throbber
Paper 7
`Trials@uspto.gov
`571-272-7822 Entered: June 13, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PAYPAL, INC.,
`Petitioner,
`
`v.
`
`MONEYCAT LTD.,
`Patent Owner.
`____________
`
`Case IPR2017-00542
`Patent 8,712,918 B2
`____________
`
`
`
`Before SALLY C. MEDLEY, WILLIAM V. SAINDON, and
`BRYAN F. MOORE, Administrative Patent Judges.
`
`MEDLEY, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`I. INTRODUCTION
`
`PayPal, Inc. (“Petitioner”) filed a Petition for inter partes review of
`
`claims 1–23 of U.S. Patent No. 8,712,918 B2 (Ex. 1001, “the ’918 patent”).
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`Paper 1 (“Pet.”). MoneyCat Ltd. (“Patent Owner”) did not file a Preliminary
`
`Response. Institution of an inter partes review is authorized by statute when
`
`“the information presented in the petition . . . and any response . . . shows
`
`that there is a reasonable likelihood that the petitioner would prevail with
`
`respect to at least 1 of the claims challenged in the petition.” 35 U.S.C.
`
`§ 314(a); see 37 C.F.R. § 42.108. Upon consideration of the Petition, we
`
`conclude the information presented shows there is a reasonable likelihood
`
`that Petitioner would prevail in establishing the unpatentability of claims 1–
`
`23 of the ’918 patent.
`
`A. Related Matters
`
`The parties identify several matters related to this proceeding. Pet. 5;
`
`Paper 4 (Patent Owner’s Mandatory Notices), 1–2.
`
`B. The ’918 Patent
`
`The ʼ918 patent is directed to a method and system for electronic
`
`currency transactions. Ex. 1001, Abstract. The ’918 patent relates to
`
`electronic currency transactions that utilizes a server to mediate transactions
`
`between a buyer and seller over a network. See id. at Abstract, 15:63–16:40,
`
`Figure 7. The claimed invention purports to “eliminat[e] the problem of
`
`electronic theft of electronic currency, in systems employing an isolation
`
`server to effect currency transactions.” Id. at 6:1–4. Figures 6 and 7 of the
`
`’918 patent are reproduced below.
`
`2
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`
`
`Figure 6 illustrates a sum of electronic money, and Figure 7 represents
`
`an electronic currency transaction. Id. at 12:63–67.
`
`As shown in Figure 6, each data packet P1, P2, . . . Pi corresponds to
`
`an amount of electronic money. Id. at 14:36–42. Each packet Pi contains
`
`three components: a unique identifier UINi, which identifies packet Pi
`
`among all such data packets issued by a Currency Issuing Authority
`
`(“CIA”); the monetary value associated with packet Pi; and authentication
`
`data ADi to confirm that packet Pi was generated by the CIA. Id. at 13:20–
`
`25, 14:52–57, Fig. 6.
`
`As shown in Figure 7, user 1 interacts with provide 2 via the Internet
`
`(broken arrows) to effect a payment of electronic currency to provider 2. Id.
`
`at 15:63–16:4. User 1 has data packets Pi stored in an active data packet
`
`area of a data storage area accessible by a CIA server (“CIAS”). Id. at
`
`14:59–15:29. When user 1 and provider 2 decide upon a transaction, user 1
`
`instructs the CIAS to effect payment to provide 2 of the required sum on
`
`behalf of user 1. Id. at 15:65–16:4. In response, the CIAS accesses the
`
`3
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`active data packet area of user 1 to copy to local memory of the CIA one or
`
`more data packets Pi corresponding to the indicated sum, and delete or
`
`deactivate the packets Pi from the active data packet area. Id. at 16:13–18.
`
`The CIAS verifies the authentication data ADi of the packets Pi, and checks
`
`the identifiers UINi of the packets Pi against a database of previous
`
`transactions, to verify the packets Pi have not previously been used to effect
`
`payment. Id. at 16:26–31. If the CIAS verification is successful, the CIAS
`
`invalidates the packets Pi provided by user 1, and issues a new set of packets
`
`Pi for the same value to provider 2. Id. at 16:31–40.
`
`C. Illustrative Claim
`
`Petitioner challenges claims 1–23 of the ’918 patent. Claims 1 and 9
`
`are independent claims. Claim 1, reproduced below, is illustrative of the
`
`claimed subject matter:
`
`1. A method for effecting currency transactions between a
`first user and a second user over a network, the method
`comprising the following steps:
`
`A) a Currency Issuing Authority trusted server (CIAS)
`receives payment instructions from said first user to transfer a
`first monetary sum to said second user, wherein the CIAS is
`programmed to receive payment instructions from said first user
`only over a network connection between said first user and a
`Currency Issuing Authority (CIA);
`
`B) the CIAS accesses electronic currency in a first active
`electronic currency area located in a first data storage area, said
`electronic currency having been provided by said CIA;
`
`C) the CIAS manipulates the electronic currency located
`in said first active electronic currency area to withdraw a second
`monetary sum therefrom by
`
`(i) deleting electronic currency that equals the
`second monetary sum and/or
`
`4
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`(ii) generating a record containing information on
`the amount withdrawn that equals the second monetary
`sum and/or
`
`(iii) generating a record containing information on
`the amount of electronic currency remaining in said first
`active electronic currency area after withdrawing the
`second monetary sum; and
`
`the CIAS creates new electronic currency
`D)
`corresponding to a third monetary sum.
`
`Id. at 22:58–23:18.
`
`D. Asserted Grounds of Unpatentability
`
`Petitioner asserts that claims 1–23 are unpatentable based on the
`
`following grounds (Pet. 6–8):
`
`References
`
`Basis
`
`Challenged Claim(s)
`
`Teramura1 and Peirce2
`Teramura, Peirce, and
`Haynes3
`Teramura, Peirce, and
`Popolo4
`
`§ 103(a)
`
`1–3, 7–11, 15–17, and 19–23
`
`§ 103(a)
`
`4 and 12
`
`§ 102(e)
`
`5, 6, 13, 14, and 18
`
`II. DISCUSSION
`
`A. Prior Board Decision of Related Patent
`
`The application that matured into the ’918 patent claims, under 35
`
`U.S.C. § 120, the benefit of application 12/539,141, which matured into U.S.
`
`
`
`1 CA 2,221,399, issued June 11, 2002 (Ex. 1005) (“Teramura”).
`2 Michael Peirce and Donal O’Mahony, Scalable, Secure Cash Payment for
`WWW Resources with the PayMe Protocol Set, WORLD WIDE WEB JOURNAL
`at 587–601 (Nov. 1995) (Ex. 1005) (“Peirce”).
`3 PCT W0 97/19414, published May 29, 1997 (Ex. 1006) (“Haynes”).
`4 U.S. Patent No. 5,715,402, issued Feb. 3, 1998 (Ex. 1007) (“Popolo”).
`
`5
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`Patent No. 8,195,578 B2 (Ex. 1002, “the ’578 patent”). The ’578 patent was
`
`the subject of CBM2014-00093 (“CBM93”). In CBM93, the Board
`
`determined that (1) claims 1–3, 7–11, 15–17, and 19–22 of the ’578 patent
`
`are unpatentable under 35 U.S.C. § 103(a) as obvious over Teramura and the
`
`Admitted Prior Art NetCash System, and (2) claims 5 and 13 are
`
`unpatentable under 35 U.S.C. § 103(a) as obvious over Teramura, the
`
`Admitted Prior Art NetCash System, and Popolo. CBM93, Paper 51, 71.
`
`Petitioner contends that the claims involved in the ’918 patent “do no more
`
`than restate substantially the same limitations as those of the 578 patent.”
`
`Pet. 1 (citing Ex. 1004 ¶ 13). Petitioner further contends that Peirce
`
`describes the same features relied upon by the Board in the APA NetCash
`
`System. See, e.g., Pet. 15–16. On February 24, 2017, the Court of Appeals
`
`for the Federal Circuit issued a mandate affirming the Board’s
`
`determinations that claims 1–3, 5–11, and 13–23 of the ’578 patent are
`
`unpatentable as obvious under 35 U.S.C. § 103. Paper 6, 2.
`
`B. Claim Construction
`
`In an inter partes review, we construe claim terms in an unexpired
`
`patent according to their broadest reasonable construction in light of the
`
`specification of the patent in which they appear. 37 C.F.R. § 42.100(b).
`
`Consistent with the broadest reasonable construction, claim terms are
`
`presumed to have their ordinary and customary meaning as understood by a
`
`person of ordinary skill in the art in the context of the entire patent
`
`disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
`
`2007).
`
`6
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
` “Currency Issuing Authority trusted server (CIAS)”
`
`Petitioner argues that in CBM93, “Currency Issuing Authority trusted
`
`server (CIAS)” was interpreted to mean “a server that is trusted by the
`
`Currency Issuing Authority (‘CIA’).” Pet. 11. Petitioner submits that the
`
`same meaning for the phrase should be given in this proceeding. We agree.
`
`For purposes of this proceeding, “Currency Issuing Authority trusted server
`
`(CIAS)” is interpreted to mean “a server that is trusted by the Currency
`
`Issuing Authority (‘CIA’).”
`
`At this juncture of the proceeding, we determine that it is not
`
`necessary to provide an express interpretation of any other term of the
`
`claims.
`
`B. Asserted Obviousness over Teramura and Peirce
`
`Petitioner contends claims 1–3, 7–11, 15–17, and 19–23 are
`
`unpatentable under 35 U.S.C. § 103(a) as obvious over Teramura and Peirce.
`
`Pet. 18–61. In support of its showing, Petitioner relies upon the declaration
`
`of Dr. Clifford Neuman. Id. (citing Ex. 1004).
`
`1. Teramura
`
`Teramura describes a method and system for electronic trading that
`
`employs a broker server to send electronic money in two steps, including
`
`“sending of electronic money from the terminal of the consumer to the
`
`broker server and sending of electronic money from the broker server to the
`
`server of the merchant.” Ex. 1005, Abstract. Figure 1 of Teramura is
`
`7
`
`reproduced below.
`
`
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`Figure 1 of Teramura is a schematic diagram illustrating an electronic
`
`
`
`trading system.
`
`Figure 1 depicts a system including consumer terminal 10, merchant
`
`server 20, and broker server 30, which are connected over a communication
`
`network. Id. at 8:3–10. According to Teramura, “unjust transactions,” such
`
`as theft and fraud may be a particular problem with electronic currency. Id.
`
`at Abstract, 3:2–18. To address this problem, Teramura describes a
`
`transaction approach in which broker server 30 temporarily stores electronic
`
`money received from consumer terminal 10, and sends the electronic money
`
`to merchant server 20 when a predetermined settlement condition is brought
`
`into existence. Id. at Abstract.
`
`Figure 4 of Teramura is shown below.
`
`8
`
`
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`Figure 4 of Teramura depicts a flow of a transaction.
`
`When the buyer is ready to purchase an item, the buyer transmits an
`
`ordering message 4101 to broker server 30 through the communication
`
`network. Id. at 15:24–27, Fig. 4 (step 5001). The ordering message
`
`includes the details of the transaction and the electronic money with which
`
`the buyer intends to pay the merchant. Id. at 11:1–6, Figs. 2A and 2B.
`
`Upon receipt of the ordering message, broker server 30 generates data items
`
`representing the transaction in its memory—the broker information and
`
`trading and ordering information. Id. at 10:24–26, 11:6–11, 17:15–18.
`
`These data items are depicted in Figures 2A and 2B. Id. at 9:25–26, 10:27–
`
`9
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`28. The broker server then transmits an ordering notification to the
`
`merchant. Id. at 17:18–21, Fig. 5 (step 6003). The merchant confirms the
`
`ordering notification (id. at 21:2–12, Fig. 7 (step 8002)) and attempts to
`
`transmit the goods to the buyer (id. at 21:19–22, Fig. 7 (step 8003)). After
`
`transmitting the ordered goods, the merchant waits for the buyer to
`
`acknowledge receipt of the goods. Id. at 22:10–14, Fig. 7 (step 8004). If
`
`the buyer acknowledges receipt, the receipt is transferred to the broker and
`
`the broker releases the funds to the merchant. Id. at 22:15–17, 22:23–23:13.
`
`2. Peirce
`
`Peirce describes a system known as NetCash. Ex. 1013, 12. The
`
`NetCash system consists of buyers, merchants, and a currency server. Id.
`
`The currency server mints electronic coins. Id. Each coin includes the
`
`server name, server network address, the expiry date of the coin, serial
`
`number, and the coin value. Id. at 13. The currency server keeps track of
`
`serial numbers of all outstanding coins. Id. At the time of purchase, a coin’s
`
`serial number is verified by the currency server. Id. If the coin’s serial
`
`number is in the database, the coin has not been spent and is valid. Id.
`
`When the coin is verified, the serial number is removed from the database
`
`and the coin is replaced with a new coin. Id.
`
`3. Discussion
`
`Petitioner asserts that the combination of Teramura and Peirce
`
`describe all of the elements of claims 1–3, 7–11, 15–17, and 19–23. Pet. 28–
`
`61. Claim 1 is similar to claim 9 and is representative. As set forth above,
`
`claim 1 includes elements A), B), C), and D). Petitioner relies on Teramura
`
`to essentially meet all of the recited claim elements, but relies on Peirce to
`
`teach the claimed CIAS. In particular, Petitioner asserts that Teramura’s
`
`10
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`intermediary (the Broker server) holds a buyer’s electronic currency in
`
`escrow until a predetermined settlement condition is satisfied, and then
`
`transfers the electronic currency to the seller. Pet. 15. Petitioner further
`
`asserts that Peirce discloses a CIAS that issues electronic coins, keeps a
`
`database of valid coins, and deletes electronic coins from the database when
`
`the coins are redeemed. Id. Petitioner contends that when Teramura is
`
`modified in view of the teachings of Peirce, “the resulting combination is an
`
`integrated Broker-CIAS that receives electronic coins from a buyer,
`
`exchanges the coins for new ones, holds the new coins in escrow until the
`
`settlement condition is met, and, when the condition is met, transmits the
`
`new coins to the seller to effect payment.” Id. The Petition sets forth in
`
`detail how the combination of Teramura and Peirce describe all of the
`
`limitations of claims 1 and 9 and provides a rationale for combining
`
`Teramura and Peirce. Id. at 15–32, 39–47. For dependent claims 2, 3, 7, 8,
`
`10, 11, 15–17, and 19–23, the Petition similarly sets forth in detail how the
`
`combination of Teramura and Peirce describe all of the limitations of claims
`
`2, 3, 7, 8, 10, 11, 15–17, and 19–23 and provides a rationale for combining
`
`Teramura and Peirce. Id. at 33–39, 48–56.
`
`We have reviewed Petitioner’s showing with respect to claims 1–3, 7–
`
`11, 15–17, and 19–23 along with the supporting evidence and determine that
`
`there is a reasonable likelihood that Petitioner would prevail in establishing
`
`the unpatentability of claims 1–3, 7–11, 15–17, and 19–23. As discussed
`
`above in the procedural posture section of this decision, the ’578 patent
`
`claims are very similar to the challenged claims in this case. The showing of
`
`unpatentability of claims 1–3, 7–11, 15–17, and 19–22 of the ‘578 patent in
`
`the CBM93 case is very similar to the showing made before us. The
`
`11
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`decision was appealed and the Federal Circuit affirmed the Board’s decision.
`
`For these reasons, we determine that there is a sufficient basis for instituting
`
`trial. We independently determine that the Petition on its own sets forth a
`
`basis for instituting trial. Accordingly, based on the record before us, we
`
`determine that there is a reasonable likelihood that Petitioner would prevail
`
`in establishing that claims 1–3, 7–11, 15–17, and 19–23 would have been
`
`obvious over Teramura and Peirce.
`
`C. Asserted Obviousness over Teramura, Peirce, and Haynes
`
`Petitioner contends claims 4 and 12 are unpatentable under 35 U.S.C.
`
`§ 103(a) as obvious over Teramura, Peirce, and Haynes. Pet. 57–62.
`
`Relying on the testimony of Dr. Neuman, Petitioner explains how the
`
`combination of Teramura, Peirce, and Haynes teaches or suggests all of the
`
`limitations of claims 4 and 12. Id. (citing Ex. 1004).
`
`Petitioner has accounted sufficiently for the limitations of claims 4
`
`and 12. For example, claim 4 depends directly from claim 1 and recites
`
`“wherein the new electronic currency is used to calculate the balance in a
`
`second data storage area associated with the second user.” Claim 12
`
`depends directly from claim 9 and is similar. Petitioner contends that
`
`Haynes teaches that payor and payee balances are recalculated based on the
`
`amount of money transferred. Id. at 60 (citing Ex. 1006, 7:2–17, 8:4–18,
`
`20:5–16). Petitioner argues that Teramura in view of Peirce and Haynes
`
`discloses that
`
`the new electronic currency (the NetCash coins generated by the
`integrated NetCash currency server/broker server in order to pay
`the merchant sever 20) is used to calculate the balance (the
`monetary balance held by the merchant server 20) in a second
`data storage area (the area where the merchant server 20 stores
`its received electronic currency, including, e.g., the merchant
`
`12
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`server’s valuable data processing unit 1205 and memory unit
`1204) associated with the second user (the merchant, represented
`by merchant 20).
`
`Id. at 60–61.
`
`Petitioner contends that it would have been obvious to include balance
`
`calculation as taught by Haynes. Id. at 57. Petitioner asserts that Haynes is
`
`in the same field of endeavor as Teramura and Peirce and that a person
`
`having ordinary skill in the art would have been motivated to include
`
`balance calculation to provide consumers and merchants an accurate
`
`measure of their currency. Id. at 58 (citing Ex. 1004 ¶¶ 67, 68). Petitioner’s
`
`showing with respect to claim 12 is similar to its showing with respect to
`
`claim 4. Id. at 61–62.
`
`Based on the current record before us, we determine the information
`
`presented shows a reasonable likelihood that Petitioner would prevail in
`
`establishing that claims 4 and 12 would have been obvious over Teramura,
`
`Peirce, and Haynes.
`
`D. Asserted Obviousness over Teramura, Peirce, and Popolo
`
`Petitioner contends claims 5, 6, 13, 14, and 18 are unpatentable under
`
`35 U.S.C. § 103(a) as obvious over Teramura, Peirce, and Popolo. Pet. 62–
`
`70. Relying on the testimony of Dr. Neuman, Petitioner explains how the
`
`combination of Teramura, Peirce, and Popolo teaches or suggests all of the
`
`limitations of claims 5, 6, 13, 14, and 18. Id. (citing Ex. 1004).
`
`Claims 5, 6, 13, 14, and 18 depend from claims 1 or 9 and further
`
`require that a commission is paid to the CIA, in various ways, as part of the
`
`currency transaction recited in the parent independent claims. Popolo
`
`discloses an interactive online system for matching buyers and sellers of spot
`
`metals such as steel. Ex. 1007, Title, 1:4–11, 1:46–52. A seller posts an
`
`13
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`“asking price” on the system for the sale of metal to potential buyers. Id. at
`
`9:20–50, Fig. 7. The asking price may either reflect separate entries for
`
`“asking total value” and “fee,” or roll the fee into a single asking price. Id.
`
`at 9:29–50, Fig. 7. The fee is calculated “based on the seller[’]s current
`
`month-to-date postings activity on the system.” Id. at 9:42–43.
`
`According to Petitioner, in view of Popolo, it would have been
`
`obvious to add a commission to the combined currency transaction system of
`
`Teramura and Peirce to provide the middleman a revenue stream for its
`
`services. See Pet. 63–64. Petitioner provides sufficient reasons for making
`
`the combination. We note, that the Board determined that this similar
`
`combination of prior art against similar claims in CBM93 were unpatentable
`
`and that decision was affirmed by the Federal Circuit.
`
`For the foregoing reasons, we determine the information presented
`
`shows a reasonable likelihood that Petitioner would prevail in establishing
`
`that claims 5, 6, 13, 14, and 18 would have been obvious over Teramura,
`
`Peirce, and Popolo.
`
`III. CONCLUSION
`
`For the foregoing reasons, we determine that the information
`
`presented establishes a reasonable likelihood that Petitioner would prevail in
`
`showing that claims 1–23 of the ’918 patent are unpatentable.
`
`14
`
`

`

`IPR2017-00542
`Patent 8,712,918 B2
`
`IV. ORDER
`
`Accordingly, it is:
`
`ORDERED that pursuant to 35 U.S.C. § 314(a), an inter partes
`
`
`
`
`
`review is hereby instituted as to claims 1–23 of the ’918 patent on the
`
`following grounds of unpatentability:
`
`References
`
`Basis
`
`Challenged Claims
`
`Teramura and Peirce
`Teramura, Peirce, and
`Haynes
`Teramura, Peirce, and
`Popolo
`
`§ 103(a)
`
`1–3, 7–11, 15–17, and 19–23
`
`§ 103(a)
`
`4 and 12
`
`§ 103(a)
`
`5, 6, 13, 14, and 18
`
`FURTHER ORDERED that pursuant to 35 U.S.C. § 314(c) and
`
`
`
`
`
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial, which
`
`commences on the entry date of this decision; and
`
`FURTHER ORDERED that the trial is limited to the grounds
`
`identified immediately above, and no other ground is authorized.
`
`
`
`15
`
`

`

`16
`
`IPR2017-00542
`Patent 8,712,918 B2
`
`FOR PETITIONER:
`
`
`
`Adrian Percer
`adrian.percer@weil.com
`
`Naveen Modi
`naveenmodi@paulhastings.com
`
`Brian Chang
`brian.chang@weil.com
`
`
`
`FOR PATENT OWNER:
`
`
`
`Kevin McCarthy
`kdmccarthy@roachbrown.com
`
`
`
`

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket