`
`BEFORE THE PATENT TRIAL AND APPEAL
`
`BOARD
`
`FEDERAL RESERVE BANK OF ATLANTA , FEDERAL RESERVE
`
`BANK OF BOSTON, FEDERAL RESERVE BANK OF CHICAGO,
`
`FEDERAL RESERVE BANK OF CLEVELAND, FEDERAL
`
`RESERVE BANK OF DALLAS, FEDERAL RESERVE BANK OF
`
`KANSAS CITY, FEDERAL RESERVE BANK OF MINNEAPOLIS,
`
`FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE
`
`BANK OF PHILADELPHIA, FEDERAL RESERVE BANK OF
`
`RICHMOND, FEDERAL RESERVE BANK OF SAN FRANCISCO,
`
`and FEDERAL RESERVE BANK OF ST. LOUIS,
`
`Petitioners,
`
`V.
`
`BOZEMAN FINANCIAL LLC,
`
`Patent Owner.
`
`Case No.: CBM2017-00036
`
`US. Patent No. 8,768,840
`
`PATENT OWNER’S CONTINGENT MOTION TO AMEND UNDER
`
`37 C.F.R.
`
`42.121
`
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`
`PO. Box 1450
`
`Alexandria, Virginia 223 13-1450
`
`
`
`I.
`
`INTRODUCTION
`
`This contingent motion to amend is submitted in compliance with 37 C.F.R.
`
`§42.121. If any of original claims 1 through 20 of US. Patent No. 8,768,840 (the
`
`“‘840 Patent”) are found unpatentable, the Board is requested to cancel such claim
`
`or claims and replace each with the corresponding proposed substitute claim or
`
`claims. See 37 C.F.R. §42.22(a)(2); 35 U.S.C. § 316(d).
`
`Proposed substitute independent claims 21, 28 and 35 amend the corresponding
`
`original independent claims 1, 8 and 15 to expressly identify the novel and non-
`
`obvious aspects of the Universal Positive Pay Database (“UPPD”) as the database
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`utilized in the computerized system claimed in substitute independent claims 21, 28
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`and 35, as well as further characterize the various file formats (i.e. Issue File and
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`Positive Pay File Formats) which coincide with each other in order to verify the
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`parameters of the financial transactions being cleared. Claims 2-7 which depend
`
`from original claim 1, claims 9 - 14 which depend from original claim 8, and claims
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`16 - 20 which depend from original claim 15, would be unchanged in scope, and
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`would depend from corresponding proposed substitute independent claims 21, 28
`
`and 35. See Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-
`
`0419, Paper 32 at 2 (PTAB Mar. 7, 2014)(when independent claim cancelled and
`
`replaced with substitute claim, an unchanged dependent claim retains its same scope
`
`and need not be rewritten as substitute claim); ZTE Corporation et al.
`
`v.
`
`
`
`ContentGuard Holdings Inc., IPR2013-00136, Paper 33 at 3-4 (PTAB Nov. 7,
`
`2013)(not necessary to present unchanged dependent claims as substitute claims
`
`when substituting for independent claim).
`
`Patentee has satisfied the conference requirement of 37 CPR. § 42.221(a).
`
`
`
`II.
`
`CLAIM LISTING
`
`The following is a complete listing of the proposed claim amendment with a correlation of
`
`the substitute claim to the original claim. See C.F.R. 1142.121(b).
`
`Listing of Proposed Conditional Substitute Claims
`
`21.
`
`A computer implemented method for detecting fraud in an electronic financial
`
`transactions transaction at intermediate points during a payment clearing process of said electronic
`
`financial transaction, comprising a computerized system which comprises a Universal Positive Pay
`
`Database, said method comprising:
`
`
`receiving through one of a payer, a payer bank an online account and a third party, a
`
`first record of an electronic financial transaction in Positive Pay File Format from at least one of the
`
`following group:
`
`a—payer; a point-of—sale terminalraaa—online—aeeolmt; and a portable electronic device;
`
`storing on a computer usable medium in a—database said Universal Positive Pay
`
`Database a first record in Issue File Format which is converted from and coincides with said Positive
`
`Pay File Format, said Universal Positive Pay Database contemporaneously accessible upon such
`
`storage to each party to said payment clearing process of said electronic financial transaction, said
`
`first record of said electronic financial transaction, said first record comprising more than one
`
`parameter;
`
`receiving at said database Universal Positive Pay Database in a file format coinciding
`
`with said Issue File Format at least a second record of said electronic financial transaction from one
`
`or more of a payee bank and any other party to said payment clearing process as said electronic
`
`transaction moves along said payment clearing process, wherein said second record comprises at
`
`4
`
`
`
`least one parameter which is the same as said more than one parameter of said first record;
`
`each of said first and second records received at said Universal Positive Pay Database
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`comprise at least two of the same said more than one parameters;
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`automatically determining by a @ computer when there is a match between at least
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`two of said parameters of said second record of said first financial transaction received at said
`
`database and the same parameters of said first record of said financial transaction stored in said
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`database, and wherein any party to said payment clearing process is capable of verifying said
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`parameters at each point along said financial transaction payment clearing process;
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`dypamically sending via at least one of said a point-of—sale terminal and said portable
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`electronic device a notification to said payee bank participant with authorization to process said
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`electronic financial transaction when said parameters match; and
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`dypamically sending via at least one of said a point-of—sale terminal and said portable
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`electronic device a notification to said payee bank participant to not process said electronic financial
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`transaction when said parameters do not match; and
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`in response to said notification, either dmamically or selectively via said
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`computerized system permitting or disallowing said transaction to proceed through said pament
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`clearance process.
`
`22.
`
`The computer implemented method of claim -1- A for detecting fraud in
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`financial transactions, wherein said parameters include at least two of the following:
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`check number, amount, account number, routing number, issue date, and payee.
`
`23.
`
`The computer implemented method of claim l A for detecting fraud in
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`financial transactions, wherein said first financial transaction may be at least one of check payment,
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`credit card payment, debit card payment, and electronic payment.
`
`5
`
`
`
`24.
`
`The computer implemented method of claim l A for detecting fraud in
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`financial
`
`transactions, wherein said database receives said first record of said first financial
`
`transaction from one of the following:
`
`a point of sale (POS), a point of presentment (POP), a point of encashment (POE), a
`
`point of data (POD), an automated teller machine, an online account, an intemet point of sale, and a
`
`mobile device.
`
`25.
`
`The computer implemented method of claim -1- A for detecting fraud in
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`financial transactions, wherein said computer performs at least two of the following steps:
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`archiving check register information in a record, storing check register information in
`
`a record, matching data in a record, verifying data in a record, and authenticating data in a record.
`
`26.
`
`The computer implemented method of claim -1- A for detecting fraud in
`
`financial transactions, wherein said computer performs the step of compiling a behavior matrix for a
`
`payer based upon the financial transaction records of said payer stored in said database.
`
`27.
`
`The computer implemented method of claim -1- A for detecting fraud in
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`financial transactions, wherein said computer performs the step of authenticating said record of said
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`first financial
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`transaction received from a participant in said payment clearing process with
`
`information in said first record and communicating to said participant results of said authenticating.
`
`28.
`
`A computer implemented method for detecting fraud in a—eheeleelearin-g
`
`preeess an electronic check clearing process, at intermediate points during said check clearing
`
`process of said electronic financial transaction, comprising a computerized system which comprises
`
`a Universal Positive Pay Database, said method comprising:
`
`providing a—eemputer—having—a access to said Universal Positive Pay Database
`
`accessible by each participant to said check clearing process;
`
`6
`
`
`
`receiving at said computer computerized system a first record of a check in Positive
`
`Pay File Format from a payer including check register information;
`
`stefliig—in—said—database storing in said Universal Positive Pay Database in Issue File
`
`Format, which coincides with said Positive Pay File Format, said first record of said check received
`
`by said payer, said first record comprising at least two of the following parameters:
`
`a check number, a date issued, a payee, a routing number, an account number, and an
`
`amount;
`
`providing a network interface to said Universal Positive Pay Database accessed by
`
`one or more participants in said check clearing process selected from the group comprising:
`
`a payee of said check, a payee bank, a payer bank, banking institutions intermediate
`
`said payee bank and said payer bank, a clearing bank, a Federal Reserve Bank, and a third party
`
`processor;
`
`enabling said one or more participants in said check clearing process to electronically
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`communicate separately with said Universal Positive Pay Database via said network interface as said
`
`check moves along said check clearing process;
`
`receiving at said Universal Positive Pay Database from said at least one or more
`
`participants in said check clearing process a second record in a file format coinciding with said Issue
`
`File Format of said check, said second record comprising at least two of the following parameters:
`
`a check number, a date issued, a payee, a routing number, an account number, and an
`
`amount, and wherein any participant in said check clearing process is capable of verifying said
`
`parameters at each point along said check clearing process;
`
`determining by said computer computerized system correspondence between said
`
`parameters of said first record and said parameters of said second record of said check;
`
`7
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`
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`providing an a dflamic electronic notification to said participant via said interface,
`
`wherein said notification includes results of said correspondence determination;
`
`wherein said notification informs said participant via said interface to process said
`
`financial transaction when said first and second records correspond; and
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`wherein said notification informs said participant via said interface to not process said
`
`
`financial transaction when said first and second records do not correspond; and
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`in response to said notification, either dmamically or selectively via said
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`com uterized s stem ermittin or disallowin said transaction to roceed throu
`
`said a
`
`ent
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`clearance process.
`
`29.
`
`The computer implemented method of claim 8 E for detecting fraud in a
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`check clearing process, wherein said check may be at least one of written check payment, electronic
`
`check payment, imaged check payment, check card payment, and debit card payment.
`
`30.
`
`The computer implemented method of claim 8 Q for detecting fraud in a
`
`check clearing process, wherein said database receives said first record of said check from one of the
`
`following:
`
`a point of sale (POS), a point of presentment (POP), a point of encashment (POE), a
`
`point of data (POD), an automated teller machine, an online account, an intemet point of sale, and a
`
`mobile device.
`
`31.
`
`The computer implemented method of claim 8 E for detecting fraud in a
`
`check clearing process, wherein said computer automatically polls for check register information for
`
`receiving and storing on said database.
`
`32.
`
`The computer implemented method of claim 8 E for detecting fraud in a
`
`check clearing process, wherein said computer performs at least two of the following steps:
`
`8
`
`
`
`archiving check register information in a record, storing check register information in
`
`a record, matching data in a record, verifying data in a record, and authenticating data in a record.
`
`33.
`
`The computer implemented method of claim 8 E for detecting fraud in a
`
`check clearing process, wherein said computer performs the step of compiling a behavior matrix for
`
`a payer based upon checking account records of said payer stored in said database.
`
`34.
`
`The computer implemented method of claim 8 E for detecting fraud in a
`
`check clearing process, wherein said computer performs the step of authenticating said record of said
`
`check received from a participant in said check clearing process with information in said first record
`
`and communicating to said participant results of said authenticating.
`
`35.
`
`A computer implemented method for detecting errors in processing electronic
`
`financial transactions at intermediate points during a pament clearing process of said electronic
`
`financial transactions, comprising a computerized system which comprises a Universal Positive Pay
`
`Database, said method comprising:
`
`providing at least one eemputer computerized system comprising said Universal
`
`Positive Pay Database having a processor, an area of main memory, and a storage device having a
`
`database, wherein said database is accessible by each participant involved in said processing of said
`
`financial transactions;
`
`storing in said database in Issue File Format which coincides with a Positive Pay File
`
`Format records of said financial transactions relating to payments, eemprising wherein each financial
`
`transaction comprises at least a first record of a—first said financial transaction received from at least
`
`one participant to said processing of said financial transaction in said Positive Pay File Format, said
`
`first record received from a source selected from the following group:
`
`
`
`a payer, a point of sale terminal, an online account, and a portable electronic device,
`
`each financial transaction record including more than one parameter;
`
`receiving at said computer computerized system a second record of said first financial
`
`transaction in a format coinciding with said Issue File Format from a bank of first deposit as said first
`
`financial transaction moves through said error detection process, said second record including at least
`
`some of said more than one parameters that are in said first record of said first financial transaction;
`
`determining by said computer computerized system whether there is a match between
`
`at least one of said parameters of said second record of said first financial transaction received at said
`
`computer and one of the same parameters in said first record of said first financial transaction stored
`
`in said database, and wherein any participant in said processing of said financial transaction is capable
`
`of verifying said parameters at each point along said error detection process;
`
`providing a dmamic notification to said bank of first deposit with results from said
`
`matching of said parameters of said second record with said parameters of said first record; and
`
`providing a dmamic notification to said payer with results from said matching:,' and
`
`in response to said notification, either dypamically or selectively via said
`
`computerized system permitting or disallowing said transaction to proceed through said pament
`
`clearance process.
`
`36.
`
`The computer implemented method of claim 4% 3_5 for detecting errors in
`
`processing financial transactions, wherein said first financial transaction may be at least one of a
`
`check payment, a credit card payment, a debit card payment, a funds transfer payment and an
`
`electronic payment.
`
`10
`
`
`
`37.
`
`The computer implemented method of claim «1% g for detecting errors in
`
`processing financial transactions, wherein said database receives said first record of said first
`
`financial transaction from one of the following:
`
`a point of sale (POS), a point of presentment (POP), a point of encashment (POE), a
`
`point of data (POD), an automated teller machine, an online account, The computer implemented
`
`method of claim 15 for detecting errors in processing financial transactions, wherein said first
`
`financial transaction may be at least one of a check payment, a credit card payment, a debit card
`
`payment, a fimds transfer payment and an electronic payment.
`
`38.
`
`The computer implemented method of claim 46 3_5 for detecting errors in
`
`processing financial
`
`transactions, wherein said computer automatically polls check register
`
`information for receiving at said computer and storing on said database.
`
`39.
`
`The computer implemented method of claim 46 3_5 for detecting errors in
`
`processing financial transactions, wherein said computer performs at least two of the following steps:
`
`archiving check register information in a record, storing check register information in
`
`a record, matching data in a record, verifying data in a record, and authenticating data in a record.
`
`40.
`
`The computer implemented method of claim 4% g for detecting errors in
`
`processing financial transactions, wherein said computer compiles a behavior matrix for a payer
`
`based upon financial transaction records of the payer stored in said database.
`
`11
`
`
`
`III.
`
`SCOPE OF THE SUBSTITUTE CLAIMS
`
`The proposed substitute claims present three substitute independent claims
`
`for the cancelled original independent claims, satisfying the general presumption
`
`that “only one substitute claim would be needed to replace each challenged claim.”
`
`See 37 C.F.R. §42.121(a)(3). The Listing of Proposed Conditional Substitute
`
`Claims 21 — 40 above show each of the substitute claims and the black-lined
`
`comparison to the Original Claims
`
`The proposed substitute claims are not broader than the original claims. The
`
`substitute claims include all limitations of original claims and additional clarifying
`
`language. The insertion of the terms “Universal Positive Pay Database,” “Issue File
`
`Format” and “Positive Pay File Format” appearing in the substitute independent
`
`claims present limitations with filrther clarify the novel and non-obvious aspects of
`
`the database and file formats of the financial records which are transformed during
`
`the payment clearing process of the invention. This is implicit in the claim as a
`
`whole in view of the patent specification, and is inserted for proper antecedent basis
`
`for the inserted phrase “does not result in action to the content.”
`
`The proposed substitute claims therefore comply with 37 C.F.R. §42.121(ii).
`
`IV.
`
`SUPPORT FOR THE SUBSTITUTE CLAIMS
`
`Support for the proposed substitute claims from the original disclosure of the
`
`‘840 Patent and from each earlier-filed disclosure for which benefit of the earlier
`
`12
`
`
`
`filing date of at least as early as June 21, 2004, is sought is provided below. See 37
`
`C.F.R. §§42.121(b)(1)-(2).
`
`Support for the substitute claims in the original application for the ‘840 Patent,
`
`Application No. 13/507,387, filed June 25, 2012, can be found at Column 5, line 29
`
`though Column 6, line 62. See, for example, the UPPD Database, Issue File and
`
`Positive Pay File formats. See also Colum 22 lines 61 through 67 and Column 23,
`
`lines 1 through 4 which supports the automatic or instantaneous transaction clearing
`
`pI'OCCSS.
`
`V.
`
`THE SUBSTITUTE CLAIMS ARE PATENTABLE
`
`1. The Closest Known Prior Art
`
`The Federal Reserve Banks of the United States (“FED”) filed a Petition for
`
`Covered Business Method Review under the Leahy-Smith America Invents Act
`
`(“AIA”) regarding claims of the ‘840 patent. (Paper 1.) On July 24, 2017, the Board
`
`entered a Decision instituting covered business method patent review on Claims 1-
`
`20 for grounds of invalidity based on Section 101. Paper 17.
`
`The FED cites to the ‘840 Patent’s Description of the Prior Art” section as
`
`evidence of Section 101 Patentability by stating that the ‘840 Patent discloses
`
`numerous computerized prior art systems “capable of performing this abstract idea”
`
`for the position that the Independent Claims 1,8 and 15 are directed to an abstract
`
`13
`
`
`
`idea, EX. 2, Petition for Covered Business Method Review at 48:
`
`“Many techniques have been developed to inhibit check fraud,
`
`such as Positive Pay. . .. Positive Pay is a technique where each
`
`corporate customer sends an electronic list of their outstanding
`
`checks to their financial institution. The corporate customer’s
`
`financial institution then uses an Issue File to validate each check
`
`as it clears the financial institution. . .. If a check does not validate
`
`correctly — the financial institution requests proper authorization
`
`from the corporation on how to handle the check.” Ex. I, ‘840
`
`Patent. at 1:57-60, 2:4-14.
`
`“The Doggett et a1. method and apparatus are associated
`
`essentially with a bank specific Positive Pay system wherein
`
`all parties are able to verify check register information of a
`
`customer, e.g., a payer, at every point along the path of a check
`
`clearing process, e.g., at the point of sale, at the payee’s bank, at
`
`a Federal Reserve Clearing Division or a clearing house, and at
`
`the payer’s bank.” Id. at 3:34-42.
`
`“U.S. Pat. No. 5,801,366 issued Sep. 1, 1998 to Wade L. Funk et
`
`al., outlines the use of an automated check processing system
`
`which includes an input device receiving checking account
`
`information and a check amount of a check provided for
`
`payment in a transaction. A transaction database coupled to the
`
`input device then electronically receives and stores the checking
`
`account information and check amount, which are
`
`then downloaded to a power encoder. The power encoder
`
`receives checking account information and check amounts for
`
`14
`
`
`
`transactions occurring over a predetermined transaction period
`
`and then matches the checks with the electronic checking
`
`account information and check amounts.” Id. at 3:47-58.
`
`0 “The Funk et a1. system is similar to the system described by
`
`Doggett et al., in that Funk et al. describes a bank specific
`
`Positive Pay system wherein all parties are able to verify
`
`check register information of a customer at every point along
`
`the path of a check clearing process.” Id. at 3:59-65.
`
`Patentee respectfully submits that none of the existing independent
`
`claims 1, 8 or 15, or the corresponding proposed substitute independent claims 21, 28
`
`or 35, are anticipated by nor are obvious in View of any of the art cited by Petitioner.
`
`Specifically, none of the cited are teach or suggest a system or method which is
`
`capable of processing a financial transaction which includes all of the limitations of
`
`the original or proposed substitute claims. Specifically, the prior art does not teach
`
`the UPPD database, nor the Issue File or Positive Pay formats as described in the
`
`claims.
`
`As the above discussion demonstrates, at the time of the invention of the ‘840
`
`patent, numerous approaches had been proposed for processing financial transaction,
`
`but none were contemplated in the prior art with all of the limitations included in
`
`Patentee’s original or proposed substitute claims.
`
`Any combination of the references would also not have led one of ordinary
`
`skill in the art to the subject matter of the proposed substitute claims. None disclose
`1 5
`
`
`
`the financial transaction
`
`Patentee is also unaware of any evidence, such as market forces, or motivation
`
`to implement any of the prior art references in different ways.
`
`Accordingly, the subject matter of proposed substitute claims 21 - 40 would
`
`not have been anticipated or obvious at the time the invention was made to a person
`
`having ordinary skill in the relevant art.
`
`VI. CONCLUSION
`
`For the foregoing reasons, the Patentee respectfully requests that the Board
`
`grant its Contingent Motion to Amend and, further, that the Board enter a finding
`
`that the substitute claims 21 - 40 are patentable over the prior art of record.
`
`Respectfully submitted, this 17th day of October 2017.
`
`
`/John W. Goldschmidt Jr./
`
`John W. Goldschmidt, Jr.
`Registration No: 34,828
`FERENCE & ASSOCIATES LLC
`
`409 Broad Street
`
`Pittsburgh, Pennsylvania 15143
`Telephone: (412) 741-8400 x227
`
`/Thomas J. Maiorino/
`
`Thomas J. Maiorino
`
`Maiorino Law Group LLC
`224 Amberfield Dr
`
`Mount Laurel, NJ 08054
`Telelephone: (609) 760-7360
`
`ATTORNEYS FOR RESPONDENT PATENT OWNER
`
`16
`
`
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`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on this 17th day of October 2017, a true and
`
`correct copy of the foregoing PATENT OWNER RESPONSE, together with all
`
`exhibits and testimony relied upon, were served by on the attorney of record for the
`
`petitioner at the following electronic address of record: nmoffitt@kslaw.com,
`
`hhawkins kslaw.com a arsons kslaw.com and ATLIPdocketin
`
`kslaw.com.
`
`Natasha H. Moffitt
`
`Reg. No. 53,340
`KING & SPALDING LLP
`
`1180 Peachtree Street, NE
`
`Atlanta, GA 30309
`Tel.: (404) 572-4600
`Fax: (404) 572-5134
`Email: nmoffitt@kslaw.com
`
`This 17th day of October 2017
`
`
`/John W. Goldschmidt Jr./
`
`John W. Goldschmidt, Jr.
`Registration No: 34,828
`FERENCE & ASSOCIATES LLC
`409 Broad Street
`
`Pittsburgh, Pennsylvania 15143
`Telephone: (412) 741-8400 x227
`Facsimile: (412) 741-9292
`
`/Thomas J. Maiorino/
`
`Thomas J. Maiorino
`
`Maiorino Law Group LLC
`224 Amberfield Dr
`
`Mount Laurel, NJ 08054
`Telephone:
`(609) 760-7360
`
`ATTORNEYS FOR RESPONDENT PATENT OWNER
`
`l7
`
`