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`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`———————
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`———————
`
`GOOGLE LLC.,
`Petitioner
`
`v.
`
`RFCyber Corp.
`
`U.S. Patent No. 8,118,218
`
`IPR2021-00957
`
`
`———————
`
`
`
`PETITION FOR INTER PARTES REVIEW
`UNDER 35 U.S.C. § 312 AND 37 C.F.R. § 42.104
`
`
`
`
`
`

`

`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`TABLE OF CONTENTS
`
`INTRODUCTION ........................................................................................... 8
`
`
`
`I.
`
`II. MANDATORY NOTICES ............................................................................. 8
`
`A.
`
`B.
`
`C.
`
`Real Party-in-Interest ........................................................................... 8
`
`Related Matters ..................................................................................... 8
`
`Lead and Back-up Counsel and Service Information .......................... 9
`
`III. GROUNDS FOR STANDING ......................................................................10
`
`IV. BACKGROUND ON MOBILE DEVICES AND SMART CARDS ...........10
`
`V.
`
`THE ’218 PATENT .......................................................................................10
`
`A.
`
`B.
`
`Summary of the ’218 Patent ............................................................... 10
`
`Prosecution History of the ’218 Patent .............................................. 12
`
`VI. LEVEL OF ORDINARY SKILL IN THE ART ...........................................12
`
`VII. CLAIM CONSTRUCTION ..........................................................................13
`
`A.
`
`“emulator” .......................................................................................... 13
`
`VIII. RELIEF REQUESTED AND THE REASONS FOR THE
`REQUESTED RELIEF .................................................................................14
`
`IX.
`
`IDENTIFICATION OF GROUNDS .............................................................14
`
`X.
`
`THE BOARD SHOULD INSTITUTE INTER PARTES REVIEW ............14
`
`A.
`
`The challenges presented in this petition are not cumulative to
`prosecution of the ’218 Patent ............................................................ 14
`
`B.
`
`The Fintiv factors favor institution .................................................... 15
`
`1.
`
`Factor 1 is neutral (Possibility of a Stay). ................................ 15
`
`2
`
`

`

`
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`Factor 2 is neutral (proximity of trial date to final
`written decision). ...................................................................... 16
`
`Factor 3 favors institution (investment in parallel
`proceeding). .............................................................................. 17
`
`Factor 4 favors institution (overlap in issues). ......................... 19
`
`Factor 5 is neutral (overlap in parties). .................................... 19
`
`Factor 6 favors institution (other circumstances). ................... 19
`
`XI.
`
`IDENTIFICATION OF HOW THE CLAIMS ARE UNPATENTABLE ....20
`
`A. Ground 1: Claims 1-18 are obvious over Staib and Chan. ................ 20
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`7.
`
`8.
`
`9.
`
`Summary of Staib..................................................................... 20
`
`Summary of Chan .................................................................... 21
`
`Reasons to Combine Staib and Chan ....................................... 24
`
`Claim 1 ..................................................................................... 28
`
`Claim 2 ..................................................................................... 47
`
`Claim 3 ..................................................................................... 49
`
`Claim 4 ..................................................................................... 53
`
`Claim 5 ..................................................................................... 55
`
`Claim 6 ..................................................................................... 57
`
`10. Claim 7 ..................................................................................... 58
`
`11. Claim 8 ..................................................................................... 64
`
`12. Claim 9 ..................................................................................... 66
`
`13. Claim 10 ................................................................................... 66
`
`3
`
`

`

`
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`14. Claim 11 ................................................................................... 68
`
`15. Claim 12 ................................................................................... 73
`
`16. Claim 13 ................................................................................... 73
`
`17. Claim 14 ................................................................................... 74
`
`18. Claim 15 ................................................................................... 74
`
`19. Claim 16 ................................................................................... 75
`
`20. Claim 17 ................................................................................... 75
`
`21. Claim 18 ................................................................................... 75
`
`XII. CONCLUSION ..............................................................................................76
`
`CERTIFICATE OF WORD COUNT ......................................................................77
`
`CERTIFICATE OF SERVICE ................................................................................78
`
`4
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`

`

`
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`Petitioner’s Exhibit List
`
`GOOG-1001 U.S. Patent No. 8,118,218
`GOOG-1002 Prosecution History of U.S. Patent No. 8,118,218
`
`GOOG-1003 Declaration of Stephen Gray under 37 C.F.R. § 1.68
`
`GOOG-1004 Curriculum Vitae of Stephen Gray
`GOOG-1005 U.S. Patent Pub. No. 2005/0222961 by Staib et al. (“Staib”)
`
`GOOG-1006 U.S. Patent No. 7,628,322 to Holtmanns et al. (“Holtmanns”)
`
`GOOG-1007 U.S. Patent No. 6,481,632 to Wentker et al. (“Wentker”)
`GOOG-1008 U.S. Patent No. 6,005,942 to Chan et al. (“Chan”)
`
`GOOG-1009 U.S. Patent No. 7,699,233 to Pesonen (“Pesonen”)
`
`GOOG-1010 U.S. Patent No. 6,367,011 to Lee et al. (“Lee”)
`GOOG-1011 Wolfgang Rankl & Wolfgang Effing, Smart Card Handbook
`(Kenneth Cox trans., John Wiley & Sons Ltd., 3d ed. 2002)
`(“Smart Card Handbook”)
`GOOG-1012 Complaint for Patent Infringement, RFCyber Corp. v. Google
`LLC et al., 2:20-cv-00274 (E.D. Tex. Aug. 21, 2020)
`GOOG-1013 Affidavits of Service in RFCyber Corp. v. Google LLC et al.,
`2:20-cv-00274 (E.D. Tex.)
`GOOG-1014 Sample Docket Control Order
`GOOG-1015 Email from RFCyber’s attorney requesting an extension of the due
`date for infringement contentions
`GOOG-1016 Motion for extension of deadlines filed in the district court case on
`April 27, 2021
`Junko Yoshida, “Chip Makers Still Uncertain of Plunge into
`NFC,” Electronic Engineering Times 6 (Nov. 15, 2004)
`
`GOOG-1017
`
`5
`
`

`

`
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`GOOG-1018 Philips Semiconductors, Functional Specification: Standard Card
`IC MF1 IC S70, Revision 3.1 (Oct. 2002) (describing MIFARE
`1K smart card)
`GOOG-1019 Eric Longo & Jeff Stapleton, PKI Note: Smart Cards, PKI Forum
`Newsletter, Apr. 6, 2002
`GOOG-1020 Marijke Sas, “Mifare in Action,” Card Technology Today, Mar.
`2003, p. 10
`GOOG-1021 U.S. Patent No. 7,350,717 to Conner et al. (“Conner”)
`GOOG-1022 Philips Semiconductor, SmartMX: P5CD036: Secure Dual
`Interface PKI Smart Card Controller Revision 1.1, Aug. 27, 2004
`GOOG-1023 Press Release, GlobalPlatform Leads the Way to Cross-Industry
`Standardization with Open Platform Version 2.1 (May 16, 2001),
`at https://globalplatform.org/latest-news/globalplatform-leads-the-
`way-to-cross-industry-standardization-with-open-platform-
`version-2-1/ (last visited Mar. 24, 2021) (“Press Release,
`GlobalPlatform”)
`GOOG-1024 GlobalPlatform, Card Specification Version 2.1.1 (Mar. 2003)
`GOOG-1025 GlobalPlatform, Guide to Common Personalization Version 1.0
`(Mar. 2003)
`GOOG-1026 Smart Card Alliance, Near Field Communication (NFC) and
`Transit: Applications, Technology and Implementation
`Considerations (Feb. 2012) (“Smart Card Alliance”)
`GOOG-1027 GlobalPlatform, Concise Guide to Worldwide Implementations of
`GlobalPlatform Technology (Feb. 4, 2006) (“GlobalPlatform
`Implementation Overview”)
`GOOG-1028 Yukari Iwatani Kane, “DoCoMo Launches Phones that Could
`Replace Wallets,” Reuters (June 16, 2004)
`GOOG-1029 Yukari Iwatani Kane, “DoCoMo Mobile Phones to Double as
`Train Pass,” Reuters (Feb. 22, 2005)
`GOOG-1030 “JR East to Expand Functions of Mobile Suica Service,” Japan
`Econ. Newswire Plus (Sept. 5, 2006)
`
`6
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`

`

`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`GOOG-1031 Press Release, PR Newswire Europe, Nokia Ventures
`Organization, Nokia Announces the World's First NFC Enabled
`Mobile Product for Contactless Payment and Ticketing (Feb. 9,
`2005)
`GOOG-1032 Ummear Ahmad Khan, Contactless Payment with Near Field
`Communication: An Empirical Study in Ubiquitous Computing
`Context (May 2, 2006) (Master thesis, University of OSLO, Dept.
`of Informatics)
`GOOG-1033 Press Release, Business Wire, Royal Philips Electronics,
`Technology Simplifies Travel for Consumers (Apr. 19, 2006)
`
`
`
`
`
`
`7
`
`

`

`
`I.
`
`INTRODUCTION
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`Pursuant to 35 U.S.C. §§ 311, 314(a), and 37 C.F.R. § 42.100, Petitioner
`
`Google LLC respectfully requests that the Board review and cancel claims 1-18
`
`(hereinafter, the “Challenged Claims”) of U.S. Patent No. 8,118,218 (the “’218
`
`Patent,” GOOG-1001) as unpatentable under (pre-AIA) 35 U.S.C. §103(a).
`
`II. MANDATORY NOTICES
`A. Real Party-in-Interest
`
`The real parties-in-interest are Google LLC1 and Google Payment Corp.
`
`B. Related Matters
`
`Pursuant to 37 C.F.R. § 42.8(b)(2), to the best knowledge of the Petitioner,
`
`the ’218 Patent is involved in the following cases:
`
`Case Heading
`
`Number
`
`Court
`
`Filed
`
`RFCyber Corp. v. Google LLC et al.
`
`2:20-cv-00274 EDTX Aug. 21, 2020
`
`RFCyber Corp. v. LG Electronics, Inc. 2:20-cv-00336 EDTX Oct. 16, 2020
`
`RFCyber Corp. v. Samsung
`Electronics Co., Ltd. et al.
`
`2:20-cv-00335 EDTX Oct. 16, 2020
`
`
`
`1 Google LLC is a subsidiary of XXVI Holdings Inc., which is a subsidiary of
`
`Alphabet Inc. XXVI Holdings Inc. and Alphabet Inc. are not real parties-in-interest
`
`to this proceeding.
`
`8
`
`

`

`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`The parties are also involved in the following cases related to patents in the
`
`
`
`same family as the ’218 Patent:
`
`Case Heading
`Google LLC v. RFCyber Corp.
`
`Number
`IPR2021-00028
`
`Google LLC v. RFCyber Corp.
`
`IPR2021-00029
`
`Court
`PTAB
`
`PTAB
`
`Filed
`Dec. 23, 2020
`
`Dec. 23, 2020
`
`Google LLC v. RFCyber Corp.
`
`IPR2021-00954
`
`PTAB May 19, 2021
`
`Google LLC v. RFCyber Corp.
`
`IPR2021-00955
`
`PTAB May 19, 2021
`
`Google LLC v. RFCyber Corp.
`
`IPR2021-00956
`
`PTAB May 19, 2021
`
`
`
`C. Lead and Back-up Counsel and Service Information
`
`
`Phone: (214) 651-5116
`Fax: (214) 200-0853
`andy.ehmke.ipr@haynesboone.com
`USPTO Reg. No. 50,271
`
`
`Phone: (972) 739-8611
`Fax: (214) 200-0853
`michael.parsons.ipr@haynesboone.com
`USPTO Reg. No. 58,767
`
`Lead Counsel
`Andrew S. Ehmke
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`
`Back-up Counsel
`Michael S. Parsons
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`
`Vinu Raj
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`
`
`Phone: (713) 547-2060
`Fax: (214) 200-0853
`vinu.raj.irp@haynesboone.com
`USPTO Reg. No. 59,327
`
`Please address all correspondence to lead and back-up counsel. Petitioner
`
`consents to service in this proceeding by email at the addresses above.
`
`9
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`

`

`
`III. GROUNDS FOR STANDING
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`Petitioner certifies that the ’218 Patent is eligible for IPR and Petitioner is
`
`not barred or estopped from requesting IPR challenging the claims. 37 C.F.R. §
`
`42.104(a).
`
`IV. BACKGROUND ON MOBILE DEVICES AND SMART CARDS
`
`A background on smart card technology in mobile devices is provided in
`
`Section V of Exhibit 1003 submitted herewith.
`
`V. THE ’218 PATENT2
`Summary of the ’218 Patent
`A.
`
`The ’218 Patent describes portable devices “functioning as an electronic
`
`purse (e-purse) … to conduct transactions over an open network with a payment
`
`server without compromising security.” GOOG-1001, 1:34-38. Fig. 2 (below)
`
`shows an example system including a portable device (a cell phone 202) with a
`
`smart card module, one or more payment network and servers 210, and a security
`
`authentication module (SAM) 212. Id., 5:5-29.
`
`
`2 Unless otherwise specified, all emphasis below is added.
`
`10
`
`

`

`
`
`payment network
`and servers
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`SAM module
`
`portable device
`
`midlet
`
`emulator
`
`e-purse applet
`
`GOOG-1003, ¶68; GOOG-1001, Fig. 2 (annotated)
`
`
`
`The smart card module in cell phone 202 is preloaded with an emulator, e.g.,
`
`“a Mifare emulator 208 (which is a single functional card) for storing values.”
`
`GOOG-1001, 4:57-64. A purse manager midlet 204 in the phone is an executable
`
`“software component” or “application” that facilitates communications (for
`
`transactions) between an e-purse applet 206 and the payment network and server(s)
`
`210. Id., 5:11-16.
`
`A default security domain in the smart card establishes a security channel for
`
`personalizing the e-purse applet (downloaded from the payment server). Id., 6:48-
`
`11
`
`

`

`
`65, 8:46-49. A subsequent security channel is then established between the SAM
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
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`and the e-purse applet for subsequent data access authentication and operation of
`
`the emulator. Id., 6:66-7:5, 8:63-67.
`
`B.
`
`Prosecution History of the ’218 Patent
`
`The ’218 Patent issued on February 21, 2012 from U.S. Patent Application
`
`No. 11/534,653 (“the ’653 application”) filed on September 24, 2006. See GOOG-
`
`1001. During prosecution, the Examiner rejected the pending claims of the ’653
`
`application over various prior art references that do not include the prior art
`
`analyzed against the claims below. GOOG-1002, pp. 185-192, 140-150, 46-61.
`
`After several rejections and amendments, the Examiner issued a notice of
`
`allowance based on the amendment including “an emulator configured to execute a
`
`request from an e-purse applet and provide a response the e-purse applet is
`
`configured to expect” and “wherein the e-purse applet is downloaded and installed
`
`in the smart card when the smart card is in communication with the payment
`
`server.” Id., pp. 9-18, 28-32.
`
`VI. LEVEL OF ORDINARY SKILL IN THE ART
`
`A POSITA on and before September 24, 2006 would have had a working
`
`knowledge of mobile payment techniques pertinent to the ’218 Patent, including
`
`art describing mobile payment techniques. A POSITA would have had a bachelor’s
`
`degree in computer science, computer engineering, or an equivalent, and one year
`
`12
`
`

`

`
`of professional experience relating to mobile payments. Lack of professional
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`experience can be remedied by additional education, and vice versa. GOOG-1003,
`
`¶¶16-19.
`
`VII. CLAIM CONSTRUCTION
`
`In an IPR, claims are construed “in accordance with the ordinary and
`
`customary meaning of such claim as understood by one of ordinary skill in the art
`
`and the prosecution history pertaining to the patent.” 37 C.F.R. § 42.100(b). The
`
`Board only construes the claims to the extent necessary to resolve the underlying
`
`controversy. See Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868
`
`F.3d 1013, 1017 (Fed. Cir. 2017). All terms except for those discussed below
`
`should have their plain and ordinary meaning.
`
`A.
`
`“emulator”
`
`The ’218 Patent provides the following definition of an emulator:
`
`As used herein, an emulator means a hardware device or a program
`that pretends to be another particular device or program that other
`components expect to interact with.
`GOOG-1001, 4:36-39
`Because the specification provides a specific meaning and use for this term,
`
`a POSITA would have adopted this meaning and use for the purposes of defining
`
`the scope of the claims. GOOG-1003, ¶81. Accordingly, a POSITA would have
`
`understood the term “emulator” in the ’218 Patent to mean “a hardware device or
`
`13
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`

`

`
`a program providing security that pretends to be another particular device or
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
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`program that other components expect to interact with.” Id.
`
`VIII. RELIEF REQUESTED AND THE REASONS FOR THE
`REQUESTED RELIEF
`
`Petitioner asks that the Board institute a trial and cancel the challenged
`
`claims as unpatentable in view of the analysis below.
`
`IX.
`
`IDENTIFICATION OF GROUNDS
`
`The patentability of claims 1-18 is challenged as follows:
`
`No.
`#1
`
`Ground
`Claims 1-18 are obvious under 35 U.S.C. § 103 over Staib in view
`of Chan.
`
`U.S. Publication No. 2005/0222961 to Staib et al. (“Staib” or “GOOG-
`
`1005”) was filed on September 14, 2004, and published on October 6, 2005, and is
`
`prior art under 35 U.S.C. § 102(a) and (e).
`
`U.S. Patent No. 6,005,942 to Chan et al. (“Chan” or “GOOG-1008”) issued
`
`on December 21, 1999, and is prior art under 35 U.S.C. § 102(b).
`
`X. THE BOARD SHOULD INSTITUTE INTER PARTES REVIEW
`
`A. The challenges presented in this petition are not cumulative to
`prosecution of the ’218 Patent
`
`The Board should not deny institution under § 325(d). None of the prior art
`
`asserted in the grounds was presented to or considered by the Examiner during
`
`14
`
`

`

`
`prosecution. Under the first part of the Advanced Bionics framework, the Board
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`should not deny institution. IPR2019-01469, Paper 6 at 8-9 (PTAB Feb. 13, 2020)
`
`(precedential).
`
`B.
`
`The Fintiv factors favor institution
`
`The ’218 Patent is asserted against Petitioner in the Eastern District of
`
`Texas. See GOOG-1012; GOOG-1013. In such cases, the Board balances six
`
`factors deciding discretionary denial under § 314(a). Apple Inc. v. Fintiv, Inc.,
`
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential). These factors
`
`discourage discretionary denial here.
`
`1.
`
`Factor 1 is neutral (Possibility of a Stay).
`
`A stay pending the outcome of this IPR in the co-pending district court
`
`litigation has not been requested. Given that a motion to stay has not yet been filed,
`
`the Board should not infer the outcome of that motion. See Dish Network L.L.C. v.
`
`Broadband iTV, Inc., IPR2020-01359, Paper 15 at 11 (PTAB Feb. 12, 2021) (“It
`
`would be improper to speculate … what the Texas court might do regarding a
`
`motion to stay,” when a stay had not yet been requested).
`
`Without “specific evidence” of how the court would rule on any stay motion,
`
`this factor is neutral. Sand Revolution II, LLC v. Cont’l Intermodal Grp.–Trucking
`
`LLC, IPR2019-01393, Paper 24 at 7 (PTAB June 16, 2020) (informative).
`
`15
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`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`2.
`
`Factor 2 is neutral (proximity of trial date to final written
`decision).
`
`On May 12, 2021, the district court held a scheduling conference and
`
`scheduled trial for March 21, 2022. GOOG-1014, p.1. While the final written
`
`decision here would issue approximately nine months after, this period alone does
`
`not warrant discretionary denial. See Hulu, LLC v. SITO Mobile R&D IP, LLC,
`
`IPR2021-00206, Paper 11 at 10-11 (PTAB May 10, 2021) (trial date scheduled
`
`months before the Board issues final written decision weighs only “marginally in
`
`favor of exercising [] discretion to deny institution.”).
`
`This factor is outweighed by other factors identified below, including delays
`
`by Patent Owner at the district court, minimal investment in the court’s trial, and
`
`petitioner’s diligence in filing the Petition. See PEAG LLC v. Varta Microbattery
`
`GmbH, IPR2020-01214, Paper 8 at 15-18 (PTAB Jan. 6, 2021) (district court trial
`
`seven months before final written decision outweighed by minimal investment in
`
`district court trial and diligence in filing petition). And, the Federal Circuit
`
`cautions of error in “relying too heavily on the scheduled trial date” because
`
`“scheduled trial dates are often subject to change.” In re Apple Inc., 979 F.3d 1332,
`
`1344 & n.5 (Fed. Cir. 2020). Given that the time for filing motions challenging
`
`venue or requesting stays has not yet expired, many factors may still impact the
`
`scheduled trial date.
`
`16
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`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`3.
`
`Factor 3 favors institution (investment in parallel
`proceeding).
`
`This factor, which focuses on work completed “at the time of the institution
`
`decision,” strongly favors institution. Fintiv, IPR2020-00019, Paper 11, 9–10. This
`
`factor is not about the total investment by the court and parties, but the investment
`
`“in the merits of the invalidity positions.” Sand Revolution, IPR2019-01393, Paper
`
`24 at 10 (emphasis added). As of the filing of this Petition, Petitioner cannot
`
`speculate as to the extent of the investment in the invalidity positions when the
`
`institution decision issues (approximately December 2021).
`
`On the current timeline at the district court, fact and expert discovery will
`
`have likely closed at the time of institution. However, delays have already
`
`occurred to the invalidity discovery. For instance, at Patent Owner’s request, the
`
`deadline for serving infringement contentions was delayed until May 12, 2021,
`
`resulting in subsequent delays. See GOOG-1015, GOOG-1016. Because Petitioner
`
`has only recently received Patent Owner’s infringement contentions, it is
`
`continuing to prepare its invalidity contentions for service before July 14, 2021.
`
`See GOOG-1016. Petitioner is nevertheless willing to meet and confer with Patent
`
`Owner regarding an appropriate stipulation to avoid overlapping positions once its
`
`invalidity contentions have been served. See PEAG, IPR2020-01214, Paper 8 at 17
`
`17
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`

`
`(minimal investment in the invalidity positions in the Petition weighs against
`
`IPR2021-00957 Petition
`Inter Partes Review of U.S. Patent 8,118,218
`
`discretionary denial).
`
`Moreover, the parties have not filed dispositive motions on obviousness
`
`issues, and as such, there will be no district court orders related that overlap issues
`
`here. GOOG-1014, pp.2-3. Thus, when the Board issues its institution decision,
`
`there will not have been any dispositive orders related to the validity of the patent.
`
`See Verizon Bus. Network Servs. Inc. v. Huawei Techs. Co. Ltd., IPR2020-01080,
`
`Paper 11 at 13-14 (Jan. 14, 2021) (finding “minimal” investment when parties had
`
`not submitted dispositive briefing on validity issues); Fintiv, IPR2020-00019,
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`Paper 11 at 10 (“If, at the time of the institution decision, the district court has not
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`issued orders related to the patent…, this fact weighs against exercising discretion
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`to deny institution.”).
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`Further, Petitioner acted diligently in filing the Petition within a week after
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`being served with preliminary infringement contentions on May 12, 2021.
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`Petitioner’s diligence thus weighs in favor of institution. See, e.g., Hulu, LLC v.
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`SITO Mobile R&D IP, LLP, IPR2021-00206, Paper 11 at 12 (PTAB May 10, 2021)
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`(diligence in filing two months after receiving preliminary infringement
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`contentions favors institution).
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`Inter Partes Review of U.S. Patent 8,118,218
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`4.
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`Factor 4 favors institution (overlap in issues).
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`Because invalidity discovery is at an early stage as of the filing of this
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`Petition, Petitioner does not yet know which invalidity positions it will take as the
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`district court. However, as the facts and positions of the parties develop during
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`fact discovery at the district court, Petitioner is willing to meet and confer with
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`Patent Owner regarding an appropriate stipulation to avoid overlapping positions
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`once its invalidity contentions have been served. See PEAG, IPR2020-01214,
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`Paper 8 at 17 (minimal investment weighs against discretionary denial); see also
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`IPR2019-01393, Paper 24 at 12 (petitioner’s stipulation to not pursue the same
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`grounds in district court mitigates “concerns of potentially conflicting decisions.”);
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`see also NanoCellect Biomedical, Inc. v. Cytonome/ST, LLC, IPR2020-00551,
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`Paper 19 at 23 (PTAB Aug. 27, 2020) (petitioner’s stipulation to not pursue the
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`same grounds in district court resulted in “no overlap” between the IPR and district
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`court proceeding).
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`5.
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`Factor 5 is neutral (overlap in parties).
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`Petitioner is a defendant in the litigation. This factor is neutral due to the
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`lack of overlap between this proceeding and the district court litigation.
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`6.
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`Factor 6 favors institution (other circumstances).
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`The grounds of unpatentability presented in the Petition are strong, which
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`favors institution. See Fintiv, IPR2020-00019, Paper 11 at 14-15 (“[I]f the merits
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`of a ground raised in the petition seem particularly strong on the preliminary
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`record, this fact has favored institution.”).
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`XI.
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`IDENTIFICATION OF HOW THE CLAIMS ARE UNPATENTABLE
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`A. Ground 1: Claims 1-18 are obvious over Staib and Chan.
`Summary of Staib
`1.
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`Staib relates to an electronic payment system for portable devices that act as
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`smart cards. GOOG-1005, ¶2. Staib describes “facilitating contactless payment
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`transactions across different contactless payment systems using a common mobile
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`device that acts as a stored value device.” Id., Abstract. In Staib, “a mobile
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`application and a communication module allows the mobile device … to emulate
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`various transmission standards and data exchange formats that are used in different
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`payment systems in order to perform contactless payment transactions with
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`merchants” associated with those payment systems. Id.
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`Staib’s mobile device includes a memory unit and an NFC module
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`connected to an external security module (e.g., a Universal Subscriber Identity
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`Module or USIM, which is a well-known type of smart card3) with a secured
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`3 See, e.g., GOOG-1006, 7:23-28 (“The secure storage entity of the UE may be
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`provided by an appropriate security module or identification module, such as a
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`Subscriber Identity Module (SIM) or a Universal Integrated Circuit Card (UICC)
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`memory area storing a stored value (i.e., digital cash). Id., ¶38. A mobile
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`application on the device allows it to perform contactless payment transactions
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`using the stored value. Id., ¶¶22, 38, 52. The stored value in the security module
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`allows the device to function as an electronic purse that can be charged or
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`recharged via a secure Internet connection using funds from a user’s bank account.
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`Id., ¶¶51, 89-95. The NFC module facilitates a contactless payment transaction by
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`enabling a wireless interface between the mobile device and a contactless merchant
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`terminal. Id., ¶¶40-41.
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`Staib thus shows that, before the earliest priority date of the ’218 Patent,
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`POSITAs were using mobile devices with smart cards to provide electronic purses
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`for conducting payment transactions.
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`2.
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`Summary of Chan
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`Chan teaches an open platform security architecture for “smart cards built to
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`the Java Card standard” that “facilitate[s] a post-issuance download of an application
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`onto the smart card.” GOOG-1008, 1:21-25, 4:50-54, 9:46-53. With reference to Fig.
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`2, Chan generally describes “an example of software layers which can be utilized in
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`a smart card” (Id., 4:36-37):
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`containing a SIM-like application, for example Universal SIM (USIM).”), 10:46-
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`54 (“a UICC or smart card”).
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`GOOG-1003, ¶87; GOOG-1008, Fig. 2
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`
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`To address problems associated with conventional smart card software
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`systems at the time, Chan discloses a security architecture for a smart card that
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`“allows for multiple applet owners to exist on [the] card via the use of Security
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`Domains,” as shown in Fig. 3B. GOOG-1008, 9:46-47.
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`GOOG-1003, ¶89; GOOG-1008, Fig. 3B (annotated)
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`“Security domains 310A-310B can assist in secure post issuance loading of
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`
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`an application onto the smart card [and] … provide for a mechanism which keeps
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`the application provider’s confidential information, such as cryptographic keys,
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`from being disclosed to the issuer of the smart card.” Id., 6:64-7:3. Furthermore,
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`“[e]ach security domain 310A-310B provides a command interface, such as an
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`Application Protocol Data Unit (APDU) interface 320A-320B, for communication
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`off card.” Id., 7:36-39. The APDU interface 320A, 320B includes “personalization
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`commands and is intended to allow the initial loading of security domain keys and
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`to support key rotation if desired during the life of the security domain.” Id., 7:40-
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`43.
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`Chan thus teaches that, before the earliest claimed priority date of the ’218
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`Patent, POSITAs knew how to personalize multiple applets in a smart card using
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`security domains for various providers.
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`3.
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`Reasons to Combine Staib and Chan
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`A POSITA would have been motivated to combine the teachings of Staib and
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`Chan. GOOG-1003, ¶91. At the time of the ’218 Patent, it would have been obvious
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`to combine Chan’s smart card security architecture for facilitating post-issuance
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`download of smart card applications, e.g., payment applications, for conducting
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`secure contactless transactions with the external security module (or smart card) in
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`Staib’s NFC-enabled mobile device. Id.
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`A POSITA considering Staib also would have considered the teachings of
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`Chan. Id., ¶92. Specifically, in describing the general features and functionality of
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`its “smart” mobile device, Staib omits details related to the secure module or smart
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`card in its mobile device. Id. Staib describes that its mobile device may be a mobile
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`telephone with an NFC module connected to an external security module that
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`“contain[s] its own processor and operating system” and that may be implemented
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`“in a separate hardware such as in a USIM (Universal Subscriber Identity Module)
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`(not shown) which is in communication with the NFC module.” GOOG-1005, ¶38.
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`However, Staib does not describe how the external security module operates, and
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`instead, simply states that it can “utilize the operating system of the mobile phone
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`… to create secure internet connections” with a service operator for transferring data
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`and downloading software applications. See id., ¶¶43-44, 51.
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`With this description, a POSITA would have considered other literature more
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`fully describing known smart card technologies for securely downloading
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`applications for use with a smart card and other data via the Internet. GOOG-1003,
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`¶95. Chan describes a known security architecture for a smart card that “allow[s]
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`card issuers to securely add applications during the lifetime of the card.” GOOG-
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`1008, Abstract.
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`A POSITA would have recognized that Chan’s security architecture can be
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`implemented Staib’s mobile device and external security module because Chan
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`explains that its architecture works with “any electronic device which can interface
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`with a smart card and connect to an appropriate network.” Id., 10:48-49.
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`A POSITA would have been specifically motivated to apply Chan’s teachings
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`regarding its smart card architecture to implement the security module in Staib’s
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`mobile device because doing so would provide enhanced functionality, such as a
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`IPR2021-00957 Petition