Trials@uspto.gov
`571-272-7822
`
`Paper 23
`Date: January 19, 2024
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`v.
`RFCYBER CORP.,
`Patent Owner.
`
`IPR2022-01239
`Patent 10,600,046 B2
`
`
`
`
`
`
`
`
`
`Before JOSIAH C. COCKS, PATRICK R. SCANLON, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`SCANLON, Administrative Patent Judge.
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 23
`Date: January 19, 2024
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`v.
`RFCYBER CORP.,
`Patent Owner.
`
`IPR2022-01239
`Patent 10,600,046 B2
`
`
`
`
`
`
`
`
`
`Before JOSIAH C. COCKS, PATRICK R. SCANLON, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`SCANLON, Administrative Patent Judge.
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`
`
`
`
`
`
`IPR2022-01239
`Patent 10,600,046 B2
`
`INTRODUCTION
`I.
`Apple Inc. (“Petitioner”) challenges claims 1‒5, 12–14, 17, and 18 of
`U.S. Patent No. 10,600,046 B2 (Ex. 1001, “the ’046 patent”), which is
`assigned to RFCyber Corp. (“Patent Owner”). We have jurisdiction under
`35 U.S.C. § 6, and this Final Written Decision is issued pursuant to
`35 U.S.C. § 318(a) and 37 C.F.R. § 42.73. For the reasons that follow, we
`determine that Petitioner has shown by a preponderance of the evidence that
`claims 1‒5, 12–14, 17, and 18 of the ’046 patent are unpatentable.
`A. Procedural History
`Petitioner filed a Petition (Paper 1, “Pet.”) requesting an inter partes
`review of the challenged claims. Patent Owner filed a Preliminary Response
`(Paper 6, “Prelim. Resp.”).
`We instituted a trial as to all challenged claims. Paper 7 (“Decision
`on Institution” or “Dec. Inst.”).
`After institution, Patent Owner filed a Patent Owner Response
`(Paper 11, “PO Resp.”), Petitioner filed a Reply (Paper 15, “Reply”), and
`Patent Owner filed a Sur-reply (Paper 16, “Sur-reply”).
`Petitioner relies on the Declaration of Gerald W. Smith (Ex. 1003)
`and the Supplemental Declaration of Gerald W. Smith (Ex. 1028) in support
`of its contentions. Patent Owner relies on the Declaration of Alfred C.
`Weaver, Ph.D. (Ex. 2001) in support of its contentions.
`An oral hearing was held on October 24, 2023. A transcript of the
`hearing is included in the record. Paper 22 (“Tr.”).
`B. Real Parties in Interest
`Petitioner identifies itself as the real parties in interest. Pet. 69.
`Patent Owner identifies itself as the real party in interest. Paper 5, 1.
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`C. Related Matters
`The parties identify the following proceedings as related matters
`involving the ’046 patent: RFCyber Corp. v. Apple Inc., Case No. 6:21-cv-
`00916-ADA (W.D. Tex.) (the “District Court Case”); and RFCyber Corp. v.
`Visa U.S.A. Inc., Case No. 6:22-cv-00697 (W.D. Tex.). Pet. 69; Paper 5, 1.
`In addition, Petitioner identifies several other matters involving the ’046
`patent that have been dismissed or terminated. Pet. 69–70.
`D. The ’046 Patent
`The ’046 patent, titled “Method and Apparatus for Mobile Payments,”
`issued March 24, 2020, with claims 1–20, and claims priority to several
`applications dating to September 24, 2006. 1 Ex. 1001, codes (45), (54),
`(60), (63), 1:7–9, 25:20–28:31.
`The ’046 patent relates to electronic commerce and, more particularly,
`to settling payments “using a mobile device reading electronic bills or
`invoices off from another mobile device in a near field communication
`range.” Ex. 1001, 1:16‒21. In general, the invention includes a first mobile
`device that generates an electronic invoice and can be part of a point of sale
`(“POS”) machine. Id. at 1:56–58, 2:1–3. The first mobile device is
`embedded with a secure element and executes a software module. Id.
`at 1:57–58, 2:55–59. When the first mobile device is brought to a consumer
`using a second mobile device, the electronic invoice is read wirelessly into
`the second mobile device. Id. at 1:59–63. The second mobile device is a
`
`1 Nevertheless, Petitioner argues that at least claim 1 has an effective filing
`date after March 16, 2013. Pet. 3–5 (citing Google LLC v. RFCyber Corp.,
`PGR2021-00029, Paper 10 at 3–14 (PTAB Sept. 23, 2021). Patent Owner
`does not dispute this contention. See generally Prelim. Resp.; PO Resp.
`Therefore, for purposes of this proceeding, we agree that at least claim 1 has
`an effective filing date after March 16, 2013.
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`Patent 10,600,046 B2
`near field communication (“NFC”) device “configured to execute an
`application that communicates with the software module in the first mobile
`device to read the data off from the first mobile device.” Id. at 2:28–30,
`2:65–3:1.
`The user is then able to verify the amount charged and authorize
`payment, after which the second mobile device “communicates with a
`payment gateway or network for payment that is configured to proceed with
`the payment in accordance with a chosen payment method.” Id. at 1:63–67,
`2:61–64. That is, the gateway receives the payment request from the second
`mobile device, verifies the payment request, and sends a payment response
`to the user of the first mobile device after the payment request is processed.
`Id. at 3:17–31.
`Figure 1A of the ’046 patent is reproduced below.
`
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`Patent 10,600,046 B2
`Figure 1A shows system configuration 100, which is one embodiment
`of the invention. Ex. 1001, 5:29‒30. System configuration 100 includes
`network 102, which provides services by a financial institution to
`electronically transfer money or settle payments. Id. at 5:30–34. Payment
`gateway 104 comprises one or more servers configured to provide an
`application that may be installed on a user’s mobile device. Id. at 5:52–56.
`The application allows a user to authorize payment of an electronic invoice.
`Id. at 5:60–62.
`System configuration 100 also includes POS device 106 at a point of
`sale. Id. at 6:6–7. POS device 106 generates an electronic bill or invoice
`that is loaded onto portable device 108, such as a contactless card or an NFC
`device, which contacts a user’s NFC device. Id. at 6:10–14. In one
`embodiment, “the POS device is a single device embedded with a secure
`element. The single device may be an NFC device that is used to enter
`information to generate an invoice.” Id. at 6:15–18. This device is brought
`to the customer for authorization and payment. Id. at 6:22–23.
`Alternatively, “the POS device includes a stationary device corresponding to
`106 of FIG. 1A and one or more contactless cards corresponding to 108 of
`FIG. 1A.” Id. at 6:23–26. In this case, “[t]he stationary device is used by
`the cash[i]er to enter charging information to generate an invoice. A
`contactless card is loaded with the electronic invoice and brought to the
`customer for authorization and payment.” Id. at 6:26–30.
`Device 110 is a personal NFC device with wallet software. Id. at
`Fig. 1A. Specifically, device 110 “is configured to function as an electronic
`purse or e-purse that may be used to directly settle a charge being displayed
`on a display screen thereof.” Id. at 8:25–28.
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`To settle a payment, the merchant, such as a waiter or cashier at a
`restaurant, causes POS device 106 to generate an electronic bill that is
`transported to a contactless card. Id. at 7:19–22. The contactless card is
`then presented to the customer who uses his or her mobile device to read the
`contactless card. Id. at 7:24–26. Upon detecting the contactless card in the
`near field, the application on the user’s mobile device reads data pertaining
`to the electronic bill from the contactless card and subsequently displays the
`electronic bill on a screen of the mobile device for the customer to verify.
`Id. at 7:28–33. The customer then chooses a method for settling the bill,
`such as an e-purse already created in the mobile device, cash, traditional
`credit or debit card, and electronic transfer. Id. at 7:46–53.
`When selecting to pay the bill via the e-purse, the customer enters the
`amount to be paid against the bill; the customer may enter more than what is
`being charged in the bill as a tip or gratuity. Id. at 7:57–61. Once the
`customer has entered the total amount to be paid, the application on the
`user’s mobile device sends a payment request to gateway or server 104 for
`processing. Id. at 7:57–61. “[T]he server 104 receives the payment request
`authorized by the consumer and proceeds with the payment request in
`conjunction with the payment network 102,” and “[o]nce the transaction is
`complete or denied, the server 104 sends a notice to the merchant.” Id.
`at 8:17–24.
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`Figure 6A of the ’046 patent is reproduced below.
`
`
`Figure 6A “is a diagram showing an exemplary architecture, in which
`a portable device is enabled as a mobile POS conducting e-commerce and
`m-commerce.” Ex. 1001, 4:32‒35. Specifically, exemplary architecture 600
`includes portable device 630 that includes baseband 624 and secured
`element 629. Id. at 18:65–19:3. POS manager 623 is installed in baseband
`623, and POS SAM2 628 is installed in secured element 629 to enable
`portable device 630 to act as a mobile POS. Id. at 19:3–6. This
`configuration allows real time transaction 639 to be conducted between
`
`
`2 A “POS SAM” refers to a mobile POS application applet. Ex. 1001,
`18:13–14. Although the acronym “SAM” is not defined in the ’046 patent, it
`appears to refer to a Security Authentication Module. See Ex. 1016, 2.
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`portable device 630 and e-token enabled device 636, which can be a single
`functional card or a portable device enabled with an e-purse. Id. at 19:7–10.
`Real time transaction 639 can be conducted without the portable
`device connecting to POS transaction server 613, in which case records of
`accumulated offline transactions are uploaded via secured channel 618 to
`POS transaction server 613 for settlement. Id. at 19:14–16, 9:23–27.
`However, portable device 630 may connect to POS transaction servers 613
`over cellular network 520 in certain instances. Id. at 19:16–18.
`E. Challenged Claims
`Petitioner challenges claims 1‒5, 12–14, 17, and 18, of which claims
`1, 12, and 18 are independent. Claim 1, reproduced below, is illustrative.
`1.
`A method for mobile payment, the method comprising:
`causing a mobile device to capture data directly from a
`tag physically presented thereto, wherein the tag receives the
`data directly from a POS device and allows the mobile device
`to capture the data, the data embedded in the tag includes an
`electronic invoice and settlement information with a merchant
`associated with the POS device;
`extracting the electronic invoice from the captured data
`in the mobile device; displaying the electronic invoice on a
`display of the mobile device to show an amount to be paid by a
`user of the mobile device, wherein the mobile device is
`configured to execute an installed application therein to capture
`the data from the tag;
`receiving an entry by the mobile device, the entry
`including the amount for the invoice and optionally an
`additional amount from the user;
`calculating a total amount by adding the additional
`amount to the amount in the electronic invoice;
`generating a payment request in the mobile device in
`response to the electronic invoice after the user has chosen an
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`Patent 10,600,046 B2
`electronic purse (e-purse) maintained locally in the mobile
`device;
`displaying the electronic invoice on the display of the
`mobile device for the user to verify the payment request
`verifying the total amount with a balance in the e-purse,
`wherein said verifying the total amount with a balance in the e-
`purse is performed within the mobile device without sending
`the payment request to a payment gateway;
`displaying a denial of the payment request when the
`balance is less than the total amount;
`sending the payment request from the mobile device to
`the payment gateway, wherein the balance is sufficient to honor
`the payment request, the payment gateway sends a message
`directly to the POS device that a monetary transaction per the
`payment request sent from the mobile device has been
`successfully completed; and
`displaying a confirmation in the mobile device that the
`balance in the e-purse has been reduced by the total amount.
`Ex. 1001, 25:20–63.
`F. Instituted Grounds of Unpatentability
`We instituted inter partes review of the challenged claims based on
`the following grounds of unpatentability asserted by Petitioner:3
`Claim(s) Challenged
`35 U.S.C. §
`Reference(s)/Basis
`1–5, 12–14
`103
`Laracey, 4 Jogu,5
`17
`103
`Laracey, Jogu, Tang6
`
`
`3 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), amended 35 U.S.C. § 103. Because at least one claim of
`the ’046 patent has an effective filing date after March 16, 2013, as
`discussed above in footnote 1, we apply the AIA version of 35 U.S.C. § 103.
`See AIA § 3(n)(1).
`4 US 2011/0251892, published Oct. 13, 2011 (Ex. 1004).
`5 JP 4901053, published Mar. 21, 2012 (Ex. 1005).
`6 WO 2009/116954 A2, published Sept. 24, 2009 (Ex. 1006).
`
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`Patent 10,600,046 B2
`Claim(s) Challenged
`
`18
`Dec. Inst. 22; Pet. 8.
`
`35 U.S.C. §
`103
`
`Reference(s)/Basis
`Laracey, Jogu, Dorsey7
`
`II. ANALYSIS
`A. Legal Standards
`To prevail in its challenge, Petitioner must demonstrate by a
`preponderance of the evidence that the claims are unpatentable. 35 U.S.C.
`§ 316(e) (2018); 37 C.F.R. § 42.1(d) (2022). “In an IPR, the petitioner has
`the burden from the onset to show with particularity why the patent it
`challenges is unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d
`1356, 1363 (Fed. Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (2012) (requiring
`inter partes review petitions to identify “with particularity . . . the evidence
`that supports the grounds for the challenge to each claim”)). This burden of
`persuasion never shifts to the patent owner. See Dynamic Drinkware, LLC
`v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015) (discussing the
`burden of proof in inter partes review).
`A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
`differences between the claimed subject matter and the prior art are such that
`the subject matter, as a whole, would have been obvious at the time the
`invention was made to a person having ordinary skill in the art to which said
`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`(2007). The question of obviousness is resolved on the basis of underlying
`factual determinations including: (1) the scope and content of the prior art;
`(2) any differences between the claimed subject matter and the prior art;
`(3) the level of ordinary skill in the art; and (4) when in evidence, objective
`
`
`7 US 9,916,581 B2, issued Mar. 13, 2018 (Ex. 1007).
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`indicia of non-obviousness (also called secondary considerations), such as
`commercial success, long-felt but unsolved needs, and failure of others.
`Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966). We analyze grounds
`based on obviousness in accordance with the above-stated principles.8
`B. Level of Ordinary Skill in the Art
`In determining whether an invention would have been obvious at the
`time it was made, 35 U.S.C. § 103 requires us to resolve the level of
`ordinary skill in the pertinent art at the time of the effective filing date of the
`claimed invention. Graham, 383 U.S. at 17. The person of ordinary skill in
`the art is a hypothetical person who is presumed to have known the relevant
`art. In re GPAC, Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995). Factors that
`may be considered in determining the level of ordinary skill in the art
`include, but are not limited to, the types of problems encountered in the art,
`the sophistication of the technology, and educational level of active workers
`in the field. Id. In a given case, one or more factors may predominate. Id.
`Petitioner contends that a person having ordinary skill in the art
`“would have had at least a bachelor’s degree in computer science, computer
`engineering, or equivalent with at least one year of experience in the field of
`mobile payments,” and “[a]dditional education or experience might
`substitute for the above requirements.” Pet. 6–7 (citing Ex. 1003 ¶¶ 34–35).
`Patent Owner does not address the level of ordinary skill in its Response.
`Based on our review of the record before us, we determine that
`Petitioner’s stated level of ordinary skill in the art is reasonable because it
`appears consistent with the evidence of record, including the asserted prior
`
`
`8 The record does not include any evidence of objective indicia of non-
`obviousness.
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`Patent 10,600,046 B2
`art. Accordingly, for the purposes of this Decision, we adopt Petitioner’s
`definition.
`
`C. Claim Construction
`In inter partes reviews, the Board interprets claim language using the
`district-court-type standard, as described in Phillips v. AWH Corp., 415 F.3d
`1303 (Fed. Cir. 2005) (en banc). See 37 C.F.R. § 42.100(b). Under that
`standard, we generally give claim terms their ordinary and customary
`meaning, as would be understood by a person of ordinary skill in the art at
`the time of the invention, in light of the language of the claims, the
`specification, and the prosecution history. See Phillips, 415 F.3d at
`1313–14. Although extrinsic evidence, when available, may also be useful
`when construing claim terms under this standard, extrinsic evidence should
`be considered in the context of the intrinsic evidence. See id. at 1317–19.
`Petitioner contends that, in the District Court Case, the parties have
`agreed to construe the claim term “payment gateway” as a “server or
`collection of servers for settling a payment.” Pet. 9 (citing Ex. 1016, 2).
`Petitioner further contends that the parties are disputing the constructions of
`the claim terms “e-purse,” e-purse applet,” and “application” in the District
`Court Case, but the differences between the proposed constructions need not
`be resolved for this proceeding because its asserted grounds of
`unpatentability satisfy both Patent Owner’s and Petitioner’s proposed
`constructions.9 Id. at 9–10 (citing Ex. 1016, 4–5). Petitioner, however,
`applies its proposed construction in its arguments. See Pet. 29.
`
`
`9 In the District Court Case, Petitioner proposed that “e-purse” should be
`construed as “software that stores electronic financial information, including
`electronic value, in a local portable device,” while Patent Owner proposed
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`In its Response, Patent Owner contends that its proposed construction
`was adopted in the District Court Case, as well as in another proceeding in
`the Eastern District of Texas. PO Resp. 11 (citing RFCyber Corp. v. Google
`LLC, No. 2:20-cv-274-JRG, 2021 WL 5357465, at *6-*9 (E.D. Tex.
`Nov. 17, 2021); RFCyber Corp. v. Apple Inc., No. 6:21-cv-00916-ADA,
`Dkt. 100 (W.D. Tex. Sep. 13, 2022)). Patent Owner argues that because the
`parties agree that an e-purse must be “software” that “stores financial
`information in a local device,” “[t]he Board need not resolve the distinction
`between the parties’ proposals for this proceeding because Petitioner fails to
`show that Laracey discloses ‘an electronic purse (e-purse) maintained locally
`in the mobile device’ under the agreed portions of the construction.” Id. at
`11–12.
`We agree that the differences between the two proposed constructions
`are minimal. On the full record before us, however, Petitioner does not
`explain sufficiently why the proper construction of “e-purse” requires that
`the stored financial information include electronic value and that the
`software is in a local portable device. Therefore, we adopt the district
`court’s construction of “e-purse” as “software that stores electronic financial
`information in a local device” for purposes of this Decision.
`D. Ground 1: Asserted Obviousness Based on Laracey and Jogu
`Petitioner asserts that claims 1–5 and 12–14 are unpatentable under
`35 U.S.C. § 103 based on Laracey and Jogu. Pet. 10–54. Patent Owner
`provides arguments addressing this asserted ground of unpatentability.
`
`
`that “e-purse” should be construed as “software that stores electronic
`financial information in a local device.” Ex. 1016, 4.
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`PO Resp. 13–32. We first summarize the references and then address the
`parties’ contentions.
`
`1. Laracey
`Laracey, titled “Mobile Phone Payment Processing Methods and
`Systems,” was published on October 13, 2011. Ex. 1004, codes (54), (43).
`Laracey relates to “using mobile devices to conduct payment transactions at
`merchant locations including brick and mortar locations and remote
`locations as well as for person to person transactions.” Id., code (57).
`Figure 1 of Laracey is reproduced below.
`
`
`Figure 1 is a block diagram depicting payment system 100. Ex. 1004 ¶¶ 7,
`27. A user, referred to as the customer, uses mobile device 102 (such as a
`mobile telephone) to conduct a purchase transaction with merchant 108.
`Id. ¶ 27. For a point-of-sale purchase, merchant 108 totals the items to be
`purchased and prompts the customer to select a payment option, such as the
`mobile payment option disclosed by Laracey. Id. ¶ 28. Alternatively, rather
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`than requiring the customer to select the mobile payment option, the choice
`can be made by the customer scanning, capturing, or entering a checkout
`identifier. Id. ¶ 29. When the mobile payment option is selected, merchant
`108 transmits a merchant payment authorization request message to
`transaction management system 130 via path 116. Id. ¶ 30. This message
`may include a merchant identifier, the amount due, and a unique checkout
`token. Id.
`The customer, either before or after selecting the mobile payment
`option, performs an authentication process to confirm their identity and
`authority to conduct transaction via the mobile payment process. Id. ¶ 33.
`“After a successful authentication process, the customer is prompted to scan,
`capture (or otherwise enter) a checkout token from a device associated with
`the merchant 108 (shown as interaction 112 between the mobile device 102
`and the merchant 108).” Id. ¶ 35. Mobile device 102 then transmits the
`checkout token to transaction management system 130 in a customer
`transaction lookup request message via path 114. Id. The checkout token
`can be either a static or dynamic token. Id. ¶ 36.
`When a static token is used, transaction management system 130
`matches information in the customer transaction lookup request with
`information in the merchant payment authorization request. Id. Upon
`finding a match, transaction management system 130 transmits a transaction
`detail message to mobile device 102 via path 114 that provides the customer
`with details about the transaction. Id. When a dynamic token is used,
`checkout processing may proceed without a customer transaction lookup
`request message being transmitted to transaction management system 130.
`Id. ¶ 38.
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`Next, the customer causes a customer payment authorization request
`message to be submitted from mobile device 102 to transaction management
`system 130. Id. ¶ 39. Transaction management system 130 then sends an
`authorization approval request message to one or more payment processing
`networks for the authorization, clearing, and settlement of funds for the
`transaction. Id. ¶ 40.
`
`2. Jogu
`Jogu relates to a payment method using a mobile phone, and, more
`specifically, a service that mediates payments at virtual stores and brick-and-
`mortar stores on the Internet. Ex. 1005, 3. In one embodiment, a user orders
`a product or service from virtual store 24 using mobile phone 13 and selects
`the mobile phone payment method. Id. at 5, Fig. 5. Upon receiving the
`billing request, mobile phone company 10 either notifies virtual store 24 that
`the service cannot be used if there is a problem with the user’s status, or
`sends an electronic invoice to mobile phone 13 if there is no problem with
`the user’s status. Id. at 5–6. When the user approves payment of the
`invoice, mobile phone 13 verifies the prepaid balance and, if the prepaid
`balance is less than the payment amount, notifies mobile phone company 10
`that the payment cannot be made due to insufficient balance. Id. at 6. On
`the other hand, if the prepaid balance is more than the payment amount,
`mobile phone company 10 is notified that the payment is approved. Id.
`3. Independent Claims 1 and 12
`Petitioner contends that the proposed combination of Laracey and
`Jogu discloses each limitation of claims 1 and 12. Pet. 14–47, 52–54. To
`support its arguments, Petitioner identifies certain passages in the cited
`references and explains the significance of each passage with respect to the
`corresponding claim limitation. Id. Petitioner also articulates reasons that
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`one of ordinary skill in the art allegedly would have been motivated to
`implement Jogu’s balance check and update processes in Laracey’s mobile
`device with a reasonable expectation of success. Id. at 40–42, 53; see also
`id. at 46–47 (asserting reasons to modify Laracey to display a confirmation
`of a balance reduction on the mobile device as taught by Jogu).
`Patent Owner argues that Laracey does not disclose or render obvious
`an “e-purse” that is “maintained locally in the mobile device” as required by
`claims 1 and 12. PO Resp. 13–28. Patent Owner also argues that the
`proposed combination fails to satisfy verifying the e-purse balance, as
`required by claims 1 and 12, because one of ordinary skill in the art would
`not combine Laracey and Jogu in the manner proposed. Id. at 28–32.
`The “E-purse” Limitation
`a)
`Claims 1 and 12 both recite “an electronic purse (e-purse) maintained
`locally in the mobile device.” Ex. 1001, 25:42–43, 27:1–3. In addressing
`this limitation, Petitioner argues that Laracey discloses a mobile device
`equipped with software that satisfies Petitioner’s construction of “e-purse.”10
`Pet. 29 (citing Ex. 1004 ¶ 16). More specifically, Petitioner argues that one
`of ordinary skill in the art “would have understood that Laracey’s ‘stored
`value’ account is an e-purse that stores electronic financial information,
`including electronic value, as claimed.” Id. at 29–30 (citing Ex. 1003 ¶¶ 98–
`101). Petitioner argues further that Laracey also discloses displaying stored
`value account balances on the mobile device. Id. at 30–31 (citing Ex. 1004
`¶¶ 93, 165, Fig. 8B; Ex. 1003 ¶ 101).
`
`
`10 Mr. Smith testifies that Petitioner’s analysis satisfies both Patent Owner’s
`and Petitioner’s constructions of “e-purse.” Ex. 1003 ¶ 98.
`
`17
`
`
`
`IPR2022-01239
`Patent 10,600,046 B2
`Mr. Smith testifies that “a stored value account was well known prior
`to the ’046 patent and was commonly stored in a form of secured memory
`and contained data representing an amount of money (i.e., electronic value)
`that could be used for a purchase transaction and funded.” Ex. 1003 ¶ 100;
`see also id. ¶¶ 50–60 (describing background technology relating to mobile
`payments and stored value accounts). In addition, Mr. Smith testifies that
`“Laracey’s stored value account would have been understood to be software
`located in memory within a mobile device that contained financial
`information including data representing an amount of money (e.g., a
`balance) useable for purchases.” Id. ¶ 100.
`As discussed above, we construe “e-purse” for purposes of this
`Decision as “software that stores electronic financial information in a local
`device.” See supra § II.C. Patent Owner contends that Laracey does not
`disclose an e-purse satisfying this construction for two reasons. First, Patent
`Owner argues that neither Petitioner nor Mr. Smith have shown that
`Laracey’s stored value account, particularly the “PetPlace…3518” account
`depicted in Figure 8B, is software. PO Resp. 14 (citing Pet. 29–31;
`Ex. 1003 ¶ 101; Ex. 2003, 67:11–68:12). Instead, relying on the testimony
`of Dr. Weaver, Patent Owner asserts that a customer account “is simply a
`visualization of a collection of information,” and one of ordinary skill in the
`art would not recognize it as software. Id. (citing Ex. 2001 ¶ 56); see also
`Sur-reply 2 (making the same argument). Patent Owner also argues that “the
`concept of a stored value account is not software either.” PO Resp. 15
`(citing Ex. 2001 ¶ 56).
`In the Reply, Petitioner contends that neither Patent Owner nor
`Dr. Weaver disputes that Laracey’s mobile device uses software for its
`transaction functionality. Reply 20 (citing Ex. 1029, 60:19–24). Patent
`
`18
`
`
`
`IPR2022-01239
`Patent 10,600,046 B2
`Owner responds by arguing that the Petition identifies Laracey’s stored
`value account—not its transaction functionality—as the claimed e-purse.
`Sur-reply 1 (citing Pet. 29; PO Resp. 14). Patent Owner asserts that
`“Petitioner’s late attempt to backfill its Petition” should be rejected. Id.
`at 1–2 (citing MModal LLC v. Nuance Commc’ns, 846 F. App’x 900, 906-07
`(Fed. Cir. 2021); Apple Inc. v. UUSI, LLC, No. 2021-1035, 2023 WL
`3071643, at *3 (Fed. Cir. Apr. 25, 2023)).
`We agree with Petitioner that the Petition does “not rely solely and
`exclusively on the account balance in isolation.” See Tr. 11:17–20.
`Specifically, the Petition asserts that “Laracey teaches that its mobile device
`is equipped with software that satisfies [Petitioner’s] construction. Namely,
`Laracey’s ‘mobile device can be used to initiate and conduct payment
`transactions involving a number of different payment accounts, including,
`for example, credit, debit, deposit, stored value, checking and other
`accounts.’” Pet. 29 (quoting Ex. 1004 ¶ 16). Thus, Petitioner relies not
`only on Laracey’s disclosure of a stored value account, but also on Laracey’s
`disclosure of using a mobile device to initiate and conduct payment
`transactions. As for the subsequent assertion on page 29 of the Petition that
`one of ordinary skill in the art “would have understood that Laracey’s
`‘stored value’ account is an e-purse that stores electronic financial
`information, including electronic value,” we agree with Petitioner that this
`assertion is intended to show that Laracey’s software satisfies the portion of
`the claim construction that requires storing financial information. See
`Tr. 12:1–5. We are not persuaded that this assertion is intended to identify
`Laracey’s stored value account solely as the claimed e-purse. For these
`reasons, we disagree with Patent Owner’s assertion that Petitioner
`improperly raises a new argument in its Reply.
`
`19
`
`
`
`IPR2022-01239
`Patent 10,600,046 B2
`Furthermore, we agree that Laracey discloses mobile devices that use
`software to conduct payment transactions. See Pet. 29 (Petitioner asserting
`Laracey’s mobile device is equipped with software for initiating and
`conducting payment transactions); see also Ex. 1029, 60:19–24 (Dr. Weaver
`agreeing that Laracey’s mobile device executes software to perform its
`transaction functionality). For instance, Laracey discloses that its invention
`relates to “systems, methods, processes, computer program code, and means
`for using mobile devices to conduct payment transactions.” Ex. 1004 ¶ 16
`(emphasis added); see also id. ¶ 17 (describing providing computer program
`code for conducting payment transactions). Laracey also discloses one
`example of mobile phone that has a web browser for accessing and using the
`payment system and another example of mobile phone that accesses and
`uses the payment system via “an iPhone® application (or ‘app’) configured
`to facilitate payment transactions” that has been downloaded to the phone.
`Id. ¶ 24. In addition, Laracey discloses that “mobile device 202 may operate
`a payment application allowing mobile device 202 to operate as a payment
`device” and “[t]he mobile payment application may be an ‘app’ or computer
`program code stored on the mobile device 202.” Id. ¶¶ 46, 91. In view of
`these disclosures, we determine that Laracey discloses using software stored
`on a mobile device for conducting payment transactions with the mobile
`device.
`Moreover, even if assuming for the sake of argument that the Petition
`does rely on Laracey’s stored value account alone as the claimed e-purse, we
`disagree that Petitioner has not shown sufficiently that Laracey’s stored
`value account is software. As noted above, Mr. Smith testifies that “a stored
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