IPR2020-00499, -0502,
`-0504, -0505
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`Patent Owner’s Oral Argument | May 12, 2021
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`www.eckertseamans.com
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`Dynamics Inc. - EX. 2035
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`-0504, -0505
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`Patent Owner’s Oral Argument | May 12, 2021
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`www.eckertseamans.com
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`Magnetic Emulation Technology
`
`• A conventional magnetic stripe card is a device that stores data in a
`magnetic stripe affixed to its surface (POR, pg. 2 (-0499))
`• The magnetic stripe communicates with a point-of-sale (POS)
`terminal through Frequency/Double Frequency (F2F) encoding
`(POR, pgs. 2-3 (-0499))
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`Magnetic Emulation Technology
`(F2F Encoding)
`•
`In the F2F coding scheme, neither the amplitude nor the polarity of
`the signal matter. Rather, what matters is the frequency at which the
`flux transitions occur. As can be seen below, “[a] ‘0’ does not have a
`(polarity) transition in the middle of the signal interval T, and a ‘1’ has
`a transition” These 1s and 0s are communicated to the POS
`terminal, which interprets them as card data (POR, pg. 3 (-0499))
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`Magnetic Emulation Technology
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`• The card data communicated to the POS terminal
`formatted in accordance with ISO standards, and the
`format is called a “track” (POR, pg. 4 (-0499))
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`Magnetic Emulation Technology
`
`• A magnetic stripe suffers from numerous drawbacks
`(POR, pg. 6 (-0499))
`– Since a stripe is static (it stays the same between
`transactions and is embedded onto a physical card), it
`is relatively easy to copy
`– Since it is embedded onto the physical card, the
`stripe is subject to standard wear and tear over time
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`Magnetic Emulation Technology
`
`•
`
`Involves the use of an electromagnet to communicate
`data instead of the stripe (POR, pg. 7-8 (-0499))
`
`•
`
`Instead of using a stripe, alternating currents run through the coil, creating
`corresponding changes in magnitude and direction, providing the F2F
`communication from the coil to a read-head on the POS terminal
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`U.S. Patent No. 8,827,153
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`U.S. Patent No. 8,827,153
`
`• Allows for reliable
`communication between
`a device and a POS
`terminal by
`communicating the
`same track of magnetic
`stripe data using
`different iterations or
`“representations” of that
`data
`– (POR, pg. 9-10)
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`U.S. Patent No. 8,827,153
`
`• Allows for reliable
`communication between
`a device and a POS
`terminal by
`communicating the
`same track of magnetic
`stripe data using
`different iterations or
`“representations” of that
`data
`– (POR, pg. 9-10)
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`
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`Gutman, U.S. Pat. No. 6,206,293
`(Asserted Prior Art)
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`Gutman, U.S. Pat. No. 6,206,293
`(Asserted Prior Art)
`• Seeks to resolve security
`issues by communicating
`card data through a
`transducer, rather than a
`static stripe
`• Seeks to resolve “wear
`and tear” issues known in
`the art by eliminating
`swiping
`• EX. 1005, 16:57-17:16
`(POR, pg. 13)
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`Lessin, U.S. Pat. No. 4,868,376
`(Asserted Prior Art)
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`Lessin, U.S. Pat. No. 4,868,376
`(Asserted Prior Art)
`• Seeks to improve the “user
`experience” aspect of
`magnetic emulation,
`providing buttons, a screen,
`and ways for a “user friendly”
`device
`• Does not claim to be an
`invention for interacting with
`POS terminals; teaches to
`use its device without the use
`of a POS terminal to aid in
`the improved “user friendly”
`experience
`– (POR, pg. 14-15)
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`Lessin, U.S. Pat. No. 4,868,376
`(Asserted Prior Art)
`• Seeks to improve the “user
`experience” aspect of magnetic
`emulation, providing buttons, a
`screen, and ways for a “user
`friendly” device
`• Does not claim to be an
`invention for interacting with
`POS terminals; teaches to use
`its device without the use of a
`POS terminal to aid in the
`improved “user friendly”
`experience
`– EX. 1011, 1:54-56, 2:3-11
`(POR, pg. 14-15)
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`Shoemaker, U.S. Pat. No. 7,690,580
`(Asserted Prior Art)
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`Shoemaker, U.S. Pat. No. 7,690,580
`(Asserted Prior Art)
`
`• Seeks to resolve security
`issues by dynamically
`encoding discrete
`portions of a magnetic
`stripe with data at the
`time of a transaction
`– EX. 1010, FIGS 2 & 3
`(POR, pg. 17-18)
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`Shoemaker, U.S. Pat. No. 7,690,580
`(Asserted Prior Art)
`
`• Seeks to resolve security
`issues by dynamically
`encoding discrete
`portions of a magnetic
`stripe with data at the
`time of a transaction
`– EX. 1010, FIGS 2 & 3
`(POR, pg. 17-18)
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`Shoemaker, U.S. Pat. No. 7,690,580
`(Asserted Prior Art)
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`• Combines security
`features with increased
`compatibility with readers
`by dynamically
`generating track data in a
`particular direction in
`response to the card
`being swiped during the
`transaction
`– EX. 1010, 14:54-15:6
`(POR, pg. 19)
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`Grounds for Institution
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`Decision to Institute, pg. 9
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`The ’153 Patent is not Unpatentable
`Over Gutman in view of Shoemaker
`
`• Neither reference teaches retrieving a digital
`representation from a plurality of digital representations
`(POR, pg. 26)
`
`• There is no motivation to combine the references in a
`manner that would provide this limitation, which is
`missing in both references (POR, pg. 33)
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`Neither reference teaches
`“retrieving… from a plurality of digital
`representations”
`• Petitioner admits that Gutman teaches that upon
`activation of his device, a single digital representation of
`a track of magnetic stripe data is retrieved and
`transmitted to a POS terminal (POSR, pg. 4)
`
`• Gutman does not teach at any point, more than one
`digital representation of a track of magnetic stripe data
`exists (POR, pgs. 26, 28)
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`Gutman only teaches a single
`digital representation
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`EX1005, 14:6-16 (POR, pg. 29-30)
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`Neither reference teaches
`“retrieving… from a plurality of digital
`representations”
`• Shoemaker does not resolve the failures of Gutman
`• Shoemaker does not teach that more than one digital
`representation of a track of magnetic stripe data exist at
`one time
`– (POR, pg. 31-34; POSR, pg. 7)
`Instead, Shoemaker merely teaches that one digital
`representation of magnetic stripe data may be generated
`in either a forward direction or a reverse direction, based
`on a detected manner in which its device is swiped
`– (POR, pg. 19)
`
`•
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• At most, Shoemaker teaches small pieces of data stored
`in memory
`
`• EX. 1010, FIGS. 2-3, 7:6-20 (POR, pg. 35-36)
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• These small bits of data even include business and personal
`profiles, which Petitioner falsely regards as digital representations of
`a particular track of magnetic stripe data
`
`• EX. 1010, FIGS. 2-3, 7:6-20 (POR, pg. 35-36)
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• Shoemaker teaches compiling these small pieces of data
`into a track of magnetic stripe data during the transaction
`
`• EX. 1010, 7:6-20 (POR, pg. 35-36)
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• Shoemaker also determines the direction in which the
`track is generated, at the time of the transaction
`
`• EX. 1010, 14:58-65 (POR, pg. 35-36)
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`No motivation to combine
`Gutman with Shoemaker
`• Petitioner claims that it would have been obvious to
`modify Gutman with Shoemaker by incorporating
`Shoemaker’s swipe direction detector into Gutman, and
`then storing at least two digital representations of a track
`in memory
`– Thus, respondents’ combination requires at least
`TWO major modifications of the cited references
`• (POSR, pg. 6-7)
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`No motivation to combine
`Gutman with Shoemaker
`• Petitioner’s combination requires modifying Shoemaker to
`store entire tracks of magnetic stripe data, discarding what
`Shoemaker considers a primary benefit of its disclosure
`• EX. 1010 14:58-
`65 (POR, pg. 36;
`POSR, pgs. 7-8)
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`No motivation to combine
`Gutman with Shoemaker
`• Gutman teaches against incorporating Shoemaker’s
`swipe direction detector into Gutman’s device
`– Gutman expressly teaches that although its device
`can be swiped it transmits data independent of the
`swipe
`• (POSR, pg. 2-4)
`– Thus, as soon as Gutman’s device comes into contact
`with a POS terminal, Gutman’s device has already
`transmitted its only digital representation of the track
`to the POS terminal
`• POSR, pgs. 4-5)
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`No motivation to combine
`Gutman with Shoemaker
`• Thus, Petitioner’s combination requires forcing Gutman’s card
`to be swiped in order to communicate data, which Gutman
`explicitly and directly disparages
`
`• EX. 1010 16:57-
`17:16 (POSR,
`pgs. 6-7)
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`Gutman and Shoemaker
`(Summary)
`• Neither reference teaches “retrieve said digital representation from a
`plurality of digital representations of said at least one track of
`magnetic stripe data.”
`• Gutman explicitly teaches generating a single digital representation
`of a track of magnetic stripe data
`• Shoemaker explicitly teaches generating a single digital
`representation “on the fly”
`– This includes forward and reverse digital representations
`• Gutman expressly teaches against incorporating the forward/reverse
`embodiment from Shoemaker
`• Shoemaker also teaches that business profiles are not a track of
`magnetic stripe data, but merely a piece of data that can be used to
`generate a track
`• Petitioner relies on these two embodiments, and because they both
`fail, Petitioner’s Ground 1 fails
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`The ’153 Patent is not Unpatentable
`Over Lessin in view of Shoemaker
`
`• There is no motivation to combine the references in a
`manner that would provide this limitation, which is
`missing in both references (POR, pg. 38-39)
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`Neither reference teaches
`“retrieving… from a plurality of digital
`representations”
`• Lessin barely has any disclosure regarding its emulator,
`or how its emulator works to communicate a track of
`magnetic stripe data to a POS terminal (POR, pgs. 38-
`39)
`
`• Lessin does not teach that at any point, that more than
`one digital representation of a track of magnetic stripe
`data exists (POR, pg. 41)
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`Lessin does not teach multiple
`digital representations
`• Lessin’s supposed invention is for a graphical user interface
`to improve the user experience, not for improvements to
`magnetic emulation itself (POR, pg. 38; POSR, pg. 12)
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`Lessin does not teach multiple
`digital representations
`•
`In fact, in order to improve this user experience, Lessin
`promotes the use of its device without even using a
`POS terminal at all
`
`• EX. 1011, 1:54-59, 2:3-8 (POR, pgs. 38-39)
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`No motivation to combine Lessin
`with Shoemaker
`
`•
`
`• Lessin is not concerned with making any improvements
`to the emulator/POS interface; Lessin is only concerned
`with improving the user interface (POR, pg. 14)
`In fact, Lessin teaches ways to communicate with a POS
`terminal using only the user interface, without even using
`the emulator (POR, pgs. 44-45)
`• Petitioner provides no reasoning as to why a POSITA
`would have been motivated to modify Lessin with
`Shoemaker (POSR, pgs. 12-13)
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`No motivation to combine Lessin
`with Shoemaker
`• Lessin spends more time discussing how to communicate its device
`independent of a POS terminal than it discusses any way to improve
`interaction between Lessin’s emulator and a POS terminal. Aside
`from highly generalized “improvement” of Lessin, Petitioner provides
`no motivation to combine
`
`• EX. 1011, 21:15-19 (cited in POR, pg. 40)
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`No motivation to combine Lessin
`with Shoemaker
`
`• Lessin’s emulator is not structured for swiping
`
`• EX. 1011, FIG. 22A (cited in POSR, pg. 14)
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`No motivation to combine Lessin
`with Shoemaker
`• Lessin’s emulator is not structured
`for swiping
`– Instead, Lessin teaches a
`transducer that only needs to
`be “aligned” with a read head,
`at which point it merely outputs
`bits of data.
`– Thus, even in the event that
`Lessin’s device interacts with a
`POS terminal, Lessin teaches a
`means that does not require
`swiping, eliminating the
`problems with swipe direction
`cited by Petitioner
`
`• EX. 1011, 19:35-54 (cited in POSR, pg. 14)
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`Neither reference teaches
`“retrieving… from a plurality of digital
`representations”
`• Shoemaker does not overcome Lessin’s failures
`
`• Shoemaker also does not teach that at any given point in
`time, that more than one digital representation of a track
`of magnetic stripe data exists (POR, pgs. 41-43)
`– Shoemaker merely teaches that one digital
`representation is generated based on a swipe
`direction (POR, pg. 44-45)
`
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• To reiterate, Shoemaker teaches small pieces of data
`stored in memory – not complete tracks
`
`• EX. 1010, FIGS. 2-3, 7:6-20 (POR, pgs. 41-43)
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• These small bits of data even include business and personal
`profiles, which Petitioner falsely regards as digital representations of
`a particular track of magnetic stripe data
`
`• EX. 1010, FIGS. 2-3, 7:6-20 (POR, pgs. 41-43)
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• Shoemaker teaches compiling these small pieces of data
`into a track of magnetic stripe data during the transaction
`
`• EX. 1010, 7:6-20 (POR, pgs. 35-36)
`
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`Shoemaker only teaches generating a
`single digital representation “on the
`fly”
`• Shoemaker also determines the direction in which the
`track is generated, at the time of the transaction
`
`• EX. 1010, 14:58-65 (POR, pgs. 41-43)
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`As the Board noted, different profiles
`are not different digital
`representations of a particular track
`• Shoemaker teaches different user profiles
`– Neither Lessin nor Shoemaker teaches that a user profile is a
`track of magnetic stripe data, is a digital representation of such a
`track, or even includes such a track
`– Petitioner conflates “a track” with the general species of “track
`data”
`
`• EX. 1011, 14:1-7 (POR, pgs. 32-33)
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`Lessin and Shoemaker
`(Summary)
`• Neither Lessin nor Shoemaker teach a digital
`representation of at least one track of magnetic stripe
`data
`• Petitioner’s position relies on Shoemaker’s profiles or
`swipe directions being incorporated into Lessin
`• A profile is not a digital representation of a particular
`track
`• Lessin does not need to be swiped, and is structurally
`incompatible swipe, and thus a POSITA would not have
`found it obvious to incorporate Shoemaker’s swiping
`embodiment into Lessin
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`U.S. Pat. No. 10,032,100
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`
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`Grounds for Institution
`
`Decision to Institute, pg. 7
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`U.S. Pat. No. 10,223,631
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`
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`Grounds for Institution
`
`Decision to Institute, pg. 9
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`U.S. Pat. Nos. 10,032,100 and
`10,223,631
`
`• Provides an improvement to
`magnetic emulation
`technology
`• A device that communicates
`data to a POS terminal from
`outside the POS terminal
`• Eliminates need for device
`to be inserted into a card
`reader (POR (for -00502
`and -00504), pgs. 8-9)
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`
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`The Preambles of Claims 1 and 12
`of the ’100 Patent are Limiting
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`
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`Moullette, U.S. Pat. No. 7,114,652
`(Asserted Prior Art)
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`Moullette, U.S. Pat. No. 7,114,652
`(Asserted Prior Art)
`• An adapter to be installed at POS
`terminals (POR (for -00502 and -00504),
`pgs. 9-10)
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`Moullette, U.S. Pat. No. 7,114,652
`(Asserted Prior Art)
`• An adapter to be installed
`at POS terminals
`Involves a “merchant
`pod” including a coil to be
`affixed at a card reader
`(POR (for -00502 and -
`00504), pgs. 8-9, 15)
`
`•
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`Moullette, U.S. Pat. No. 7,114,652
`(Asserted Prior Art)
`• An adapter to be installed
`at POS terminals
`Involves a “merchant
`pod” including a coil to be
`affixed at a card reader
`• Coil must be placed and
`immobilized at a specific
`place with respect to the
`reader (POR (for -00502
`and -00504), pgs. 8-9,
`15)
`
`•
`
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`Dynamics Inc. - EX. 2035
`Page 57
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`
`
`Moullette, U.S. Pat. No. 7,114,652
`(Asserted Prior Art)
`• An adapter to be installed at
`POS terminals
`Involves a “merchant pod”
`including a coil to be affixed
`at a card reader
`• Coil must be placed and
`immobilized at a specific
`place with respect to the
`reader
`• The immobilization makes
`the adapter an integral part
`of the POS terminal (POR
`(for -00502 and -00504),
`pgs. 8-9)
`
`•
`
`58
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`Dynamics Inc. - EX. 2035
`Page 58
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`
`
`Zellner, U.S. Pat. No. 7,097,108
`(Asserted Prior Art)
`
`59
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`Dynamics Inc. - EX. 2035
`Page 59
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`
`
`Zellner, U.S. Pat. No. 7,097,108
`(Asserted Prior Art)
`• A user interface having a
`“dynamic magnetic
`encoder”
`• As opposed to an
`emulator, an encoder
`encodes a magnetic
`stripe (POR, pg. 11 (-
`00502) and pg. 10 (-
`00504))
`
`60
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`Dynamics Inc. - EX. 2035
`Page 60
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`
`
`Zellner, U.S. Pat. No. 7,097,108
`(Asserted Prior Art)
`• As opposed to an
`emulator, an encoder
`encodes a magnetic
`stripe
`– ’545 patent, 5:1-6
`(POSR, pg. 7 (-00505)
`• Zellner does not define,
`or otherwise describe an
`encoder (POR, pg. 17 (-
`00505)
`
`61
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`Dynamics Inc. - EX. 2035
`Page 61
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`
`
`Zellner, U.S. Pat. No. 7,097,108
`(Asserted Prior Art)
`• As opposed to an
`emulator, an encoder
`encodes a magnetic
`stripe
`– ’545 patent, 5:1-6
`(POSR, pg. 7 (-00505)
`• Zellner does not define,
`or otherwise describe an
`encoder (POR, pg. 17 (-
`00505)
`
`62
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`Dynamics Inc. - EX. 2035
`Page 62
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`
`
`Doughty, U.S. Pat. App. Pub. No.
`2006/0161789
`(Asserted Prior Art)
`
`63
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`Dynamics Inc. - EX. 2035
`Page 63
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`
`
`Doughty, U.S. Pat. App. Pub. No.
`2006/0161789
`(Asserted Prior Art)
`• A magnetic emulation
`device that involves a
`programmable magnetic
`stripe installed on a
`substrate EX. 1012 FIG. 3
`(POR, pg. 20 (-00505))
`
`64
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`Dynamics Inc. - EX. 2035
`Page 64
`
`
`
`Doughty, U.S. Pat. App. Pub. No.
`2006/0161789
`(Asserted Prior Art)
`• Once the magnetic stripe
`is encoded with magnetic
`stripe card data by one or
`more coils, the stripe may
`be swiped through a card
`reader
`– EX. 1012 FIGS. 5A-5B
`(POR pgs. 20-21 (-
`0505)
`
`65
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`Dynamics Inc. - EX. 2035
`Page 65
`
`
`
`Doughty, U.S. Pat. App. Pub. No.
`2006/0161789
`(Asserted Prior Art)
`• Doughty ambitiously hints
`that its substrate can be
`incorporated into anything,
`including jewelry, a
`telecommunications device,
`a watch, a key ring, etc.
`– EX. 1012 ¶ [0048] (POR
`pgs. 44-45 (-0502), pg.
`34 (-0504), pgs. 22 (-
`0505))
`• Doughty does not provide
`any explanation as to how
`such integration may be
`accomplished
`
`66
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`Dynamics Inc. - EX. 2035
`Page 66
`
`
`
`Poidomani, U.S. Pat. App. Pub. No.
`2007/0034700
`(Asserted Prior Art)
`
`67
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`
`Dynamics Inc. - EX. 2035
`Page 67
`
`
`
`Poidomani, U.S. Pat. App. Pub. No.
`2007/0034700
`(Asserted Prior Art)
`• Teaches a “broadcaster” (i.e., a coil)
`that must be in physical contact with a
`read-head (POR pgs. 12-13 (-0502))
`
`68
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`Dynamics Inc. - EX. 2035
`Page 68
`
`
`
`Poidomani, U.S. Pat. App. Pub. No.
`2007/0034700
`(Asserted Prior Art)
`• The broadcaster includes four coils in
`parallel with one another, as well as a
`sophisticated system for preventing
`cross-talk between the track 1 and
`track 2 coils (POR pg. 21 (-0502))
`
`69
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`Dynamics Inc. - EX. 2035
`Page 69
`
`
`
`Francini, U.S. Pat. No. 4,701,601
`(Asserted Prior Art)
`
`70
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`Dynamics Inc. - EX. 2035
`Page 70
`
`
`
`Francini, U.S. Pat. No. 4,701,601
`(Asserted Prior Art)
`• Francini is a contact-
`based device, requiring
`that a device be inserted
`into a card reader (POR
`pgs. 11-12 (-0504))
`• Francini discloses
`sending transmissions of
`only one track multiple
`times during a
`transaction (POR pgs.
`11-12 (-0504))
`
`71
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`Dynamics Inc. - EX. 2035
`Page 71
`
`
`
`The Cited References do Not Render
`the Challenged Claims of the ’100 and
`’631 Patents Obvious
`• No reference teaches the “outside the reader”
`limitation
`
`• There is no motivation to combine the cited
`references, particularly in the manners proposed
`by Petitioner
`
`72
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`Dynamics Inc. - EX. 2035
`Page 72
`
`
`
`The Challenged Claims of the ’100 Patent
`are Not Obvious Over Moullette (Ground 1
`for both ’100 and ’631 patents)
`
`• The preamble is limiting – Moullette teaches a system,
`not a device (POR pg. 21 (-0502))
`• Moullette fails to teach “the circuit … operable to
`communicate the data to the read-head, while located
`outside of the magnetic stripe reader at a distance of at
`least a quarter of an inch” (POR pgs. 19 (-0502))
`• Moullette’s interface processor controls only the interface
`for the device, not the circuit (POR pgs. 7-12, 25 (-
`0502), pgs. 21-22 (-0504))
`
`73
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`Dynamics Inc. - EX. 2035
`Page 73
`
`
`
`Moullette Fails to Teach the
`Preamble
`
`• Moullette teaches a system,
`not a device (POR pg. 21 (-
`0502))
`• As annotated FIG. 1 shows,
`Moullette’s system includes
`a M-Pod and a separate C-
`Pod (POR pg. 21 (-0502))
`• Moullette teaches that the
`M-Pod must be affixed to a
`reader at a precise location
`in order to work (POR pgs.
`21-22 (-0502))
`
`74
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`Dynamics Inc. - EX. 2035
`Page 74
`
`
`
`Moullette Fails to Teach the
`Preamble
`
`• Moullette teaches a
`system, not a device
`(POR pgs. 21-22 (-0502))
`
`75
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`Dynamics Inc. - EX. 2035
`Page 75
`
`
`
`Moullette fails to teach “the circuit … operable to
`communicate the data to the read-head, while
`located outside of the magnetic stripe reader at a
`distance of at least a quarter of an inch”
`
`• Moullette’s system must be affixed to a POS terminal,
`because it cannot exist outside the POS terminal
`infrastructure (POR pgs. 21-22 (-0502))
`
`76
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`Dynamics Inc. - EX. 2035
`Page 76
`
`
`
`Moullette interface processor controls only
`the interface for the device (POR pgs. 7-12, 25 (-
`0502), pgs. 21-22 (-0504))
`
`• Moullette says nothing about its
`processor controlling the M-Pod
`or any other part of the “circuit”
`– Nowhere does Moullette
`mention a processor that
`controls the circuit operable
`to emit EM field and
`communicate the data to the
`read-head outside the reader
`• Moullette’s interface processors
`only control interface
`communications, such as
`infrared bidirectional
`communications, Bluetooth,
`cellular communications, etc.
`
`77
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`Dynamics Inc. - EX. 2035
`Page 77
`
`
`
`The Challenged Claims of the ’100 Patent
`are Not Obvious Over Moullette in View of
`Poidomani (Ground 2)
`
`• There is no motivation to combine Moullette with
`Poidomani (POR pgs. 26-29 (-0502), POSR pgs. 12-14
`(-0502))
`– Moullette specifically teaches serial transmission
`rather than parallel transmission
`– Poidomani specifically teaches parallel transmission
`rather than serial transmission
`– It would not have been obvious to a POSITA to
`combine two completely opposing references
`
`78
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`Page 78
`
`
`
`There is No Motivation to Combine
`Moulette and Poidomani (POR pgs. 26-29
`(-0502), POSR pgs. 12-14 (-0502))
`
`Moullette
`
`Poidomani
`
`79
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`Dynamics Inc. - EX. 2035
`Page 79
`
`
`
`The Challenged Claims of the ’100 Patent are Not
`Obvious Over Zellner in View of Moullette (Ground
`3 (‘100) and Ground 2(’631))
`
`• No motivation to combine Zellner and Moullette (POR,
`pg. 30 (-0502), pg. 36 (-0504), POSR, pg. 12 (-0505))
`• Zellner provides no information about how its DME
`(dynamic magnetic encoder) works (POR, pg. 31 (-
`0502), pg. 27 (-0504))
`• Zellner provides no description of circuits needed to
`accomplish its function (POR, pg. 31 (-0502))
`• Zellner does not disclose a portable telephonic device or
`media player (POR, pg. 30 (-0502), pg. 36 (-0504),
`POSR, pg. 15-17 (-0502))
`
`80
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`Dynamics Inc. - EX. 2035
`Page 80
`
`
`
`No motivation to combine Zellner
`and Moullette
`
`• Zellner teaches an encoder
`
`• A PHOSITA would have
`understood that magnetic
`emulators communicate data
`directly to a read-head of a card
`reader without the presence of
`a magnetic medium and
`magnetic encoders change the
`state of magnetic filaments (i.e.,
`magnetic medium) located on a
`magnetic stripe such that
`information may be changed
`(POR, pg. 31-32 (-0502), POR,
`pg. 27 (-0504), POSR pg. 14-15
`(-0502), POSR pg. 14 (-0504))
`
`81
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`Dynamics Inc. - EX. 2035
`Page 81
`
`
`
`No motivation to combine Zellner
`and Moullette
`
`• Zellner teaches an
`encoder
`
`• Thus, Zellner’s encoder
`does not communicate
`directly with a card
`reader at all (POR, pg.
`31-32 (-0502), POR, pg.
`27 (-0504), POSR pg.
`14-15 (-0502), POSR pg.
`14 (-0504))
`
`82
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`Dynamics Inc. - EX. 2035
`Page 82
`
`
`
`No motivation to combine Zellner and
`Moullette (POR, pg. 32 (-0502), POR, pg. 26 (-0504),
`POSR pg. 16 (-0502), POSR pg. 12 (-0504))
`
`•
`
`It would not have been obvious to a POSITA to eviscerate Moullette’s
`and/or Zellner’s opposite purposes by combining them
`
`83
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`Dynamics Inc. - EX. 2035
`Page 83
`
`
`
`Zellner does not provide any
`explanation as to how its encoder
`works (POR, pg. 32 (-0502), POR, pg. 27 (-0504))
`
`Halliday Dep.
`
`Halliday Dep.
`
`84
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`Dynamics Inc. - EX. 2035
`Page 84
`
`
`
`Zellner does not provide any
`description of the “circuit”
`
`• As Petitioner’s expert
`admits, Zellner does not
`describe the encoder, or
`the circuit needed to
`communicate its device
`directly to a POS
`terminal (POR, pg. 31 (-
`0502), POR, pg. 29 (-
`0504))
`
`85
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`Dynamics Inc. - EX. 2035
`Page 85
`
`
`
`Zellner and Moullette do not
`teach portable telephonic devices
`
`• Zellner generally teaches that certain functionalities can be provided
`on a cell phone, but it does not even teach that its encoder
`functionality can be provided on a cell phone, much less an emulator
`(POR, pg. 33 (-0502))
`
`86
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`Dynamics Inc. - EX. 2035
`Page 86
`
`
`
`Zellner and Moullette do not
`teach portable telephonic devices
`• Moullette never teaches
`that its system is a cell
`phone – it only teaches
`that its system must be
`affixed to a POS
`terminal (POR pg. 31-32
`(-0502))
`
`• The cell phone is an
`entirely different device
`from Moullette’s system
`(POR pg. 32 (-0502))
`
`87
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`Dynamics Inc. - EX. 2035
`Page 87
`
`
`
`The Challenged Claims of the ’100 Patent are Not
`Obvious Over Zellner in View of Moullette and
`further in view of Poidomani (Ground 4)
`
`• There is no motivation to combine these THREE
`references
`– Nowhere does Zellner, Moullette, or Poidomani
`mention a need for “faster transaction” or
`“communication flexibility.” (POR pg. 38-39 (-0502))
`
`88
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`Dynamics Inc. - EX. 2035
`Page 88
`
`
`
`No motivation to combine Zellner,
`Moullette, and Poidomani
`
`• Nowhere does Zellner,
`Moullette, or Poidomani
`mention a need for
`“faster transaction” or
`“communication
`flexibility.” (POR pg. 28,
`38-39 (-0502))
`
`89
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`Dynamics Inc. - EX. 2035
`Page 89
`
`
`
`The Challenged Claims of the ’100 and ’631 Patents
`are not Obvious Over Doughty (Grounds 5 (‘100)
`and 3 (’631))
`
`• Doughty fails to teach “a circuit … operable to
`communicate the data to the read-head while located
`outside of the magnetic stripe reader at a distance of at
`least a quarter of an inch from the read-head.” (POR, pg.
`39 (-0502), POR, pg. 31-32 (-0504))
`
`90
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`Dynamics Inc. - EX. 2035
`Page 90
`
`
`
`Doughty fails to teach the “outside the reader”
`limitation
`
`• All of Doughty’s embodiments depict a programmable magnetic stripe (POR,
`pg. 40 (-0502), POR, pg. 32 (-0504))
`
`91
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`Dynamics Inc. - EX. 2035
`Page 91
`
`
`
`Doughty fails to teach the “outside the reader”
`limitation
`
`• Doughty discloses using multiple
`inductive coils or a single inductive coil to
`generate magnetic signals, but varying
`the digital value represented by this signal
`over time to simulate moving the card
`through the card reader. (POR, pg. 40-43
`(-0502), POR, pg. 32-33 (-0504))
`• When a single coil is implemented, a time
`varying signal is applied so that the
`signals traveling through large coil to
`program each of data cells 504-516
`(POR, pg. 40-43 (-0502), POR, pg. 32-33
`(-0504))
`• Doughty did not omit the programmable
`magnetic stripe 502 from FIG. 5B, despite
`Petitioner’s claim that stripe 502 serves
`no purpose in FIG. 5B (POR, pg. 40-43 (-
`0502), POR, pg. 32-33 (-0504))
`
`92
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`Page 92
`
`
`
`Doughty fails to teach the “outside the reader”
`limitation
`
`• As Petitioner’s expert admits, the data
`communicated by Doughty is
`transmitted from the magnetic stripe,
`not the coil, and therefore must be
`swiped (POR, pg. 41 (-0502), POR, pg.
`33 (-0504))
`
`93
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`Dynamics Inc. - EX. 2035
`Page 93
`
`
`
`The Challenged Claims of the ’100 Patent are Not
`Obvious Over Doughty in View of Poidomani
`(Ground 6)
`
`• There is no motivation to combine
`Doughty and Poidomani (POR, pg. 46 (-
`0502))
`
`94
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`Dynamics Inc. - EX. 2035
`Page 94
`
`
`
`There is no motivation to combine Doughty and
`Poidomani
`
`• FIG. 5A shows multiple
`inductive coils each
`corresponsive to a data cell
`within a single magnetic stripe
`which will be swiped in the
`reader (POR, pg. 46-47 (-
`0502), POSR, pg. 21-22 (-
`0502))
`• Parallel transmission is
`neither contemplated nor
`possible for the Doughty’s
`embodiment in FIGS. 5A and
`5B (POR, pg. 46-47 (-0502),
`POSR, pg. 21-22 (-0502))
`
`95
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`Dynamics Inc. - EX. 2035
`Page 95
`
`
`
`The Challenged Claims of the ’100 and ’631 Patents
`are Not Obvious Ove
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