UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`
`Askeladden LLC
`Petitioner
`
`v.
`
`Sean McGhie and Brian Buchheit
`Patent Owner
`
`
`
`____________
`
`Case IPR2015-00124
`Patent 8, 540, 152
`____________
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`
`
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`
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`Before SALLY C. MEDLEY, Administrative Patent Judge
`
`
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`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`
`Askeladden LLC
`Petitioner
`
`v.
`
`Sean McGhie and Brian Buchheit
`Patent Owner
`
`
`
`____________
`
`Case IPR2015-00124
`Patent 8, 540, 152
`____________
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`
`
`Before SALLY C. MEDLEY, Administrative Patent Judge
`
`
`
`
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ………………………………………….
`LIST OF PETITIONERS’ EXHIBITS…………………………………..
`LIST OF PATENT OWNERS’ EXHIBITS……………………………..
`I.
`CLAIM CONSTRUCTION………………………………..
`II.
`PETITION GROUNDS ARE REDUNDANT…………….
`III. PETITION 35 USC 103 GROUNDS ARE DEFICIENT….
`IV.
`IMPROPER REAL PARTY OF INTEREST………………
`V. CONCLUSION…………………………………………….
`
`
`
`
`Page(s)
`iii
`iv
`ix
`1
`2
`5
`55
`59
`
`
`
`ii
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`
`
`TABLE OF AUTHORITIES
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`
`Page(s)
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`CASES
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`
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`STATUTES
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`35 U.S.C. §103 ……………………………………………………….. 5, 41, 46
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`
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`
`
`iii
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`
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`LISTS OF EXHIBITS
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`PETITIONER’S EXHIBITS
`
`
`1501
`
`U.S. Patent No. 8,523,063
`
`1502
`
`Declaration of Matthew Calman
`
`1503
`
`U.S. Patent Application Publication No. 2005/0021399 ("Postrel")
`
`1504
`
`U.S. Patent Application Publication No. 2002/0143614 ("MacLean")
`
`1505
`
`U.S. Patent No. 6,721,743 ("Sakakibara")
`
`1506
`
`Wayback Machine archive dated June 20, 2000, for American Express
`
`web site: "How to redeem or transfer your points online”
`
`1507
`
`Wayback Machine archive dated June 20, 2000, for American Express
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`web site: "Air rewards"
`
`1508
`
`Wayback Machine archive dated January 4, 1997, for Citibank web
`
`site: "Citibank Cards and Services"
`
`1509
`
`Wayback Machine archive dated December 1, 1998, for American
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`Express web site: "Rewards Cards"
`
`1510
`
`Wayback Machine archive dated June 21, 2000, for American Express
`
`
`
`iv
`
`
`
`web site: "Shopping rewards"
`
`1511
`
`Wayback Machine archive dated December 9, 2003, for Marriott
`
`Rewards web site: "Air Mileage"
`
`1512
`
`Wayback Machine archive dated November 25, 2002, for Starwood
`
`Hotels & Resorts web site: "Transfer: Airlines"
`
`1513
`
`Wayback Machine archive dated June 19, 2000, for United Airlines
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`web site: "Mileage Plus partners"
`
`1514
`
`Wayback Machine archive dated July 17, 2004, for WebFlyer web site:
`
`"Mileage Converter"
`
`1515
`
`MacDonald, Jay, Experience rewards pay off for some credit card
`
`users, Bankrate.com, November 17, 2003 (available at http: / / www.
`
`bankrate.com/finance/credit-cards /experience-rewards-pav-off-for-
`
`some-credit-card-users-i.aspx)
`
`1516
`
`Claim Construction Memorandum Opinion and Order, issued
`
`September 2, 2014, in Loyalty Conversion Systems Corp. v. American
`
`Airlines, Inc., Case No. 2:13-cv-00655 (E.D. Tex.)
`
`1517
`
`Memorandum Opinion and Order, issued September 3, 2014, in
`
`
`
`v
`
`
`
`Loyalty Conversion Systems Corp. v. American Airlines, Inc., Case
`
`No. 2:13-cv-00655 (E.D. Tex.)
`
`1518
`
`Patent Owner's Preliminary Response (Paper No. 17), in Covered
`
`Business Method Patent Review of U.S. Patent No. 8,313,023
`
`(assigned CBM2014¬00095);
`
`1519
`
`Patent Owner's Preliminary Response (Paper No. 14), in Covered
`
`Business Method Patent Review of U.S. Patent No. 835113550
`
`(assigned CBM2014¬00096)
`
`1520
`
`USPTO Assignment Records for U.S. Patent No. 8,523,063 (as of
`
`September 28, 2014)
`
`1521
`
`Wayback Machine archive dated August 16, 2000, for United Airlines
`
`web site: "Car Rental Partners"
`
`1522
`
`Wayback Machine archive dated June 20, 2000, for United Airlines
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`web site: "Cruise Partners"
`
`1523
`
`S&H Green Points - About S&H (available at
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`http://www.greenpoints.com/info/inf aboutsh.asp);
`
`1524
`
`Wayback Machine archive dated November 27, 1999, for Green Points
`
`
`
`vi
`
`
`
`"The Points You've Been Waiting For"
`
`1525
`
`Wayback Machine archive dated April 15, 1998 for American Airlines
`
`web site: “Welcome to AA.com”
`
`1526
`
`Security and Exchange Commission Letter from the Chief: Accountant
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`Issues Related to Internet Operations, October 18, 1999, available at
`
`http://www.sec.gov/info/accountants/staffletters/calt1018.htm
`
`1527
`
`The Emerging Issue Task Force of the Financial Accounting Standards
`
`Board ("FASB"), "Accounting for Points' and Certain Other Time-
`
`Based of Volume-Based Sales Incentive Offers, and Offers for Free
`
`Products or Services to be delivered in the future," Issue No. 00-22
`
`(2001), available at http: / /www.fasb.orglcs /BlobServer? Blobkey=id
`
`&blobnocache=true&blobwhere= 117 5 820904 620&blobheader= a-
`
`Dl2hcation/t)df&blobheadername2=Content-Length blobheadervalue1
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`=Content-Disposition&blobheadervalue2 = 79 5 6 3&blobheadervalue
`
`1= filenameabs00¬22.pdf&b1obco1 urldata&blobtableMungoBlobs
`
`1528
`
`Stone, et al., User Interface Design and Evaluation, Interactive
`
`Technologies (April 29, 2005)
`
`1529
`
`U.S. Patent No. 5,513,359
`
`
`
`vii
`
`
`
`1530
`
`George Bond, “Gateways to the Internet,” Byte Magazine, pp. 229-31
`
`(Sept. 1995)
`
`
`
`viii
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`PATENT OWNERS’ EXHIBITS
`
`IATA Special Report – The Price of Loyalty
`
`2001
`
`2002
`
`Definition of Commerce, from Oxford
`
`2003
`
`Definition of Partner, from Yahoo
`
`2004
`
`Definition of Loyalty Program, from Wikipedia
`
`2005
`
`An Open Economy in the Loyalty Rewards Space – Good for Whom
`
`2006
`
`Creative Business: Substitutes and Complements
`
`2007
`
`Strategic Report for Southwest Airlines
`
`2008
`
`Using Points.com to Combine Miles and Points: A Good Deal?
`
`2009
`
`Loyalty Traveler Examines Points.com Exchange Value
`
`2010
`
`Proprietary Programs vs. Coalition Loyalty
`
`2011
`
`Declaration of Independence?
`
`The Economics Behind Customer Loyalty: Using Coalition Program
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`2012
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`Assets to Turbo-Charge Results
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`2013 What Miles & Points are Worth: Airline Miles
`
`2014 MacLean Prosecution History Response of 12-02-2005
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`2015 MacLean Prosecution History Response of 08-23-2006
`
`2016 MacLean Prosecution History Response of 03-05-2008
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`2017 MacLean Prosecution History Response of 06-27-2011
`
`
`
`ix
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`
`
`Email 1: from Brian Buchheit to Justin Oliver and Frank DeLucia on
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`2018
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`December 12, 2014, 11:41 AM
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`2019
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`Email 2: Response to Email 1
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`Email 3: from Brian Buchheit to Justin Oliver on December 12, 2014,
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`12:11 PM
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`Email 4: from Justin Oliver and Frank DeLucia to Brian Buchheit on
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`December 22, 2014, 11:27 AM
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`Email 5: Response to Email 4 from Brian Buchheit to Justin Oliver and
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`Frank DeLucia on December 22, 2014, 1:06 PM
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`Email 6: Response to Email 5 from Justin Oliver and Frank DeLucia,
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`AskeladdenIPR, and Sean McGhie on December 23, 2014, 11:24 AM
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`Email 7: Response to Justin Oliver, AskladdenIPR and Sean McGhie
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`from Brian Buchheit on December 31, 2014, 10:44 AM
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`Email 8: From Justin Oliver to Brian Buchheit, AskeladdenIPR and
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`Sean McGhie on January 13, 2015, 6:15 PM
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`Email 9: Response to Justin Oliver, AskeladdenIPR and Sean McGhie
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`on January 14, 2015, 8:08 AM
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`IAM: New Banking Group Launches with Focus On Improving Patent
`
`Quality (available at: http://www.iam-magazine.com / Blog/ Detail.
`
`x
`
`2020
`
`2021
`
`2022
`
`2023
`
`2024
`
`2025
`
`2026
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`2027
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`
`
`
`
`2028
`
`2029
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`aspx?g=972d0d5d-d116-42fd-945d-82ac28c33b3a)
`
`Patent Quality Initiative FAQ (available at:
`
`http://www.patentqualityinitiative.com/about%20pqi/faq)
`
`Patent Quality Initiative Leadership Team (available at:
`
`http://www.patentqualityinitiative.com/about%20pqi/team)
`
`The Clearing House Executive Management (available at:
`
`2030
`
`http://www.theclearinghouse.org/about-tch/tch-executives/executive-
`
`management)
`
`The Clearing House Payments Executives (available at:
`
`2031
`
`http://www.theclearinghouse.org/about-tch/tch-executives/payments-
`
`executives)
`
`The Clearing House Association Executives (available at:
`
`2032
`
`http://www.theclearinghouse.org/about-tch/tch-executives/association-
`
`executives)
`
`Press Release: “Patent Quality Initiative Launched to Facilitate Better
`
`2033
`
`Patents and Fewer Disputes”
`
`Press Release: “Patent Quality Initiative Challenges the Validity of Five
`
`2034
`
`Patents by Filing Nine IPRs” (available at:
`
`http://www.patentqualityinitiative.com/news/press%20releases/2014_oct
`
`
`
`xi
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`
`
`%2024_nine%20i)
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`2035
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`U.S. Patent No. 8,595,055 to MacLean, et al.
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`xii
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`Pursuant to 37 C.F.R. § 42.207(a), the owners of U.S. Patent No. 8, 540,
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`152 (“the ‘152 patent”), Sean McGhie and Brian Buchheit ("Patent Owner"),
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`hereby submits the following Preliminary Response in response to the Petition
`
`for Inter Partes Review ("IPR") Review of the ‘152 patent; Ex 1001. The ‘152
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`patent is one of three related patents being challenged by the Petitioner in co-
`
`pending IPR petitions, the others being IPR2015-00122, IPR2015-00123,
`
`IPR2015-00125, IPR2015-00133, and IPR2015-00137. Patent owners request
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`that the Board determines the grounds of IPR2015-00124 are deficient for
`
`reasons stated herein.
`
`I.
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`CLAIM CONSTRUCTION
`
`
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`
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`The Petitioner’s claim construction defines the terms “entity”, “non-
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`negotiable credits,” and “entity independent funds.” For purposes of the
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`institution decision only, the Petitioner’s claim construction on these three terms
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`may be used by the Board. (see notes re: construction in preliminary response of
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`IPR2015-00123 regarding slight clarifications not believed relevant for the analysis
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`of institution approval/denial in this petition). Patent Owners expressly reserves the
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`right to challenge the claim construction asserted by the Petitioner should the IPRs
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`be instituted and should claim construction of these three terms be at issue at such
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`a time.
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`
`
`1
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`
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`
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`Additionally, the Patent Owner asserts that the term “commerce partner”
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`should be construed to mean “an entity that is an independent entity from another
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`entity, and associated with that other in some commercial activity.” This is
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`consistent in contest of the claims with Petitioner’s definition for “entity
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`independent funds” which are defined in claims 1, 8, and 13 as being different
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`loyalty points of the commerce partner. The term “commerce” is to be afforded
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`some meaning. A dictionary definition of "commerce" is "The activity of buying
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`and selling, especially on a large scale". Ex 2003. A dictionary definition of
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`"partner" is "One that is united or associated with another or others in an activity or
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`a sphere of common interest, especially: A member of a business partnership." Ex
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`2003. Thus, the ordinary meaning of "commerce partner" is: an entity that is
`
`associated with another in some commercial activity. Thus, the ‘063 patent defines
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`a commerce partner to mean: an entity that is an independent entity from another
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`entity, and associated with that other in some commercial activity.
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`
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`
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`II.
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`PETITION GROUNDS ARE REDUNDENT WITH PRIOR
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`PTAB DETERMINATIONS AND SHOULD NOT BE INSTITUTED
`
`AS A RESULT
`
`Case CBM2014-0096 was filed to challenge patent 8, 511, 550, which is a
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`patent having a common parent as the ‘152 patent. In CBM2014-0096, claims 1-3
`
`
`
`2
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`
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`and 5-7 were challenged on a 35 USC 102 basis that relied upon MacLean and on
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`35 USC 103 basis that relied on MacLean in view of Antonucci (a networked
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`loyalty program).
`
`
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`In the institution decision (page 8) the PTAB found that the only term
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`necessary for claim construction relevant to the institution decision were the
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`claimed terms “wherein an agreement exists between the entity and the commerce
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`partner.” There the Board determined that the broadest reasonable construction of
`
`these terms “requires that an agreement exists between an entity that provides
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`loyalty points and a commerce partner that provides different loyalty points.” The
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`Board then determined that that the 35 USC 102 and 103 challenges based on
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`MacLean were not to be instituted because MacLean lacked these claimed
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`limitations. Specifically, on page 15 of the Decision to not institute on 35 USC
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`102 grounds in the CBM2014-0096 determination, the Court noted that Patent
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`Owner asserts that MacLean lacks teachings for “an agreement exists between the
`
`entity and the commerce partner.” The Board also determined that this limitation
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`was not obvious in light of MacLean.
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`
`
`Claim 1 of the ‘152 patent includes the claimed limitation of “an entity
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`agreeing to permit transfers or conversions of non-negotiable credits to entity
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`independent funds, wherein the entity agrees to compensate a commerce partner by
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`paying an amount in cash or credit for each non-negotiable credit redeemed by the
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`
`
`3
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`
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`commerce partner.” Claim 7 includes “a commerce partner agreeing to permit
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`transfers or conversions of quantities of non-negotiable credits to entity
`
`independent funds.” in accordance with a fixed credits-to-funds ratio. Claim 13
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`includes “wherein an agreement exists between the entity and the commerce
`
`partner that permits transfers or conversions of non-negotiable credits to entity
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`independent funds, wherein the agreement specifies that the entity compensates the
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`commerce partner by paying an amount in negotiable funds for each non-
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`negotiable credit redeemed per the agreement.” The undersigned asserts that the
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`above limitations from claim 1, 7, and 13 of the ‘152 patent include the limitations
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`already decided by the PTAB to be absent from MacLean (“wherein an agreement
`
`exists between the entity and the commerce partner.” and already determined to be
`
`non-obvious in light of MacLean’s teachings).
`
`
`
`Nonetheless, for the cited portion of claim 1, the Petition relies on MacLean
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`(see page 37-38) that cites to FIG. 1, para 0042-0044, 0046-0048, 0051-0053,
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`0055-0056, 0062-0066, Abstract, 0023, 0017, 0020, 0041, FIG. 6A-6I, para 0027.
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`Thus, MacLean is relied on in the present petition for the teachings the same
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`(actually more narrow) limitations that those that the PTAB has already found is
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`lacking in MacLean and that are not obvious in light of MacLean.
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`
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`This petition is redundant with an already made determination by the PTAB
`
`in regard to claimed limitations and the MacLean reference and the present petition
`
`
`
`4
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`
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`should not be instituted as a result of this redundancy.
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`
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`
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`III. The Petition’s 35 USC 103 Grounds Are Deficient
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`
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`A. Combination of MacLean and Postrel is Improper
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`In the petition (pages 33-39), claims 1-6 and 12-20 are asserted as
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`unpatentable based on 35 USC 103 in view of a combination of MacLean and
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`Postrel. This combination is improper, so the relied upon grounds for claims 1-6
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`and 12-20 fail.
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`
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`To explain, MacLean provides teachings that bridge a strong boundary
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`between two different loyalty programs. These teachings require that each of two
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`or more programs establishes a deposit value and a withdrawal value for its points.
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`(para 0044, second sentence; para 0062, first sentence; para 0062 defining
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`withdrawal rate deposit rate and liability rate; para 0064, first sentence; para 0064,
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`last sentence; para 0021; para 0023, second sentence; para 0027; para 0031, last
`
`sentence; para 0037). Without the deposit and withdrawal rates being established
`
`that are baselined against a currency value, MacLean cannot function in
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`accordance with its declared principles of operation and MacLean cannot be used
`
`for its intended purpose.
`
`Postrel establishes a global universal network based rewards program (para
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`5
`
`
`
`
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`
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`0042, third sentence) that utilizes the infrastructure of a typical credit card network
`
`(abstract, first sentence; para 0026 defining this infrastructure). Postrel allows its
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`network points to be “branded” (para 0030) while leveraging existing contractual
`
`relationships of a credit card network (para 0031). The point information
`
`regardless of branding is held in a central server (para 0033). By leveraging the
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`credit card network, points must have a par value (para 0036, last sentence) and
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`points of the networked program are earned by a customer across many merchants
`
`(para 0036, first sentence). Points held in the central network are redeemed by
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`swiping a credit card (last sentence of para 0039) at a POS that allows the points to
`
`be used as cash equivalent at credit card accepting merchants (referenced against a
`
`cash equivalent value). If a person is willing to incur credit card ‘network’ fees,
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`branded merchant points can be unbranded and turned into credit card pre-paid
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`credit, which is referred to as exchange points (para 0043, last few sentences). A
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`person could lose points because of the transaction fees to ‘unbrand’ his or her
`
`points (first sentence of para 0045) because a merchant in the program typically
`
`pays the transaction fees (para 0052). Without points being fungible (thereby
`
`making them negotiable), they cannot be exchanged. The default fungibility of
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`points (last sentence of para 0036) and the fact that points have a cash equivalent
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`(para 0063 “The term point is used to reference any earned value that has a cash
`
`equivalent or negotiable worth …” is what allows the credit card network to be
`
`
`
`6
`
`
`
`utilized. Branding of points can permit a “fake” number of merchant specific
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`points to be attributed to a customer. Regardless of this branding, each point has a
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`cash value, which is what the centralized system really uses. In other words a
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`pizza business can brand a dollar’s worth of exchange points “1000 Pizza points”
`
`and a supermarket can brand a dollar’s worth of exchange points “200 SuperMart
`
`points” (FIG. 12), yet aggregating and redeeming these points will always be
`
`handled at two dollar worth (total) of exchange points each (see para 0043-0045).
`
`There may be ‘unbranding’ charges (see first sentence of para 0045 and para 0046)
`
`that is a service fee. These network points regardless of branding are accumulated
`
`in a network system that includes many different retailers that issue and redeem the
`
`network points. Aggregated network points are effectively pre-paid credit card
`
`currency that are accepted by every merchant that accepts credit card payments
`
`(para 0047). From Postrel’s teachings, all points (merchant or exchange) are
`
`handled as if they are pegged to a single currency value on a per point basis. This
`
`is what allows points to be treated like cash by the credit card network. All
`
`redemptions are cash equivalent exchanges, which are made using a credit card.
`
`
`
`Looking at the two references in context, MacLean cannot function unless
`
`each LP operator establishes a deposit and a withdrawal value, which are different
`
`valuations one greater than the liability value and one less than the liability value
`
`(para 0064). Postrel relies on a network of points across venders that are linked to
`
`
`
`7
`
`
`
`a credit card network. A single cash equivalent value must exist per point, else the
`
`credit card network cannot be leveraged. These are mutually exclusive and
`
`adverse teachings to each other. Postrel cannot function if there is no ‘stable’
`
`value for points (single cash equivalent value, as defined clearly in para 0063).
`
`MacLean cannot function unless there are two difference distinct LP operators
`
`(each setting two different valuations for points – a high value for selling points on
`
`an open market a low value for redeeming points for cash). In Postrel there is only
`
`one LP operator, the networks operator that handles branded and unbranded points.
`
`There is only one valuation of points in Postrel. Thus, it is clear that the required
`
`infrastructure and purpose of the teachings of MacLean and Postrel are different
`
`from each other and combinations are inappropriate under the obvious standards of
`
`35 USC 103.
`
`
`
`Turning to the Petition (page 32-33) Postrel is cited to overcome
`
`shortcomings with MacLean/Sakakibara related to terms of use and restrictions.
`
`The points of Postrel, however, are fundamentally different from those of MacLean
`
`as noted above. Thus, the petition is trying to improperly extract benefits of a
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`network loyalty point system and to apply them to sole source loyalty programs
`
`without reconciling the significant differences between these two types of
`
`programs. This is an apples to oranges type of comparison, as one of ordinary skill
`
`knows the difference between network programs and propriety ones (Ex. 2010
`
`
`
`8
`
`
`
`Proprietary programs vs. coalition loyalty; Ex. 2012 The economics behind
`
`Customer loyalty: using Coalition program assets to Turbo-charge results), which
`
`affects the suggested modification.
`
`
`
`Turning to the asserted “motivations”, Page 35 of the Petition asserts that the
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`modification being made of MacLean and Postrel is to overcome deficiencies with
`
`MacLean with regard to MacLean’s computers including one or more processors
`
`and computer programs stored on a memory. The Patent Owners will allow the
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`Board to take official notice (unchallenged) that MacLean’s computer inherently
`
`includes a processor and memory so that Postrel is not needed for this purpose.
`
`The motivation stated in page 35-36 to the extent that it provides support for
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`modifying MacLean’s system so that MacLean’s computers include a processor
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`and memory is moot.
`
`
`
`Page 34-35 inaccurately states “MacLean implicitly discloses “terms-of-use”
`
`and redeeming loyalty points under restrictions, by specifically referring to “terms
`
`and conditions” to which the points exchange is subjected (para 0041, 0048, 0052).
`
`The referenced terms of use are usage conditions between a user and a points
`
`exchange - those of transaction center 120. MacLean’s transaction center 120 is
`
`not a loyalty point operator. Hence, the transaction center cannot establish “terms
`
`of use” for a loyalty program, but only of an exchange. These teachings are
`
`different from the claimed limitations against which the teachings are referenced.
`
`
`
`9
`
`
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`The terms of use of Postrel (page 35) are for a networked loyalty program (and
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`activities occurring within that program boundary. The program is a single one,
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`which handles LP management and services for many merchants and customers.
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`Page 35 of the Petition states that MacLean/Sakakibara stated as “one or
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`ordinary skill in the art would have recognized that MacLean’s earning and
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`redemption of loyalty points, as combined with Sakakibara’s restrictions would be
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`in accordance with terms-of-use established by the respective loyalty program.
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`Each LP of MacLean has its own terms of use. The teachings of MacLean require
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`two restrictions (only) on each LP. Each LP must establish a withdrawal and a
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`deposit rate. These are established independently of each other (controlled only by
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`the loyalty point operator). LP operators do not necessary need a contract with the
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`transaction center of MacLean since the transaction center can buy and sell points
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`using cash and the LP established deposit and withdrawal rates (Ex. 2009, 2013).
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`No contracts are established between different ones of the LPs, as the points-to-
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`cash and cash-to-points transaction must involve the transaction center 120 else the
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`teachings of MacLean are not being followed.
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`
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`The petition on page 35 asserts “based on the explicit teachings of these
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`terms-of-use for loyalty programs of Postrel” that appears to be an attempt to
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`define a modification being made. This is an unclear, improperly defined
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`modification. The centralized network loyalty point system of Postrel does include
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`
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`10
`
`
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`terms of use. These are different by nature from those of MacLean’s transaction
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`center (which Postrel lacks). It is unknown what teachings of Postrel are being
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`added to MacLean in context.
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`
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`After this statement, page 35 of the Petition asserts “because such terms-of-
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`use would have established the participation guidelines for the customer.” The
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`only customer interactions of MacLean use terms of use of a transaction center,
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`which do establish participation guidelines – so the motivation does not address a
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`problem or a shortcoming present in MacLean. It is therefore improper as it
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`provides no incentive to one of ordinary skill to change the teachings of MacLean
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`from what is explicitly taught by MacLean itself. Page 35 of the Petition further
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`states “With these terms-of-use, a user follows the set of requirements for earning
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`and redeeming loyalty points, avoiding confusion during the process”. Again, this
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`assertion does not address any deficiency of MacLean. MacLean’s process doesn’t
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`confuse members (in any manner alleviated by Postrel).
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`
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`Page 39 of the Petition states that both MacLean and Postrel inherently
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`include teachings of dependent claim 12. If so, there is no reason to modify the
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`teachings of MacLean with those of Postrel since there is no deficiency specific to
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`the claims that is being overcome by a modification. Then, a statement that it
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`would be obvious to modify MacLean with a “web based redemption option such
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`as the VISA catalog links from Postrel” is stated even though we don’t claim VISA
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`
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`11
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`
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`catalog links. This appears to be a modification attempted unrelated to the
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`claimed limitations. Further, MacLean’s teachings are directed to a transaction
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`server that is not a loyalty program. This transaction server doesn’t provide any
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`redemption options (at all – is silent in this regard), unless one would consider the
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`first stage of the two stage conversion process (where the transaction center
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`receives cash from the depositing issuer for points) a “redemption”. This
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`redemption does use a Web site (as shown in MacLean’s figures”. Hence, the only
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`redemption option of MacLean does use a Web site so no modification of
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`MacLean’s teachings is merited. Page 39 then states “because combining
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`references would provide users with a more convenient and efficient experience
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`with greater/more convenient redemption operations by virtual of the linked
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`catalog.” First, this motivation provides generic terms of degree (more convenient,
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`more efficient, greater) that are ambiguous to the point of lacking meaning.
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`Basically, the motivation is saying “we should add something undefined from
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`Postrel because then MacLean would do more (depending on what we added).
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`This is an improper motivation. It is uncertain whether the linked catalog is being
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`added to the transaction center’s exchange, or is being proposed to be added to an
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`individual LPs program. With regards to the transaction center, this would be a
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`significant departure from MacLean’s teachings (the transaction center does not
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`redeem points other than the conversion of points to cash in the two-stage process
`
`
`
`12
`
`
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`mentioned above) and actually functions in a consumer role (with regard to
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`performing transactions on a customer’s behalf using the deposit and withdrawal
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`rates established by individual LPs). This modification is flawed for many reasons
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`and fails as a result.
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`
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`Since the grounds of rejection fail to provide a proper motivation to combine
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`Postrel with MacLean/Sakakibara, the grounds fail, and claims 1-6 and 12-20 are
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`not properly rejected on 35 USC 103 grounds based on MacLean in view of
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`Sakakibra in view of Postrel. The Patent Owners assert that the Board should
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`not institute on the Petition asserted 103 grounds on this basis.
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`
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`Moreover, the asserted grounds rely on aspects of Postrel inconsistent with
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`any asserted motivations. Thus, portions of Postrel are being relied upon in the
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`grounds that require modifications of MacLean, for which no motivation is
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`provided. Page 43 cites to para 0004, 0009, 0030of Postrel where the relied upon
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`citations are unrelated to the transaction center of MacLean and unrelated to the
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`individual LP operators of MacLean, yet which are specific to a centralized
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`network program that leverages a credit card infrastructure. Page 48 cites to para
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`0047, 0049 of Postrel for teachings related to “wherein the computer for the
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`different loyalty program performs the detecting of the communicating, the
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`granting of the new quantity of entity independent funds, and the redeeming of at
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`least a portion of the entity independent funds within a single human-to-machine
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`
`
`13
`
`
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`interaction session” these teachings are unrelated to “terms of use” or any other
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`asserted motivation for modifying the teachings of MacLean. Page 54 cites to
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`paragraphs 0032 of Postrel for limitations of “wherein said non-negotiable credits
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`and the entity-independent funds have different restrictions-on-use established by
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`the terms-of-use of the loyalty program and established by terms-of-use of the
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`different loyalty program.” From the Petitioners own claim construction, the term
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`entity independent funds requires a definition of “funds acceptable as payment by
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`at least one entity different from the original granting entity of the non-negotiable
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`credits” The granting entity of the credits per Postrel is the centralized loyalty
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`point system that leverages the credit card infrastructure. Thus, the context for
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`citing Postrel is inconsistent with the claimed limitations themselves and/or is
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`inconsistent with the motivation provided for modifying the teachings of MacLean.
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`
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`Rejections of claims 1, 7, and 13 rely on teachings from Postrel for which no
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`proper motivation has been provided. This reliance is therefore improper and the
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`asserted grounds of rejection in the Petition for claims 1-6; 12-20 fail as a result.
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`The Patent Owners assert that the Board should not institute on the Petition
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`asserted 103 grounds on this basis.
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`
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`B. Combination of MacLean and Sakakibara is Improper
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`As already noted, MacLean relies on actions taken by a transaction center
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`14
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`
`
`
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`
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`that require two different LPs to independently establish a deposit and withdrawal
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`rate. (Ex. 2008, 2009) No such rate exists or is used by Sakakibara. Sakakibara is
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`not intended to function using such a rate – any modification of Sakakibara
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`requiring this modification is unsupported/unsupportable. No proper motivation to
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`modify the teachings of MacLean using Sakakibara is provided in the petition.
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`
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`Claims 7-11 have been rejected based on a combination of MacLean and
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`Sakakibara. The petition fails to identity any deficiencies in the teachings of
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`MacLean that are overcome by the teachings of Sakakibara page 17 instead asserts
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`that the teachings of Sakakibara are redundant with those of MacLean. The
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`Bottom of page 17 states that “one of ordinary skill would have recognized that
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`MacLean’s individual merchant loyalty points would preferably have been
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`accepted only by the merchant, and would not have been accepted as payment with
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`another merchant.” There appears to be no reason for this statement. In fact,
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`explicit teachings of MacLean (para 0040, last sentence) contradict this asserted
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`preference in stating that MacLean contemplates and functions equally well with
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`currency.
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`
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`The Petition then states that Sakakibara relies of “general principles of
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`loyalty points” ignoring the fact that the specific principles of loyalty points relied
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`upon by both references (to serve their intended purpose) are different. The
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`petition states that both references describe withdrawing points from one loyalty
`
`
`
`15
`
`
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`program account and converting them to another loyalty program’s points, which
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`is a high-level statement ignoring specifics required to do this function (specifics
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`of which are relied upon in asserting the art against claimed limitations). The
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`petition finally states that “While MacLean does not state in detail that loyalty
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`points issued by a merchant are only accepted as payment by that merchant, this
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`was a well understood feature of loyalty points clarified by Matthew Calman as
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`evidenced by Sakakibara. From the above, it is clear that at best, the petition is
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`asserting (pages 17-18) that MacLean is to be modified so that each of MacLean’s
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`LP programs does not permit transfers of points without being converted by the
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`transaction unit of MacLean using the deposit and withdrawal rates established by
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`MacLean. No attempts to modify MacLean further are supported by the
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`motivation provided. The “well understood” principles also appear to be applied at
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`a level of granularity significantly higher than that of the attempted modification
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`(which is not clearly stated). No other motivation is asserted against claims 8-9
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`and 12 for combining MacLean and Sakakibra.
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`
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`A different motivation is presented on pages 19-20 specifical
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