Paper No. 30
`
`Trials@uspto.gov
`571-272-7822
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`AIRE TECHNOLOGY LIMITED,
`Patent Owner.
`
`
`IPR2022-01137
`Patent 8,581,706 B2
`
`
`Held: October 2, 2023
`
`
`
`
`
`Before: MIRIAM L. QUINN, JEFFREY S. SMITH, and
`BRIAN J. McNAMARA, Administrative Patent Judges.
`
`
`
`
`
`
`
`
`

`

`IPR2022-01137
`Patent 8,581,706 B2
`
`
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`CALMANN J. CLEMENTS, ESQUIRE
`Haynes and Boone, LLP
`6000 Headquarters Drive, Suite 200
`Plano, TX 75024
`
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`ROBERT A. AUCHTER, ESQUIRE
`Auchter PLLC
`1999 K Street NW, Suite 600
`Washington, D.C. 20006
`
`ANTONIO PAPAGEORGIOU, ESQUIRE
`Lombard, Geliebter, & Cohen LLP
`230 Park Avenue, 4th Floor West
`New York, NY 10169
`
`
`The above-entitled matter came on for hearing on October 2, 2023,
`commencing at 2:05 p.m., via video teleconference.
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`IPR2022-01137
`Patent 8,581,706 B2
`
`
`P R O C E E D I N G S
`- - - - -
`JUDGE SMITH: So, this is IPR2022-01137, Apple vs. Aire
`Technology. Everybody is familiar with the drill by now. Let me just say
`that for this case, because there's a motion to amend, we've allocated 75
`minutes per side. And with that, Petitioner, will you state your appearance
`and the names of those who are here with you?
`MR. JARRATT: Thank you, Your Honor. This is Scott Jarratt
`with Haynes and Boone, lead counsel for Petitioner Apple. Also with us is
`Calmann Clements, also of Haynes and Boone. He will be presenting today.
`And also on the screen is Jamie Raju, also of Haynes and Boone.
`JUDGE SMITH: Okay. And, Petitioner, do you wish to reserve
`time for rebuttal?
`MR. CLEMENTS: Yes, Your Honor. I'll reserve 25 minutes.
`JUDGE SMITH: Okay. And Patent Owner can you do the same?
`State your appearance, and the names of those who are here with you?
`MR. AUCHTER: Yes, Your Honor. My name is Robert Auchter,
`A-U-C-H-T-E-R. With me also is Mr. Papageorgiou who will be arguing
`the motion to amend. I believe Mr. Petrsoric is here as well, but he will not
`be arguing at this hearing.
`JUDGE SMITH: Do you wish to reserve time for sur-rebuttal?
`MR. AUCHTER: Yes, Your Honor. We would like to divide our
`time between both the response Petition, and the motion to amend if we
`might. For the response to the Petition we would like to allocate 45 minutes.
`And for the response to the motion to amend -- for the motion to amend
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`IPR2022-01137
`Patent 8,581,706 B2
`rather, we would like to allocate 30 minutes. Within that subdivision, we
`would like to allocate 10 minutes for sur-rebuttal on the Petition.
`JUDGE SMITH: So I added the 75 minutes, 65 minutes will be
`for your case-in-chief, and 10 minutes will be for sur-rebuttal.
`MR. AUCHTER: I was actually thinking more of 45 minutes for
`the case in chief because I was separating out the motion to amend, Your
`Honor, as a separate discussion.
`JUDGE SMITH: So, I mean, 65 minutes total for your main
`presentation, including motion to amend. But let me rephrase it. For sur-
`rebuttal, you just want 10 minutes, is that right?
`MR. AUCHTER: For the case-in-chief in response to the Petition,
`yes, Your Honor. I'm not sure how much time Mr. Papageorgiou would like
`to have with respect to the motion to amend.
`JUDGE SMITH: Okay. I'm not subdividing the time the way -- I
`mean, if you want to subdivide the time among you and your co-counsel,
`that's fine. I'm just dividing it into your main presentation and your sur-
`rebuttal. So for your sur-rebuttal total of everything, how much do you and
`your co-counsel want total for everything?
`MR. AUCHTER: What would you like Mr. Papageorgiou?
`MR. PAPAGEORGIOU: Ten minutes is fine. So 20 minutes
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`total.
`
`JUDGE SMITH: Okay. Twenty minutes. Okay, so between the
`two of you, you'll have 55 minutes total between the two of you. You can
`split it however you want, but I'm, you know, again I'm just going to keep
`track of the time and then mention when your time has expired. I'm not
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`IPR2022-01137
`Patent 8,581,706 B2
`going to call out the time. During your presentation, I ask you to track your
`own time. So, Mr. Papageorgiou and Mr. Auchter, if you want to divide the
`time among yourselves, I ask the two of you to do that yourselves. I'll
`allocate 55 minutes for the two of you to make your case. So, Petitioner,
`you have 50 minutes to make your case, and you can begin when ready.
`MR. CLEMENTS: Thank you, Your Honors, and good afternoon.
`My name is Calmann Clements, representing Petitioner Apple. Let's start
`with slide 2 of Petitioner's demonstratives. So the '706 Patent describes and
`claims no more than the known concept of operating a smart card having
`multiple applications. And when the smart card, which is also referred to as
`a data carrier, comes into close proximity with a reader, the reader can
`interact with particular applications on that smart card. For example, an
`employee badge reader would interact with an employee badge application,
`or a credit card reader would interact with a credit card application. Now,
`the '706 Patent was allowed after the applicant added the concept of using
`application identifiers to the claims. And as I will discuss today, the prior
`art teaches that concept as well as the other concepts that are in the claims.
`Turning to slide 3, we will start our discussion of Ground 1, which
`relies on the combination of Guthery and Nozawa. Turning to slide 4,
`Independent Claims 1 to 11 are shown here, and the claims recite various
`concepts here. And shown in yellow is the concept that got the claims
`allowed, using identification numbers for communicating with multiple
`applications. The claims also relate to other known concepts such as
`communication readiness signals, as shown and highlighted in blue here, and
`then also storing a past selection history as highlighted in green.
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`IPR2022-01137
`Patent 8,581,706 B2
`But these concepts were already known when the '706 Patent was
`filed. Indeed, the background section of the '706 Patent indicates that many
`of these concepts were already known. It stated it was already known for a
`smart card to host multiple applications, and it was possible for a reading
`device to address those multiple applications. It was additionally made clear
`during prosecution that generating communication readiness signals was
`already taught in the prior art. And the Petition here relies on Guthery and
`Nozawa references, and as an example to show how these concepts were
`known. Guthery, for example, describes the concept of communication
`readiness signals as well as using application identifiers, and Nozawa
`describes the concept of recording a past selection history. So, turning to
`slide 5, Guthery teaches using application indices to identify specific
`applications. As such, Guthery teaches the claim limitations that got the
`claims allowed and Patent Owner does not dispute this limitation.
`Turning to slide 6, we turn to Guthery. So, this slide here shows
`figure 14A of Guthery, and we can see an example of how in Guthery, how
`communication occurs between the host and the reader. So, when the reader
`wishes to communicate with a particular application, it sends out a request to
`send packet, shown here in blue, and sends that to the smart card. And when
`the request to send packet identifies the application it wishes to
`communicate with. And then when the application is ready to receive
`communication from the reader, it then sends to the reader a permission to
`send packet shown here in red. So, because the permission to send packet
`indicates that the application is ready to receive communication, it is a
`communication readiness signal, as claimed.
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`IPR2022-01137
`Patent 8,581,706 B2
`Turning to slide 7, Guthery describes this process for different
`types of permission to send packets for different applications. For example,
`Guthery describes a first permission to send signal for application M,
`highlighted in purple there, and then a second permission to send packet for
`application N, highlighted in green there. Guthery thus teaches the claimed
`first and second communication readiness signals.
`Turning to slide 8, we move on to the Nozawa reference. So,
`Nozawa describes the concept of keeping a record of the last used
`application. And Nozawa explains that normally the reader has to send out
`an application selection command before the application responds. But
`Nozawa says to improve this, we're going to keep a record of applications
`that have been used in the past. And then that record can be used to predict
`the application that is most likely to be selected by the user. And this may
`be, for example, the most recently used application. And so our position is
`that a POSITA would have found it obvious for Guthery's smart card to
`similarly store a selection history as claimed.
`For example, in one particular implementation, Guthery's smart
`card would not wait to receive the request to send packet. Rather, it could
`begin preparing its buffers and send out the permission to send packet before
`waiting to receive that request to send packet because it can predict the
`application most likely to be used based on the application history stored on
`the card. And Patent Owner does not dispute that the prior art includes all
`the elements of the claims.
`Rather, Patent Owner disputes the reasons to combine the
`references. And so in disputing the reasons to combine, Patent Owner is not
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`IPR2022-01137
`Patent 8,581,706 B2
`necessarily attacking the benefits of Nozawa's technique, but Patent Owner
`is rather saying that there's alleged technical challenges here.
`So let's look at their argument. Turning to slide 9, Patent Owner
`argues that Guthery can't send a permission to packet if the smart card
`doesn't wait for the reader to send the request to send packet. This is
`because, as Patent Owner alleges, the request to send packet must include all
`this information that the smart card needs in order to generate the permission
`to send packet. They say that the request to send packet must include
`information such as the message size, type of data, or number of buffers
`required. But Patent Owner's argument does not address the teachings relied
`on in the Petition.
`Turning to slide 10, Guthery's request to send packet does not
`include the information Patent Owner says is required, as shown here in
`Figure 8. We can see here that the request to send packet does not include
`the information Patent Owner says is required. It does not include a
`message size or number of buffers required. It simply shows that it includes
`the application indices that identify the applications it wishes to
`communicate with. So, the portions of Guthery that the Patent Owner cites
`to are merely an alternative example, and not the teachings relied on in the
`Petition.
`Turning to slide 11, further to that, Guthery explains that the
`applications on its smart card already have the information that Patent
`Owner says would be unknown without the request to send packet. As
`shown in the highlighted text up top, each application is programmed to
`explicitly determine its own input, output, and temporary memory storage
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`IPR2022-01137
`Patent 8,581,706 B2
`requirements. And as shown in the bottom quote, an application may
`determine that it requires two buffers in order to perform its operation. So
`the applications already have this information. They don't need it from the
`request to send packet. So Guthery's system can still proceed to prepare the
`application and prepare the permission to send packet, and send that out
`without waiting to receive the request to send packet as proposed in the
`Petition.
`So turning to slide 12, we move on to Grounds 2 and 4 in which
`claims 16 and 20 are rendered obvious by the RFID handbook in addition to
`Guthery and Nozawa. Turning to slide 13, Claims 16 and 20 recite the
`concept of dividing memory into sectors, each sector corresponding to one
`application. And the claimed memory here is the memory where the
`applications are stored. And the Petition identified how Guthery describes
`how its smart cards use a non-volatile EEPROM memory to store the
`applications. And POSITAs would have found it obvious to look to known
`techniques for implementing such a memory. And an example of known
`techniques would be the RFID handbook.
`Turning to slide 14, the RFID handbook shows that it was known
`to segment non-volatile memory such as EEPROM into multiple sectors,
`each sector corresponding to different applications. Turning to slide 15, as
`explained in the Petition, it would have been obvious for Guthery's
`EEPROM to be similarly divided into segments, each segment
`corresponding to only one application to improve security, for example.
`And Patent Owner's response to this is that in Guthery, the RAM is
`not also segmented. But the Petition did not identify Guthery's RAM as the
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`IPR2022-01137
`Patent 8,581,706 B2
`claimed memory. The claimed memory is where the applications are stored
`and that's why we pointed to Guthery's EEPROM, non-volatile memory.
`And so Patent Owner's arguments related to the RAM are just a red herring.
`Based on this distinction alone, Patent Owner fails to refute the Petition's
`obviousness analysis.
`Moving on to slide 16. Not only is Patent Owner's discussion of
`the RAM irrelevant to our proposed combination, but it is incorrect as well.
`Patent Owner argues that Guthery's RAM cannot possibly be subject to
`segmentation, but this argument contradicts the explicit teachings of
`Guthery. Guthery explains that its RAM is indeed partitioned into separate
`memory blocks for use by different applications. Furthermore, even if
`Patent Owner's assessment of security vulnerabilities in Guthery's RAM
`memory were accurate, which is not the case, such an assessment is
`irrelevant to the motivation to improve security in the EEPROM memory,
`which is what is claimed.
`In other words, a POSITA would have found segmentation of the
`EEPROM beneficial regardless of the security condition of Guthery's RAM
`memory. In short, Patent Owner has not refuted the proposed motivation to
`combine Guthery with the RFID handbook.
`Turning to slide 17, in summary, each of the challenged claims are
`rendered obvious in view of the grounds presented in the Petition. Guthery
`and Nozawa render obvious the challenged claims. Patent Owner does not
`refute the obviousness combination of Guthery and Nozawa because they do
`not address the teachings relied on in the Petition. And Patent Owner does
`not refute the combination of the RFID handbook with Guthery and Nozawa
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`IPR2022-01137
`Patent 8,581,706 B2
`because Patent Owner focuses on the wrong type of memory. If there are no
`further questions on the original claims, Your Honor, I can move on to the
`motion to amend.
`So turning to slide 19, we move on to the motion to amend. And
`turning to, yeah, turning to slide 19, Patent Owner proposes substitute claim
`23 shown on the left. And claim 23 recites that after selection of an
`application, subsequent communication takes place without requiring any
`further steps. And substitute claims 25 to 26 recite similar subject matter.
`Patent Owner also proposes substitute claim 24 shown on the right, and
`Claim 24 recites that after communication readiness signals are generated,
`no further steps are required for subsequent communication.
`And as I will discuss today, the proposed claim amendments are
`either obvious or indefinite depending on how we interpret the claim
`languages therein. And the proposed claims also lack written description
`support because they claim the concepts that are not disclosed in the
`specification.
`Turning to slide 20, we'll start with the obviousness ground for
`Claims 23 to 26. Turning to slide 21. Now we pointed out in our opposition
`that the plain language of the substitute claims lacks enablement because it
`is unclear how we can perform subsequent communication without requiring
`any further steps. Because the claim just simply says without any further
`steps that would include things like formatting or transmitting, and it's
`unclear how we can do that, how we can perform subsequent
`communication without any further steps, and in the Board's preliminary
`guidance the claims were interpreted to mean that no steps are required
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`IPR2022-01137
`Patent 8,581,706 B2
`between when the application is selected and when subsequent
`communication starts. And under that communicate interpretation, we
`believe that the claims are rendered obvious by Guthery.
`Now, it is unclear to us whether Patent Owner agrees with the
`Board's interpretation in the preliminary guidance, then we maintain our
`original position that the claims lack enablement because it's unclear how we
`can have subsequent communication without requiring any further steps.
`Turning to slide 22, Guthery teaches precisely what is claimed in
`Claim 23 under the Board's interpretation. As we can see from this figure,
`there is a selection process in Guthery which is completed when the reader
`receives the permission to send packet at Step 348. Subsequent
`communication between the reader and the application then begins at Step
`350. And as we can see from the figure, there are no steps required between
`selection and subsequent communication. We see that the arrow goes
`directly from step 348 to step 350.
`Now, Patent Owner argues that silence alone can't teach a negative
`limitation, but we're not relying on silence here. As shown in the figure, we
`can affirmatively see that there are no steps that are required between step
`348 and step 350. In other words, the steps shown in this figure represent
`what is required for subsequent communication to occur. Now, the other
`substitute claims are obvious for similar reasons, as we've discussed in our
`opposition.
`Turning to slide 23, Patent Owners' challenge to the obviousness
`analysis relies on claim limitations that do not exist. While the claim simply
`recites selection, Patent Owner argues, among other things, that selection is
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`IPR2022-01137
`Patent 8,581,706 B2
`complete no later than when the reading device receives the identification
`number assigned to the application, or when session numbers are used no
`later than when the application is addressed uniquely with session numbers.
`But the claims here don't recite any such limitations. And if Patent Owner
`intended for the claim selection to include all these steps, they could have
`further defined their claims when they filed their motion to amend. Instead,
`they chose to recite the term selection without further limitations as to what
`it includes or excludes. So because Guthery teaches precisely what is
`claimed, Guthery renders obvious --
`JUDGE SMITH: Let me ask you what do you think the claimed
`selection includes or excludes?
`MR. CLEMENTS: So to me when I hear selection, there must
`be -- on behalf of the -- you know, if we're talking about the selection being
`done by the reader, which is the example given in the specification of the
`'706 Patent, the reader performs a step that will select which application it
`wants to talk to. And in Guthery, we believe that's taught. If I could go
`back to slide -- for example, if we look at slide 22, when the reader first
`sends out its request to send packet, it's saying, hey I want to talk to this
`application. But it doesn't yet know if that selection process is valid, or it
`doesn't know whether the application is ready.
`And so once it receives that permission to send packet back, it
`completes the selection step. It says, okay now the selection is complete. I
`now know I can communicate with this application. And that's consistent
`even with Patent Owner's own interpretation of what the selection step
`includes. They have said that it includes the steps necessary for the reading
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`IPR2022-01137
`Patent 8,581,706 B2
`device to engage in communications with the selected application. And so
`we believe that how we've identified selection, we believe that's a fair
`reading from Guthery to map it under the claims.
`JUDGE SMITH: Let me ask you this. Does your construction
`actually -- if we take Patent Owner's construction that you have on slide 23,
`would you say that even under Patent Owner's construction it's still taught by
`Guthery?
`MR. CLEMENTS: There are some statements by Patent Owner
`that it would still be taught by Guthery. So looking at slide 23, when we say
`the claimed selection process includes the steps necessary for the reading
`device to engage in the selected application, we believe that even under that
`interpretation it would still be taught. The bottom highlighted statement, it
`talks about receiving identification numbers or session numbers. And while
`I believe that the identification numbers are included because it's explained
`that those are within the packets themselves, it's not clear from Guthery
`whether the session identifier is there. But again, we don't think that any of
`those requirements are anywhere at all recited.
`JUDGE SMITH: I understand you're saying it's not required. I'm
`just asking you if we accept Patent Owner's construction, does Guthery still
`teach it? And are you saying that Guthery would teach the selection is
`complete when the reading device receives the identification number
`assigned to the application? Are you saying Guthery teaches that?
`MR. CLEMENTS: Yes. That's exactly right. So, even under
`Patent Owner's construction here, where they talk about that we need all the
`steps related to -- or when it says that the claim selection process includes
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`IPR2022-01137
`Patent 8,581,706 B2
`the steps necessary for the reading device to engage in communications with
`the selected application, i.e., when the selected application is sufficiently
`addressed by the reading device to begin communicating with the data
`carrier. We believe that's taught by Guthery. Similarly, we believe that no
`later than when the reading device receives the identification number
`assigned to the application, that's also taught by Guthery.
`JUDGE SMITH: And where is that taught by Guthery?
`MR. CLEMENTS: So in Guthery, if we go back to slide 22 and
`we see that at step 344, so it's three up from the bottom of the blue box,
`that's when the smart card sends the permission to send packet out. And
`then that permission to send packet, I believe, has that -- it identifies its
`application because it needs to know, the reader needs to know which
`application is telling it it's ready to receive communication. So when we
`receive that permission to send packet at step 348, it's also identifying -- it's
`also receiving the application identifier number there for application N in
`this example here.
`JUDGE SMITH: Did you happen to know which paragraph of
`Guthery says that includes the identifier?
`MR. CLEMENTS: So I don't know offhand. I can, so give me
`just one second, Your Honor. So if you look at Guthery Figure 9.
`JUDGE SMITH: Okay.
`MR. CLEMENTS: It's showing us what's all included in the
`permission to send packet. And as you can see, it includes 82, the
`application index.
`JUDGE SMITH: Okay.
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`IPR2022-01137
`Patent 8,581,706 B2
`MR. CLEMENTS: So when it's receiving the permission to send
`packet at step 348, it includes that application index, which is what we've
`identified as the application identifier.
`JUDGE SMITH: Okay. Thank you.
`MR. CLEMENTS: So turning to slide 24, in addition to being
`obvious in view of Guthery, the proposed subject matter lacks written
`description support and the claims are thus invalid under Section 112. So,
`turning to slide 25, Claim 23 lacks written description support because it
`attempts to claim the selection of one of the plurality of application's concept
`more broadly than what is actually disclosed. So the specification discloses
`that communication takes place without requiring any steps, "when an
`application has been selected for further communication by the reader."
`It does not disclose that no steps are required after an application
`has been selected by something else, like the smart card or the user, nor does
`the specification disclose that there are no steps required after an application
`has been selected, let's say, for deletion. The specification only discloses
`that no steps are required when the application has been selected for further
`communication by the reading device. But the proposed claims omit the
`essential features of this concept of there being no steps required after
`selection. The proposed claims merely state that there are no steps after
`selection of an application. So, the claim thus covers scenarios and
`situations that weren't contemplated by the inventors.
`And this is the very purpose of Section 112, to prevent applicants
`from capturing more than what they actually demonstrate possession of.
`And Patent Owner cannot fix the lack of the essential features in the claims
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`IPR2022-01137
`Patent 8,581,706 B2
`by importing limitations from the specification as they appear to suggest.
`We understand Patent Owners' position to be here that when you interpret
`the claims in light of the specification, that you would know that it's the
`selection that's being done by the reader for the purpose of communication.
`But Patent Owners' position does more than just interpret the claim
`in light of the specification. Rather, they're seeking to add an entirely new
`limitation into the claim. But the Federal Circuit has cautioned against
`reading limitations into a claim even when the embodiment is the only
`embodiment described in the specification. So because Claim 23 is recited
`to cover situations that are not disclosed, it is of a scope that lacks written
`description support.
`So turning to Slide 26, Claim 24 has a similar problem. Again, the
`specification discloses only that there are no steps required when an
`application has been selected for further communication by the reading
`device. But here, Patent Owner is attempting to claim a different concept,
`that there are no steps required after the communication readiness signals are
`generated. But this concept is nowhere to be found in the specification, as
`the Board indicated in their preliminary guidance. Turning to slide 27, not
`only is Claim 24 not disclosed, but it contradicts what the specification does
`describe. The specification requires at least two further steps, application
`selection and session number assignment for communication after the
`communication readiness signals to have been generated.
`So again, Claim 24 here is reciting something that is not disclosed
`and it therefore lacks written description support. Turning to slide 28, in
`summary, Guthery and Nozawa rendered the proposed substitute claims
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`IPR2022-01137
`Patent 8,581,706 B2
`obvious under the Board's interpretation and the claims would lack
`enablement otherwise. And the claims lack written description support
`because they are claimed with a scope that is not disclosed in the
`specification. And if there are no further questions, Your Honors, I will
`reserve the remaining of my time for rebuttal.
`JUDGE SMITH: Okay. You have 26 minutes left, plus the 25, so
`you have a little over 50 minutes for rebuttal. Okay, Patent Owner,
`gentlemen, the two of you have 55 minutes to address the prior art ground,
`and to address the motion to amend. You may begin when ready.
`MR. AUCHTER: Thank you, Your Honor. Directing the Board's
`attention to Aire Technologies demonstrative exhibits, slide number 2, we
`have two arguments. The first is that a person of ordinary skill in the art
`would not have been motivated to combine Guthery and Nozawa because
`the combination would defeat Guthery's goal of tightly managing the RAM
`and the buffers. The second would be that a person of ordinary skill in the
`art would not be motivated to combine Guthery with the RFID handbook
`because the inability to segment the RAM would leave the system open to
`security risk, and therefore not achieve the security benefits that would have
`been arguably achieved using the RFID system of segmenting the
`application memory.
`Turning to slide number 5, in Guthery, the goal is to manage the
`limited resources. Looking at Exhibit 1005, column 2, lines 52 to 58,
`Guthery talks about employing fixed-size data packets and tightly coupling
`the execution of the applications and the communication with them to
`efficiently manage the smart card's limited RAM memory, that being the
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`IPR2022-01137
`Patent 8,581,706 B2
`primary issue that Guthery was identifying, limited resources and how best
`to use them. As they say in Guthery in column 10, line 42, the primary
`purpose of the card manager is to make the most efficient use of the limited
`RAM in a smart card.
`Turning to slide number 6, we see that in Guthery, all
`communications with the card manager and hence with the application of
`formatted as packets of fixed number of bytes. You're looking at a fixed
`number of bytes, and that requires you to use a specific sequence of packets.
`And this is important because that means that if one was to use