Trials@uspto.gov
`571-272-7822
`
`
`
`
`Paper 35
`Date: March 25, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`SQUARE, INC.,
`Petitioner,
`
`v.
`
`4361423 CANADA INC.,
`Patent Owner.
`____________
`
`IPR2019-01625
`Patent 8,286,875 B2
`_______________
`
`
`Before JAMESON LEE, ROBERT J. WEINSCHENK, and
`KEVIN C. TROCK, Administrative Patent Judges.
`
`WEINSCHENK, Administrative Patent Judge.
`
`
`
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`

`

`IPR2019-01625
`Patent 8,286,875 B2
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`
`INTRODUCTION
`I.
`A. Background and Summary
`Square, Inc. (“Petitioner”) filed a Petition (Paper 14, “Pet.”)
`requesting an inter partes review of claims 1–3, 6, 12, 14–16, 18–26, and 28
`(“the challenged claims”) of U.S. Patent No. 8,286,875 B2 (Ex. 1001, “the
`’875 patent”). 4361423 Canada Inc. (“Patent Owner”) filed a Preliminary
`Response (Paper 6, “Prelim. Resp.”) to the Petition. We instituted an inter
`partes review of the challenged claims on March 30, 2020. Paper 12 (“Dec.
`on Inst.”), 14. After institution, Patent Owner filed a Response (Paper 21,
`“PO Resp.”) to the Petition, Petitioner filed a Reply (Paper 26, “Pet. Reply”)
`to the Response, and Patent Owner filed a Sur-reply (Paper 27, “PO Sur-
`reply”) to the Reply. We held an oral hearing on January 27, 2021, and a
`transcript of the hearing is included in the record. Paper 34 (“Tr.”).
`For the reasons set forth below, Petitioner has shown by a
`preponderance of the evidence that claims 1–3, 6, 12, 14–16, 18–26, and 28
`of the ’875 patent are unpatentable.
`B. Real Parties in Interest
`Each party identifies itself as the only real party in interest. Pet. 4;
`Paper 5, 2.
`C. Related Matters
`The parties indicate that the ’875 patent is the subject of the following
`district court case: 4361423 Canada Inc. v. Square, Inc., No. 4:19-cv-04311
`(N.D. Cal.). Pet. 4; Paper 5, 2. Petitioner indicates that the ’875 patent is
`the subject of another petition for inter partes review in IPR2019-01626.
`Pet. 4. We declined to institute an inter partes review in IPR2019-01626.
`See IPR2019-01626, Paper 14, 11.
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`
`D. The ’875 Patent
`The ’875 patent relates to an apparatus, system, and method “for
`commercial transactions using a transaction card via a communication
`device.” Ex. 1001, 2:15–25. Specifically, the ’875 patent describes a
`transaction apparatus, such as a portable point of sale (“POS”) device, linked
`to a communication device, such as a mobile phone. Id. at 5:49–53, 5:63–
`6:3. Figure 2 is reproduced below.
`
`
`Figure 2 shows an example of a transaction and communication assembly.
`Id. at 7:17–22. The assembly includes POS device 12 linked to mobile
`phone 14 via cable 30. Id. POS device 12 includes card reader slot 39. Id.
`at 7:29–32. The ’875 patent explains that a user swipes a card through slot
`39, a card reader captures information from the card, and the card reader
`transfers the information to a microcontroller unit (“MCU”). Id. at 7:41–42,
`7:55–58. The MCU converts the information into an analog audio signal
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`and transmits it via cable 30 to mobile phone 14. Id. at 7:64–8:3. Mobile
`phone 14 then transmits the information to a transaction server. Id. at 8:4–5.
`The transaction server responds to mobile phone 14 by indicating whether a
`processor/issuer accepts or rejects the transaction. Id. at 8:5–17.
`E. Illustrative Claim
`Of the challenged claims, claims 1, 12, 18, 22, 24, 26, and 28 are
`
`independent. Claim 1 is reproduced below.
`1. An apparatus for effecting commercial transactions
`between an input device and a remote transaction server using a
`transaction card, said apparatus comprising:
`an input device for capturing information from the
`transaction card;
`a controller for converting the captured card information
`into a signal having an analog audio format suitable for
`transmission to an analog hands-free jack of a mobile
`communication device; and
`a communication link for coupling said input device to an
`analog hands-free jack of a mobile communication device for
`the transmission of said analog-audio-format signals
`therebetween;
`wherein when said input device captures the card
`information, said controller converts the card information into
`said analog-audio-format signal and transmits said converted
`signal via said communication link to said mobile
`communication device; and
`wherein said mobile communication device automatically
`transmits the captured card information to the remote
`transaction server and receives transaction validation
`information from said remote transaction server.
`Id. at 11:48–12:3.
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`IPR2019-01625
`Patent 8,286,875 B2
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`
`Exhibit No.
`1003
`1004
`
`1006
`1008
`1018
`1042
`
`F. Evidence
`Petitioner submits the following evidence:
`Evidence
`Declaration of Bruce McNair (“McNair Declaration”)
`Proctor, US 2002/0091633 A1, published July 11, 2002
`(“Proctor”)
`Vrotsos, US 2005/0236480 A1, published Oct. 27, 2005
`(“Vrotsos”)
`Eisner, US 5,838,773, issued Nov. 17, 1998 (“Eisner”)
`Hart, US 7,673,799 B2, issued Mar. 9, 2010 (“Hart”)
`Second Declaration of Bruce McNair (“McNair Second
`Declaration”)
`Patent Owner submits the Declaration of Ivan Zatkovich. Ex. 2004
`
`(“Zatkovich Declaration”).
`G. Asserted Grounds
`Petitioner asserts that the challenged claims are unpatentable on the
`following grounds:
`Claims Challenged
`1–3, 6
`12, 14–16, 18–26, 28
`1–3, 6, 12, 18, 21, 22,
`24, 26, 28
`14–16, 19, 20, 23, 25
`
`Reference(s)/Basis
`35 U.S.C. §
`Proctor, Vrotsos
`1031
`Proctor, Hart
`103
`Eisner, Proctor
`103
`Eisner, Proctor, Hart
`103
`II. ANALYSIS
`
`A. Legal Standards
`A claim is unpatentable as obvious under 35 U.S.C. § 103(a) if the
`differences between the claimed subject matter and the prior art are such that
`
`1 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103. Because the ’875
`patent was filed before the effective date of the relevant amendment, the pre-
`AIA version of § 103 applies.
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`the subject matter as a whole would have been obvious at the time the
`invention was made to a person having ordinary skill in the art to which the
`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`(2007). The question of obviousness is resolved on the basis of underlying
`factual determinations, including 1) the scope and content of the prior art; 2)
`any differences between the claimed subject matter and the prior art; 3) the
`level of ordinary skill in the art; and 4) any objective indicia of non-
`obviousness. Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
`B. Level of Ordinary Skill in the Art
`Petitioner asserts that
`a person of ordinary skill in the art (“POSITA”), at the time the
`’875 patent was filed, would have been a person with a
`bachelor’s degree in electrical engineering, computer
`engineering, or equivalent and have at least one to two years of
`relevant experience in the fields of embedded systems and
`mobile communication device interfaces, or otherwise
`equivalent industry experience in the relevant field. Less work
`experience may be compensated by a higher level of education,
`such as a Master’s Degree, and vice versa.
`Pet. 14–15 (citing Ex. 1003 ¶¶ 5–12, 22–27). Petitioner’s description of the
`level of ordinary skill in the art is supported by the testimony of Petitioner’s
`declarant, Mr. Bruce McNair. Ex. 1003 ¶¶ 22–27. Patent Owner’s
`declarant, Mr. Ivan Zatkovich, agrees with Petitioner’s description.
`Ex. 2004 ¶ 14. Therefore, we adopt Petitioner’s description, but delete the
`qualifier “at least” to prevent the description from extending beyond the
`level of ordinary skill in the art.
`C. Claim Construction
`In an inter partes review proceeding, a claim of a patent is construed
`using the same standard used in federal district court, including construing
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`the claim in accordance with the ordinary and customary meaning of the
`claim as understood by one of ordinary skill in the art and the prosecution
`history pertaining to the patent. 37 C.F.R. § 42.100(b) (2019).
`The parties’ disputes about the asserted grounds of unpatentability
`raise issues regarding the meaning of the following claim terms.
`1. Portable
`Petitioner contends that the term “portable” means “can be carried or
`moved.” Pet. 42. Petitioner also argues that the ’875 patent “does not recite
`any criteria for describing a device as ‘portable,’ but [indicates that] a device
`linked to a mobile communication device . . . may be ‘portable.’” Id. (citing
`Ex. 1001, 7:19–22).
`Patent Owner disagrees with Petitioner. PO Resp. 33–36. Patent
`Owner contends that the term “portable” requires “a means of power that
`could be supplied in a mobile setting.” Id. at 35. Patent Owner argues that
`the ’875 patent describes “a portable point-of-sale system that could be used
`in any number of mobile contexts, such as for taxi drivers and other
`merchants.” Id. (citing Ex. 1001, 8:65–9:19). According to Patent Owner, a
`person of ordinary skill in the art would understand “that portability would
`require that a device cannot rely on fixed, non-portable connections for
`communication.” Id. at 35–36 (citing Ex. 2004 ¶¶ 72–74, 78).
`As discussed below, even if we assume that the term “portable”
`requires a means of power that could be supplied in a mobile setting, the
`asserted prior art nonetheless teaches such a portable device. See Section
`II.D.7. As a result, we need not resolve this particular claim construction
`issue in order to resolve the parties’ disputes about the asserted grounds of
`unpatentability.
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`2. Further Processing by Circuitry Contained in Said Mobile
`Communication Device
`Patent Owner contends that the phrase “further processing by circuitry
`contained in said mobile communication device” requires “the recovery of
`the information from the audio signal into digital information.” PO Resp.
`40–41. Patent Owner cites to a portion of the ’875 patent that states “[t]he
`analog signal from the magnetic card 24 is sent via the hands-free interface
`41 where the software application of the controller 51 [in the cell phone]
`converts the received signal back to binary data for example as stored on the
`magnetic card 34.” Id. at 40 (citing Ex. 1001, 10:53-57). Patent Owner
`contends “this disclosure shows” that “the limitation of ‘further processing’
`is not merely relaying an encrypted signal or reformatting the signal for
`transmission to the transaction server.” Id.
`Petitioner disagrees with Patent Owner. Pet. Reply 21–22. Petitioner
`argues that “the claims do not specify what further processing is required or
`provide any basis to limit and exclude transmission processing performed by
`the phone to transmit received signals to the server over a cellular network.”
`Id. at 22.
`Claim 24 recites “providing said converted signal indicative of the
`magnetically recorded information stored on a magnetic stripe to said mobile
`communication device for further processing by circuitry contained in said
`mobile communication device.”2 Ex. 1001, 14:37–41. Thus, the claim
`language does not require that the mobile communication device perform a
`specific type of processing. See id.
`
`
`2 Claim 24 is the only challenged claim that recites the phrase “further
`processing by circuitry contained in said mobile communication device.”
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`As discussed above, Patent Owner identifies one embodiment of the
`’875 patent in which the mobile communication device receives an analog
`signal and converts it “back to binary data for example as stored on the
`magnetic card.” Id. at 10:26–28, 10:53–57. But the ’875 patent describes
`other embodiments. For example, the ’875 patent describes an embodiment
`in which the mobile communication device receives an analog audio signal,
`“encodes the audio input using for example the normal GSM voice codec,”
`and sends the encoded audio signal to the transaction server. Id. at 10:4–11.
`Thus, in that embodiment, the mobile communication device does not
`convert the received analog signal back to binary data as stored on the
`magnetic card. See id.
`Because, for the reasons discussed above, Patent Owner’s
`interpretation is not consistent with the scope of the claim language and the
`written description, we decline to adopt it. No further construction of the
`phrase “further processing by circuitry contained in said mobile
`communication device” is necessary to resolve the parties’ disputes about
`the asserted grounds of unpatentability. See Section II.D.10.
`D. Obviousness of Claims 1–3, 6, 12, 18, 21, 22, 24, 26, and 28 over
`Eisner and Proctor
`Petitioner argues that claims 1–3, 6, 12, 18, 21, 22, 24, 26, and 28
`would have been obvious over Eisner and Proctor. Pet. 56–84. For the
`reasons discussed below, Petitioner has shown by a preponderance of the
`evidence that claims 1–3, 6, 12, 18, 21, 22, 24, 26, and 28 would have been
`obvious over Eisner and Proctor.
`1. Overview of Eisner and Proctor
`Eisner teaches a secure electronic financial transaction system. Ex.
`1008, 1:10–16. Figure 2 is reproduced below.
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`Id. at Fig. 2. Figure 2 is a block diagram of personal reader capture transfer
`technology unit (“PRCTT”) 14. Id. at 3:4–6, 4:20–26. PRCTT 14 includes
`magnetic stripe reader 30, single chip computer 34, digital to analog dual
`tone multi frequency (“DTMF”) tone generator 38, telephone-in jack 42, and
`line-out jack 44. Id. at 4:20–26.
`
`Eisner teaches that magnetic stripe reader 30 captures data from a
`transaction card. Id. at 4:27–40. Single chip computer 34 encodes the
`captured data. Id. at 5:3–14. DTMF tone generator 34 converts the encoded
`data to analog tones corresponding to the twelve tones of the DTMF
`standard. Id. at 5:15–26. The data is then output at line-out jack 44 to
`communication network 16. Id. at 5:26–36.
`Proctor teaches a financial transaction verification system that uses a
`wireless or cellular network. Ex. 1004 ¶ 7. Figure 1 is reproduced below.
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`Id. at Fig. 1. Figure 1 shows a block diagram of financial transaction
`verification system 10. Id. ¶¶ 6–7. Financial transaction verification system
`10 includes conventional credit card verification terminal 36 that is
`connected to converter 30 via cable 40. Id. ¶ 10. Converter 30 is connected
`to cellular telephone 22 via cable 32 and hands-free connector 26. Id. ¶¶ 8–
`9. Cellular phone 22 includes antenna 24 for communicating with central
`verification facility 20 via cellular network 12. Id. ¶¶ 7–8.
`Proctor teaches that terminal 36 includes magnetic credit card reader
`slot 46, which reads unique data encoded on a magnetic stripe on credit card
`48. Id. ¶ 10. Terminal 36 converts the scanned data from a digital form to
`an audible stream of tones. Id. ¶¶ 11, 16. Converter 30 converts the audible
`stream of tones to an encoded format that can be transmitted via cellular
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`network 12. Id. ¶ 16. Cellular phone 22 then transmits the encoded stream
`to central verification facility 20 via cellular network 12. Id. Proctor also
`teaches that the components of merchant system 14 may be combined or
`integrated, for example, converter 30 may be incorporated into cellular
`phone 22 or terminal 36. Id. ¶ 18.
`2. Claim 1
`Claim 1 recites “[a]n apparatus for effecting commercial transactions
`between an input device and a remote transaction server using a transaction
`card.”3 Ex. 1001, 11:48–50. Eisner teaches a PRCTT for effecting
`commercial transactions between a card reader and a remote transaction
`server using a credit card. Pet. 61–63; Ex. 1008, 3:20–31, 4:19–40, Figs. 1,
`2. Patent Owner does not dispute that the Eisner and Proctor combination
`teaches the preamble of claim 1.
`Claim 1 recites “an input device for capturing information from the
`transaction card.” Ex. 1001, 11:51–52. Eisner teaches that the PRCTT
`includes a card reader for capturing information from a credit card. Pet. 63;
`Ex. 1008, 4:27–40. Patent Owner does not dispute that the Eisner and
`Proctor combination teaches this limitation of claim 1.
`Claim 1 recites “a controller for converting the captured card
`information into a signal having an analog audio format suitable for
`transmission to an analog hands-free jack of a mobile communication
`device.” Ex. 1001, 11:53–56. Eisner teaches that the PRCTT includes an
`“Intel micro controller” that “converts” the captured card information “to
`
`
`3 We need not decide whether the preamble in any of the challenged
`independent claims is limiting because we determine that the prior art in
`each asserted ground teaches the recitations in each preamble.
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`analog tones corresponding to the twelve tones generated by a touchtone
`phone or other device conforming to the dual tone multi-frequency (DTMF)
`standard.” Pet. 63–64; Ex. 1008, 5:15–26. The evidence of record indicates
`that a DTMF signal is an analog audio signal suitable for transmission to an
`analog hands-free jack of a mobile phone. Pet. 26 n.5; Ex. 1001, 8:23–30;
`Ex. 1003 ¶ 48; Ex. 1041, 58:22–59:2; Ex. 2004 ¶ 35; Tr. 66:13–67:3.
`Proctor teaches a mobile phone with a “hands-free” jack. Pet. 64–65;
`Ex. 1004 ¶ 8, Fig. 1. As discussed in more detail below, it would have been
`obvious to a person of ordinary skill in the art to combine the cited teachings
`of Eisner and Proctor so that Eisner’s PRCTT connects to the hands-free
`jack on Proctor’s mobile phone. Pet. 60–61; Ex. 1003 ¶ 100.
`Patent Owner responds that Proctor does not teach converting the
`captured card information into a signal having an analog audio format
`suitable for transmission to an analog hands-free jack of a mobile
`communication device. PO Resp. 43–44; PO Sur-reply 22. Patent Owner
`argues that “Petitioner never bothers to establish how Proctor’s modulated
`tonal signal would constitute a format suitable for transmission to a hands-
`free jack of a mobile phone.” PO Resp. 44; see PO Sur-reply 22. Patent
`Owner also argues that Proctor’s converter is necessary to convert the
`captured card information to a format suitable for a hands-free jack, but
`Petitioner relies on an embodiment where Proctor’s converter is incorporated
`into the mobile phone. PO Resp. 18–19, 22, 44. Thus, according to Patent
`Owner, “given Petitioner’s asserted embodiment of Proctor, the connection
`would not be to a hands-free jack at all but instead to some port leading to
`the converter placed inside a specialized communication device.” Id. at 44.
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`Patent Owner’s argument is not persuasive because it addresses
`Proctor individually, not the combination of Eisner and Proctor. See In re
`Keller, 642 F.2d 413, 426 (CCPA 1981) (“[O]ne cannot show non-
`obviousness by attacking references individually where, as here, the
`rejections are based on combinations of references.”). As discussed above,
`Eisner’s PRCTT includes a controller that converts the captured card
`information to a DTMF signal that is suitable for transmission to an analog
`hands-free jack of a mobile phone. Ex. 1001, 8:23–30; Ex. 1003 ¶ 48;
`Ex. 1008, 5:15–26; Ex. 1041, 58:22–59:2; Ex. 2004 ¶ 35; Tr. 66:13–67:3.
`As a result, a person of ordinary skill in the art would have understood that
`Eisner’s PRCTT can be connected to the hands-free jack on Proctor’s mobile
`phone even if Proctor’s converter is incorporated into the mobile phone.
`Ex. 1003 ¶¶ 48, 100.
`Patent Owner responds that Eisner does not teach converting the
`captured card information into a signal having an analog audio format
`suitable for transmission to an analog hands-free jack of a mobile
`communication device. PO Resp. 44–45; PO Sur-reply 20–21. Patent
`Owner argues that Eisner teaches an isolation transformer that conditions a
`signal for output on an RJ-11 jack. PO Resp. 44 (citing Ex. 2004 ¶ 101).
`Thus, according to Patent Owner, Eisner’s output “would not be compatible”
`with the hands-free jack on Proctor’s mobile phone. Id. (citing Ex. 2004
`¶ 94). Patent Owner also argues that “[c]onsistent with Petitioner’s own
`assertions [in a related case], neither the plug nor the conductors of an RJ-11
`connector would be compatible with a standard 3.5 mm hands-free audio
`jack present on mobile phones.” Id. (citing Ex. 2004 ¶¶ 94–99); see PO Sur-
`reply 20–21.
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`Patent Owner’s argument is not persuasive. First, although Eisner
`teaches an embodiment where the DTMF signal is output over an RJ-11
`jack, Eisner teaches that the output jack may be “any other suitable
`interface.” Ex. 1008, 5:34–36. And, as discussed above, Eisner’s DTMF
`signal is suitable for transmission over a hands-free jack. Ex. 1001, 8:23–
`30; Ex. 1003 ¶ 48; Ex. 1041, 58:22–59:2; Ex. 2004 ¶ 35; Tr. 66:13–67:3.
`Further, even if some additional conditioning would have been necessary to
`output Eisner’s DTMF signal over a hands-free jack, a person of ordinary
`skill in the art would have known how to incorporate that conditioning into
`Eisner’s PRCTT. Pet. 60 n.9; Ex. 1003 ¶¶ 48–51; Ex. 1041, 42:6–43:16.
`Second, Patent Owner’s argument misinterprets Petitioner’s proposed
`combination. Petitioner does not propose connecting Eisner’s RJ-11 jack to
`Proctor’s hands-free jack. See Pet. 60–61; Ex. 1003 ¶ 100. Rather,
`Petitioner asserts that Eisner’s PRCTT transmits the DTMF signal “over a
`hands-free jack instead of an RJ-11 telephone jack.”4 Pet. 61; Ex. 1003
`¶ 100 (emphasis added). In other words, in the proposed combination,
`Eisner’s PRCTT includes a hands-free jack that is connected to the hands-
`free jack on Proctor’s mobile phone. Pet. 60–61; Ex. 1003 ¶ 100.
`
`
`4 Petitioner argues in a related case that disclosure of an RJ-11 jack in a
`provisional application does not provide written description support for a
`hands-free jack. See IPR2019-01626, Paper 2, 20–23. As discussed above,
`Petitioner argues in this case that it would have been obvious to use a hands-
`free jack instead of an RJ-11 jack. Pet. 6; Ex. 1003 ¶ 100. Petitioner’s
`arguments are not inconsistent because the standard for written description
`support is not the same as the standard for obviousness. See Knowles Elecs.
`LLC v. Cirrus Logic, Inc., 883 F.3d 1358, 1365 (Fed. Cir. 2018) (“[A]
`description which renders obvious a claimed invention is not sufficient to
`satisfy the written description requirement.”).
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`Patent Owner responds that “Petitioner offers an alternative theory,
`suggesting in [a] footnote that Eisner’s DTMF signal might be sent for
`processing by Proctor’s converter 30 before the signal is passed along to the
`mobile phone.”5 PO Resp. 45 (citing Pet. 60 n.9). Patent Owner argues that
`Proctor’s converter “accept[s] modem signals and then produce[s] (not
`receive[s]) DTMF signals.” Id. (citing Ex. 2004 ¶¶ 102–104) (emphasis
`omitted). As a result, according to Patent Owner, “even if Eisner’s DTMF
`signals were somehow sent into the part of the Proctor converter intended to
`communicate with the mobile phone using audio signals, Proctor’s converter
`would only convert them to modem signals which are not transmissible on
`the cellular network.” Id. at 46 (citing Ex. 2004 ¶¶ 105, 112).
`Patent Owner’s argument is not persuasive. Proctor’s converter does
`not simply accept a modem signal and produce a DTMF signal. See
`Ex. 1004 ¶¶ 9, 16. Proctor teaches that the converter converts a signal to an
`“encoded format that is readily transmitted via digital cellular networks,”
`and is further “described in U.S. Pat. No. 6,144,336, by Dan Preston, et al.”
`(“Preston”). Id. According to Preston, the converter converts a signal to a
`DTMF signal, and then formats the DTMF signal according to the
`appropriate standard for a cellular network (e.g., CDMA, TDMA, or GSM).
`Ex. 1005, 11:30–47. In other words, Preston indicates that if the converter
`receives a signal for transmission over a cellular network that already is in
`DTMF format, the converter would still need to format the DTMF signal
`
`5 Petitioner relies primarily on the Proctor embodiment where the converter
`is incorporated into the mobile phone, but Petitioner notes that the
`embodiment where the converter is separate from the mobile phone also
`teaches the limitations of the challenged claims (when combined with
`Eisner). Pet. 18 n.3, 60 n.9.
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`according to the appropriate standard for the cellular network. Ex. 1004
`¶¶ 9, 16; Ex. 1005, 11:30–47. We, therefore, disagree with Patent Owner’s
`argument that the converter would instead convert the DTMF signal to a
`modem signal that is not readily transmissible over the cellular network. See
`PO Resp. 45–46; Ex. 2004 ¶¶ 102–105.
`Claim 1 also recites “a communication link for coupling said input
`device to an analog hands-free jack of a mobile communication device for
`the transmission of said analog-audio-format signals therebetween.” Ex.
`1001, 11:57–60. Eisner teaches that the PRCTT outputs the DTMF signal to
`“any . . . suitable interface.” Pet. 63–64; Ex. 1008, 5:34–36. Proctor teaches
`a cable that is inserted into the “hands-free” jack on the mobile phone. Pet.
`65–66; Ex. 1004 ¶¶ 8–10, Fig. 1. As discussed in more detail below, it
`would have been obvious to a person of ordinary skill in the art to combine
`the cited teachings of Eisner and Proctor so that Eisner’s PRCTT connects to
`the hands-free jack on Proctor’s mobile phone. Pet. 60–61; Ex. 1003 ¶ 100.
`Patent Owner responds that the combination of Eisner and Proctor
`does not teach a communication link for coupling an input device to an
`analog hands-free jack of a mobile communication device for the
`transmission of analog audio signals. PO Resp. 46–48. Patent Owner
`argues that “[c]onverter 30 is the only way disclosed by Proctor for
`receiving card information from a card reader and converting it into a signal
`that can be transmitted by a mobile phone.” Id. at 47. According to Patent
`Owner, “Petitioner does not explain what type of communication link would
`be established from Eisner’s card reader to the Proctor phone, since the
`incorporation of Proctor’s converter into the phone would require that the
`reader somehow transmit the modem/landline signal to the converter inside
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`the phone.” Id. (citing Ex. 2004 ¶¶ 115–116). Patent Owner concludes that
`“[t]his connection is certainly not being made to an audio hands-free jack,
`since the signal has not yet been converted into any kind of analog audio
`signal suitable for a hands-free jack.” Id. at 47–48 (citing Ex. 2004 ¶ 116).
`Patent Owner’s argument is not persuasive because it misinterprets
`Petitioner’s proposed combination. Petitioner does not propose transmitting
`Proctor’s modem signal to Proctor’s mobile phone. See Pet. 60–61; Ex.
`1003 ¶ 100. Rather, Petitioner asserts that Eisner’s PRCTT transmits the
`DTMF signal to Proctor’s mobile phone. Pet. 60–61; Ex. 1003 ¶ 100. And,
`as discussed above, Eisner’s DTMF signal is suitable for transmission over a
`hands-free jack. Ex. 1001, 8:23–30; Ex. 1003 ¶ 48; Ex. 1041, 58:22–59:2;
`Ex. 2004 ¶ 35; Tr. 66:13–67:3. Thus, in the proposed combination, Eisner’s
`PRCTT includes a hands-free jack that is connected via a cable to the hands-
`free jack on Proctor’s mobile phone to form a communication link.6
`Pet. 60–61, 65–66; Ex. 1003 ¶ 100.
`Patent Owner also responds that “Petitioner does not explain the
`connectiveness between an[] RJ-11 output from Eisner’s card reader to
`whatever input device the phone has to have to receive modem or landline
`signals from Eisner and route them to the converter of Proctor.” PO Resp.
`48. Patent Owner argues that there is “no evidence that the signals
`transmitted by the reader could be interpreted by the mobile phone and
`
`
`6 Patent Owner argues that, for the Proctor embodiment where the converter
`is separate from the mobile phone (and thus located between Eisner’s
`PRCTT and Proctor’s mobile phone), there is “no direct communication
`link” from the PRCTT to the mobile phone’s hands-free jack. PO Resp. 48
`n.6 (emphasis added). Patent Owner’s argument is not persuasive because
`claim 1 does not recite a direct communication link. Ex. 1001, 11:57–60.
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`directed to the circuitry identified as the converter without customization of
`the mobile phone’s input interface.” Id. (citing Ex. 2004 ¶¶ 115–117).
`Patent Owner’s argument is not persuasive because it misinterprets
`Petitioner’s proposed combination. Petitioner does not propose connecting
`Eisner’s RJ-11 jack to Proctor’s hands-free jack. See Pet. 60–61; Ex. 1003
`¶ 100. Rather, Petitioner asserts that Eisner’s PRCTT transmits the DTMF
`signal “over a hands-free jack instead of an RJ-11 telephone jack.” Pet. 61;
`Ex. 1003 ¶ 100 (emphasis added). In other words, in the proposed
`combination, Eisner’s PRCTT includes a hands-free jack that is connected
`via a cable to the hands-free jack on Proctor’s mobile phone. Pet. 60–61,
`65–66; Ex. 1003 ¶ 100. Patent Owner does not explain specifically why this
`combination would require customization to the input on Proctor’s mobile
`phone. See PO Resp. 48.
`Claim 1 also recites “wherein when said input device captures the
`card information, said controller converts the card information into said
`analog-audio-format signal and transmits said converted signal via said
`communication link to said mobile communication device.” Ex. 1001,
`11:61–65. As discussed above, the Eisner and Proctor combination teaches
`a PRCTT that captures information from a credit card, converts the captured
`information to an analog audio signal, and transmits the signal over a hands-
`free jack to Proctor’s mobile phone. Pet. 60–61, 63–66; Ex. 1003 ¶ 100;
`Ex. 1004 ¶¶ 8–10, Fig. 1; Ex. 1008, 4:27–40, 5:15–26, 5:34–36. Other than
`the arguments discussed above, Patent Owner does not dispute that the
`Eisner and Proctor combination teaches this limitation of claim 1.
`Claim 1 also recites “wherein said mobile communication device
`automatically transmits the captured card information to the remote
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`transaction server and receives transaction validation information from said
`remote transaction server.” Ex. 1001, 11:66–12:3. Proctor teaches that the
`mobile phone automatically transmits the captured card information to a
`central verification facility and receives a transaction validation reply
`message. Pet. 30–31, 68; Ex. 1004 ¶¶ 16–17. As discussed in more detail
`below, it would have been obvious to a person of ordinary skill in the art to
`combine the cited teachings of Eisner and Proctor so that Eisner’s PRCTT
`connects to the hands-free jack on Proctor’s mobile phone, which
`automatically transmits the captured card information to the central
`verification facility. Pet. 60–61, 66–68; Ex. 1003 ¶ 100.
`Patent Owner responds that Proctor does not teach that the mobile
`phone automatically transmits the captured card information to the remote
`transaction server. PO Resp. 25–27, 48–50; PO Sur-reply 14–15, 21–22.
`Patent Owner argues that “Proctor would require that the merchant
`manually dial the mobile phone to connect to the verification system.” PO
`Resp. 26 (citing Ex. 1004 ¶ 15; Ex. 2004 ¶¶ 67, 68, 114, 115); see PO Sur-
`reply 14–15. Patent Owner also argues that “at the time of the Proctor
`application it would not be practical to maintain an open phone connection
`to a remote server for a long and indeterminate period of time” because of
`“phone battery life” and “significant ‘per minute’ mobile phone charges.”
`PO Resp. 26 (citing Ex. 2004 ¶¶ 67–69).
`Patent Owner’s argu