability to encrypt PIN
`information and provides no indication of any controller in the reader
`encrypting recorded information read from the integrated circuit.”
`(POR, p. 23)
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`22
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`IPR2019-01652 Exhibit 2015 Page 22
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`Ground 1: Valliani + Vrotsos (Claim 1-6)
`
`• “The combination of Valliani and Vrotsos does not disclose
`transmitting an encrypted signal produced by the controller and
`representing information stored on an integrated circuit.” (POR, p. 23)
`• “[A] POSITA would not understand Vrotsos’s ‘smartcard read/write
`head’ to constitute a reader of a smart card integrated circuit.” (POR, p. 23)
`• “Vrotsos does disclose the encryption of the card information, but the
`encrypted information is derived from Vrotsos’s magstripe reader 23.”
`(POR, p. 24)
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`23
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`IPR2019-01652 Exhibit 2015 Page 23
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`Ground 1: Valliani + Vrotsos (Claims 3, 6)
`
`• Dependent claims 3 and 6 require that the mobile communication
`device “receives transaction validation information from said remote
`transaction server.”
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`24
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`IPR2019-01652 Exhibit 2015 Page 24
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`Ground 1: Valliani + Vrotsos (Claims 3, 6)
`• “As described above, Valliani does not disclose processing a commercial
`transaction because a commercial transaction would require some form of
`payment in exchange for goods and services.” (POR, p. 25)
`
`• “The asserted remote host 75 in Valliani is used for retrieving and verifying
`PIN and signature data—not for processing a commercial transaction.” (POR,
`p. 25)
`
`• “Although Valliani mentions that the results of this PIN or signature
`verification may inform the user ‘whether the sale should proceed,’ there is
`no mention of transaction processor, processing a commercial transaction,
`or of receiving verification from a commercial transaction.” (POR, p. 25)
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`25
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`IPR2019-01652 Exhibit 2015 Page 25
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`Ground 1: Valliani + Vrotsos – No motivation
`to combine
`“First, a claimed invention is not obvious unless prior art references
`establish “the motivation, suggestion or teaching of the desirability of
`making the specific combination that was made by the applicant.” In
`re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000) (emphasis added).”
`(POR, p. 5)
`“Second, beyond looking for the full quantity of the claim elements in
`the prior art, the quality of the evidence and analysis matters. ‘Broad
`conclusory statements standing alone are not “evidence”’ of a
`suggestion, teaching, or motivation to combine under § 103. Id.”
`(POR, p. 5)
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`26
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`IPR2019-01652 Exhibit 2015 Page 26
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`Ground 1: Valliani + Vrotsos – No motivation
`to combine
`• “At root, neither Valliani nor Vrotsos would teach a POSITA anything
`of substance about the reading and encryption of data from an
`integrated circuit, and a POSITA would not see the value in
`consulting either reference (and certainly not in combining them) in
`reference to an invention that is focused on the reading and
`encryption of information from the integrated circuit of a smart
`card.” (POR, pp. 27-28)
`• “[A] POSITA would understand that no aspects of Vrotsos’
`converting or communicating data between its reader and cell
`phone (e.g., RS232 link) are compatible with Valliani’s reader and
`communication device (PCMCIA Bus).” (POR, p. 28)
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`27
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`IPR2019-01652 Exhibit 2015 Page 27
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`Ground 1: Valliani + Vrotsos – No motivation
`to combine
`
`• The objective of Valliani is to produce a line of PCMCIA based products. See Ex. 2004
`(Zatkovich Dec.) at ¶94-101. (POR, p. 27)
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`28
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`IPR2019-01652 Exhibit 2015 Page 28
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`Ground 2
`
`Claims 1-6 - Bear in view of Vrotsos under
`35 U.S.C. §103(a)
`
`29
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`IPR2019-01652 Exhibit 2015 Page 29
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`sensor for reading the recorded information stored on the integrated circuit of a smart card
`
`‘239 claims require a sensor for reading the recorded information
`stored on the integrated circuit of a smart card
`
`30
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`Ex. 1001, p. 15
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`IPR2019-01652 Exhibit 2015 Page 30
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`sensor for reading the recorded information stored on the integrated circuit of a smart card
`• “Bear does not disclose smart card or sensor for reading a smart card
`containing an integrated circuit.” (POR, p. 31)
`• “Bear considers a SIM chip from a cellular phone ¶0003, ¶0006 as being a
`smart card. Ex. 1007. A SIM card is not capable of performing a commercial
`transaction, and it cannot be read at a point-of-sale device for initiating a
`commercial transaction.” (POR, p. 31)
`• “Although Bear does identify an embodiment that connects to a POS
`device, and a smart card that ‘could be used as a regular credit/debit card
`… ’ a POSITA would not consider a smartcard to be a regular credit/debit
`card. Ex. 2004, ¶108. Smart cards were designed with additional features,
`such as integrated circuits, that made them unique from “regular” payment
`cards.” (POR, p. 31)
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`31
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`IPR2019-01652 Exhibit 2015 Page 31
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`sensor for reading the recorded information stored on the integrated circuit of a smart card
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`32
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`(POSR, p. 16)
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`IPR2019-01652 Exhibit 2015 Page 32
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`controller and conversion into an encrypted signal
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`33
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`Ex. 1001, p. 15
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`IPR2019-01652 Exhibit 2015 Page 33
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`controller and conversion into an encrypted signal
`
`• “The claims of the ‘239 patent require the controller to control the flow of
`operations. This includes receiving information from the smart card’s
`integrated circuit via the sensor. The controller then needs to interpret and
`process that information as digital credit card information, then converts it
`to an encrypted signal for transmission to a mobile communication device.”
`(POR, p. 34)
`• Bear’s SIM? “The only thing that Bear substantive describes about the SIM
`is that it is a component that might be able to encrypt PIN and biometric
`data. Ex. 1007, ¶¶48, 59. There is nothing describing the full functionality
`of the claimed controller in the ‘239 patent described above, and a POSITA
`would know better than to assume that a SIM would be used to provide
`that type of functionality.” (POR, p. 34)
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`34
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`IPR2019-01652 Exhibit 2015 Page 34
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`controller and conversion into an encrypted signal
`
`• Bear’s “controller 52”:
`
`(Ex. 1007, p. 8, ¶33, quoted at POR, p. 35)
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`35
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`IPR2019-01652 Exhibit 2015 Page 35
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`controller and conversion into an encrypted signal
`• “The ‘239 claims a controller that is coupled to the sensor, converts
`the information recorded on a smart card’s IC into an encrypted
`signal, and transmits the signal.” (POSR, p. 17)
`• “The controller cannot be both ‘controller 52’ and the SIM that Bear
`discusses for PIN encryption. … To the extent that Petitioenr now
`suggests that ‘controller 52’ is the controller, this is also contradicted
`by Petitioner’s other arguments regarding the SIM, and by Bear’s
`description of how the controller works and its ‘minimal processing
`capabilities.’” (POSR, p. 17)
`• “There is nothing in Bear allocating the claimed encryption
`capabilities to controller 52.” (POSR, p. 18)
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`36
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`IPR2019-01652 Exhibit 2015 Page 36
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`controller and conversion into an encrypted signal
`Combining Bear + Vrotsos
`• “Vrotsos does not disclose the controller claimed in the ‘239 patent
`that performs the functions of taking information indicative of what is
`stored on an integrated circuit, encrypting that information into an
`encrypted signal, and transmitting that encrypted signal to a mobile
`communication device. Vrotsos’s disclosure does not support the
`reading of an integrated circuit.” (POR, p. 36)
`• “Furthermore, Vrotsos does not disclose transmitting a signal
`containing encrypted information representing information stored on
`an integrated circuit.” (POR, p. 36)
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`37
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`IPR2019-01652 Exhibit 2015 Page 37
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`Ground 2: Bear + Vrotsos (Claims 4, 5-6)
`“further processing by circuitry contained in said mobile communication device”
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`38
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`Ex. 1001, p. 15
`IPR2019-01652 Exhibit 2015 Page 38
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`Ground 2: Bear + Vrotsos (Claims 4, 5-6)
`“further processing by circuitry contained in said mobile communication device”
`
`• “further processing” is not just reformatting, repackaging or relaying
`the encrypted signal to the transaction server. (Ex. 2004, ¶164; POR, p. 37)
`• Square in Morley IPR:
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`39
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`Ex. 2001, pp. 52-53
`(POR, p. 39)
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`IPR2019-01652 Exhibit 2015 Page 39
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`
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`Ground 2: Bear + Vrotsos (Claims 4, 5-6)
`“further processing by circuitry contained in said mobile communication device”
`
`• “Minimally the information from the card must be extracted in order
`to be processed, and there is no disclosure that Bear’s wireless
`communication device performs any processing other than passing
`the information on to the transaction server. See, e.g., Ex. 1007,
`¶¶46-48 … .” (POR, p. 37)
`• “Bear+ Vrotsos … Vrotsos’s processor 303 communicates digitally
`with the communication device … . Petitioner does nothing other
`than argue that Vrotsos discloses the possibility of an A/D converter
`without explaining how Vrotsos ever uses it to perform “further
`processing.” (POSR, p. 21)
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`40
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`IPR2019-01652 Exhibit 2015 Page 40
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`transmitting the encrypted signal indicative of the recorded information
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`41
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`Ex. 1001, p 15
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`IPR2019-01652 Exhibit 2015 Page 41
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`transmitting the encrypted signal indicative of the recorded information
`
`• “Petitioner seems to believe that encrypting any card information is
`the same as producing an encrypted signal corresponding to the
`information stored on the integrated circuit of a smart card.” (POR, p. 40)
`• “Bear states … that there is an encryption device identified as a SIM
`(Ex. 1007, ¶35) that may be used for encryption of PIN/biometric
`data, but that the encryption may occur in the smart card itself. Id.
`¶48.” (POR, p. 41)
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`42
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`IPR2019-01652 Exhibit 2015 Page 42
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`transmitting the encrypted signal indicative of the recorded information
`• “When Petitioner refers to Bear ¶71 stating that ‘communicated data may
`be encrypted as described herein above,’ the ‘herein above’ describes the
`device as being used for general authentication purposes, such as
`authentication of an ID in order to verify a user’s bank balance. In the
`example, Bear also states the PIN entry is optional and need not be
`transmitted, as it may be authenticated in the card itself.” (POR, p. 42)
`• “In disclosing the encryption and transmission of PIN/biometric data with
`no significant disclosure of anything else, Bear does not disclose the
`elements of independent claims 1 and 4.” (POR, p. 42)
`• Bear + Vrotsos does not show IC encryption. “Vrotsos does disclose the
`encryption of the card information, but the encrypted information is
`derived from Vrotsos’s magstripe reader 23.” (POR, p. 43)
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`43
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`IPR2019-01652 Exhibit 2015 Page 43
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
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`44
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`Ex. 1001, p 15
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`IPR2019-01652 Exhibit 2015 Page 44
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
`• “Bear does not disclose the claimed remote transaction server for processing a commercial
`transaction because [Bear] makes clear that server 106 is not intended to process a commercial
`transaction at all, but rather is intended to authenticate or authorize some other external device
`to process a commercial transaction.” (POR, p. 44)
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`45
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`Ex. 1007, Fig. 3
`(POR, p. 45)
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`IPR2019-01652 Exhibit 2015 Page 45
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`
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`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
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`46
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`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1007, p. 9, ¶41, (quoted at POR, p. 44)
`IPR2019-01652 Exhibit 2015 Page 46
`
`
`
`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
`• Bear’s “Server 106” as either an “IVR or Human Service Provider”
`(Ex. 1007, p. 3,Fig. 3, (POR, p. 45)
`
`47
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 47
`
`
`
`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
`• “Bear’s ‘IVR or Human Service Provider’ does not process[] a
`commercial transaction. Rather, the IVR/human is used to
`authenticate and/or authorize the user to communicate with another
`unspecified ‘external device’ to perform a requested action.” (POSR, p. 22)
`
`• “Bear’s server 106 never interacts with any device to process a
`commercial transaction. It merely communicates information back to
`the mobile phone to ‘authorize the cellular phone’ to request the
`transaction.” (POSR, p. 23)
`
`48
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
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`IPR2019-01652 Exhibit 2015 Page 48
`
`
`
`Ground 2: Bear + Vrotsos (Claims 3, 6)
`receiving transaction validation information from said remote transaction server
`
`49
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1001, p. 15
`
`Ex. 1001, p. 16
`IPR2019-01652 Exhibit 2015 Page 49
`
`
`
`Ground 2: Bear + Vrotsos (Claims 3, 6)
`receiving transaction validation information from said remote transaction server
`• “[T]he ‘239 patent … calls for the mobile communication device to
`receive transaction validation directly from a remote server—not to
`seek authorization from a human or IVR unit for the mobile phone to
`communicate with a separate external device.” (POR, p. 47)
`• “As stated above in Bear ¶41, the action could take place on the local
`device (to provide the requested access) or on some unnamed
`external device (to perform a requested/authorized action). The
`receiving of this authorization would not constitute the generation of
`transaction validation information, as the transaction access has not
`yet been granted nor has the requested action been performed.” (POR,
`p. 47)
`
`50
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 50
`
`
`
`Ground 2: Bear + Vrotsos (Claims 3, 6)
`receiving transaction validation information from said remote transaction server
`• “Bear’s action taken by the IVR or human operator, with a reference
`to a separate external device, is clearly different than what is claimed
`in the ‘239 patent, with the mobile device communicating directly
`with the remote transaction server to complete and validate the
`commercial transaction.” (POR, p. 47)
`• “[W]hether Bear’s server is human or machine, it does not provide
`transaction validation information because the server has still done
`nothing other than authorize the user to take the next steps to
`com[plete a transaction that has not yet occurred.” (POSR, p. 24)
`
`51
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 51
`
`
`
`Ground 2: Bear + Vrotsos
`No motivation to combine Bear and Vrotsos
`• Petitioner: “[U]sing a smartcard read/write head was known to read recorded
`information stored on said integrated circuit incorporated into said card. Thus,
`a POSITA applying Vrotsos’s teaching to Bear would have expected to yield the
`predictable result of success. Specifically, applying a smartcard read/write
`head to Bear’s smart card reader 64 would have enabled the smart card
`reader 64 to read the data encoded by the smartcard’s memory chip.” (Petition, p.
`51)
`• “In many ways, this argument exemplifies Petitioner’s approach to finding a
`motivation to combine. The Petition starts with a dubious premise (that
`Vrotsos’s read/write head “was known” to read an integrated circuit). From
`there, it proceeds to assume motivation and the successful combinability of
`the prior art (i.e., applying Vrotsos to Bear “would have expected to yield the
`predictable result of success”).” (POR, p. 49)
`
`52
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 52
`
`
`
`Ground 2: Bear + Vrotsos
`No motivation to combine Bear and Vrotsos
`
`• “[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.”) See, e.g., TQ Delta, LLC v. CISCO Sys., Inc., 942 F.3d
`1352, 1359 (Fed. Cir. 2019). (POR, p. 3)
`
`53
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 53
`
`
`
`Ground 3
`
`Claims 1-6 – Vrotsos under 35 U.S.C. §103(a)
`
`54
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 54
`
`
`
`Ground 3: Vrotsos – single reference
`
`•Arendi v. Apple, 832 F.3d 1355 (Fed. Cir. 2016)
`• “[C]onclusory statements and unspecific expert
`testimony” is insufficient in reaching a motivation
`to modify.
`• Must still be supported by evidence and reasoned
`explanation
`
`55
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`POR, p. 51-52
`
`IPR2019-01652 Exhibit 2015 Page 55
`
`
`
`Ground 3: Vrotsos – single reference
`• Vrotsos fails to disclose:
`• (1) the claimed sensor for reading a smart card containing an
`integrated circuit
`• (2) a controller for converting information from an integrated
`circuit into an encrypted signal suitable for transmission to a
`mobile communication device
`• (3) transmitting a signal containing encrypted information from an
`integrated circuit
`• (4) the further processing of card information by a mobile
`communication device.
`
`56
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 56
`
`
`
`Ground 3: Vrotsos – single reference
`
`57
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 2004, ¶180
`(POR, p. 56)
`
`IPR2019-01652 Exhibit 2015 Page 57
`
`
`
`IPR2019-01652
`
`U.S. Patent No. 9,613,351
`
`• Ground 1:
`• Claims 1-10 - Valliani in view of Vrotsos under 35 U.S.C. §103(a)
`• Ground 2:
`• Claims 1-6 - Bear in view of Lahteenmaki under 35 U.S.C. §103(a)
`• Ground 3:
`• Claims 4-10 - Bear in view of Lahteenmaki and Vrotsos under 35 U.S.C.
`§103(a)
`• Ground 4:
`• Claims 1-10 - Vrotsos under 35 U.S.C. §103(a)
`
`58
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 58
`
`
`
`The ‘351 Patent
`
`59
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652
`Ex. 1001
`
`IPR2019-01652 Exhibit 2015 Page 59
`
`
`
`Ground 2
`
`Claims 1-6 - Bear in view of Lahteenmaki under
`35 U.S.C. §103(a)
`
`60
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 60
`
`
`
`Ground 2: Bear + Lahteenmaki (Claims 1-6)
`
`61
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`POSR, p. 13-14
`
`IPR2019-01652 Exhibit 2015 Page 61
`
`
`
`Ground 2: Bear + Lahteenmaki (Claims 1-6)
`“Controller”
`• “The ‘351 claims . . . the controller to control the flow of operations
`and perform advanced processing including receiving information
`from the payment device via the sensor, interpreting and processing
`that information as digital payment information, and finally
`converting that information into a format suitable for transmission to
`a mobile communication device. See, e.g., Ex. 1001, 9:10-13. (POR, p. 35)
`• “The limited functionality of controller 52 is exactly why Petitioner—
`particularly where claims call for encryption—has consistently flip-
`flopped in allocating controller functionality between Bear’s SIM chip
`and controller 52.” (POSR, p. 15)
`
`62
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 62
`
`
`
`Ground 2: Bear + Lahteenmaki (Claims 1-6)
`“Controller”
`
`Ex. 1007, p. 8, ¶33
`(POR, p. 35)
`
`63
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 63
`
`
`
`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
`• “Petitioner relies on server 106. Petition, 64-65. Server 106, however, is intended to authenticate
`or authorize a user to then interact with “another external device and perform a
`requested/authorized action.” Id., ¶41 (emphasis added). . . . As shown, Bear’s “Server 106,” as
`either an “IVR or Human Service Provider,” neither of which is compatible with the ‘351 patent
`claims. An IVR (Interactive Voice Response) unit can, at most, be used to authenticate and/or
`authorize the user to communicate with another unspecified “external device” to perform a
`requested action. Ex. 2004, ¶¶123-124. (POR, pp. 37-38)
`
`64
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`Ex. 1007, p. 3, Fig. 3
`
`IPR2019-01652 Exhibit 2015 Page 64
`
`
`
`Ground 2: Bear + Vrotsos (Claims 1-6)
`remote transaction server for processing a commercial transaction
`
`65
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`POSR, p. 18
`
`IPR2019-01652 Exhibit 2015 Page 65
`
`
`
`Ground 2: No motivation to combine Bear and
`Lahteenmaki
`• Petition arguments on motivation to combine highlight the
`deficiencies in Bear (POR, pp. 45-46; POSR, pp. 20-21)
`• Petitioner’s argument is “about a smart card; not an argument about
`a multi-component payment device that can read a smart card. …
`There is nothing in that argument supporting the combination … .”
`(POSR, p. 21)
`• See Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342,
`1369 (Fed. Cir. 2012) (“Because each device 22 independently
`operates effectively, a [POSITA] … would have no reason to combine
`the features of both devices into a single device.”). (POSR, pp. 21-22, 24-25)
`
`66
`
`DEMONSTRATIVE EXHIBIT - NOT EVIDENCE
`
`IPR2019-01652 Exhibit 2015 Page 66
`
`
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