`571.272.7822
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`Paper No. 63
` Filed: August 10, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS
`AMERICA, INC., SAMSUNG RESEARCH AMERICA, INC.,
`Petitioner,
`
`v.
`
`DYNAMICS INC.,
`Patent Owner.
`_______________
`
`IPR2020-00499
`Patent 8,827,153
`_______________
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`
`
`
`JUDGMENT
`Final Written Decision
`Determining No Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
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`IPR2020-00499
`Patent 8,827,153
`We have jurisdiction to hear this inter partes review under 35 U.S.C.
`§ 6, and this Final Written Decision is issued pursuant to 35 U.S.C. § 318(a).
`For the reasons that follow, we determine Petitioner has not shown by a
`preponderance of the evidence that claims 1 and 5–8 of U.S. Patent
`No. 8,827,153 B2 are unpatentable.
`
`I.
`
`INTRODUCTION AND BACKGROUND
`
`A. Procedural History
`Samsung Electronics Co., Ltd., Samsung Electronics America, Inc.,
`and Samsung Research America, Inc. (collectively “Petitioner”) filed a
`Petition requesting an inter partes review of claims 1 and 5–8 of U.S. Patent
`No. 8, 827,153 B2 (Ex. 1001, “the ’153 patent”). Paper 1 (“Pet.”).
`Dynamics Inc. (“Patent Owner”) timely filed a Preliminary Response.
`Paper 8 (“Prelim. Resp.”).
`After institution of trial, Patent Owner filed a Patent Owner Response
`(Paper 48, “PO Resp.”), to which Petitioner filed a Reply (Paper 51, “Pet.
`Reply”). Patent Owner then filed a redacted Sur-Reply (Paper 53, “PO Sur-
`Reply”).
`An oral argument was held on May 12, 2021. A transcript of the oral
`argument is included in the record. Paper 61 (“Tr.”).
`B. Real Parties-in-Interest
`Petitioner identifies itself (Samsung Electronics Co., Ltd., Samsung
`Electronics America, Inc., and Samsung Research America, Inc.) as the real
`parties-in-interest pursuant to 37 C.F.R. § 42.8. Pet. 62. Patent Owner
`identifies only itself as the real party-in-interest pursuant to 37 C.F.R. § 42.8.
`Paper 6, 1. There is no dispute regarding the identification of the real parties-
`in-interest.
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`Related Matters
`C.
`Petitioner informs us of one pending district court proceeding based on
`the ’153 patent that involves Petitioner, Dynamics Inc. v. Samsung Elecs.
`Co., Ltd. et al., Case No. 1:19-cv-6479 (S.D.N.Y.), filed July 12, 2019, which
`was stayed on September 4, 2019. Pet. 62. Petitioner also informs us of one
`proceeding pending before the International Trade Commission (“ITC”), In
`re Certain Mobile Devices With Multifunction Emulators, Inv. No. 337-TA-
`1170 (U.S.I.T.C.), filed July 12, 2019. Id. Petitioner further informs us of
`concurrently filed IPR petitions for three other patents asserted in the above-
`referenced District Court and ITC cases. Id.
`Patent Owner informs us of the same pending proceedings listed
`above. Paper 6 (Patent Owner’s Mandatory Notice), 2–3.
`D.
`The ’153 Patent
`The ’153 patent was filed on July 17, 2012, issued on September 9,
`2014, and is titled “Systems and Methods for Waveform Generation for
`Dynamic Magnetic Stripe Communications Devices.” Ex. 1001, codes (22),
`(45), (54).
`1. Written Description
`The ’153 patent relates to “[d]ynamic magnetic stripe communications
`devices” capable of communicating with payment terminals for carrying out
`purchase transactions without having to be in physical contact with the
`payment terminals through the use of magnetic emulation, rather than using
`data found on the magnetic stripe of payment cards. Ex. 1001, Abstract.
`According to the ’153 patent, a dynamic magnetic communication device
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`includes two main components: (a) a magnetic emulator; and (b) a waveform
`generator. Id. at claim 1.
`The ’153 patent discloses that a magnetic emulator is a device that
`emulates the magnetic stripe of a traditional payment card. Ex. 1001,
`1:22–37. By “emulating” a magnetic stripe, the magnetic stripe emulator is
`capable of interfacing with a magnetic stripe reader of a payment terminal.
`Id. According to the ’153 patent, the magnetic stripe emulator can be “an
`inductor (e.g., a coil)” that “[c]urrent may be provided through . . . to create
`an electromagnetic field operable to communicate with the read-head of a
`magnetic stripe reader.” Id., 2:14–18.
`The ’153 patent describes one embodiment of a card with a magnetic
`stripe emulator, which is illustrated in Figure 1, reproduced below.
`
`
`Figure 1 “is an illustration of a card constructed in accordance with the
`principles of the present invention.” Ex. 1001, 4:40–41. The ’153 patent
`discloses that card 100 may include button 149. Id. at 5:46. According to
`the ’153 patent, button 149 may be used to communicate a waveform via
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`waveform generator 124 through dynamic magnetic stripe communications
`device 102 indicative of a user’s desire to communicate a single track of
`magnetic stripe information. Ex. 1001, 5:46–50.
`The ’153 patent describes another embodiment of a card with a
`magnetic stripe emulator, which is illustrated in Figure 2, reproduced below.
`
`
`Figure. 2 is an illustration of a card, which may include component 202 (e.g.,
`an ASIC, a mixed-signal FPGA, a data acquisition microcontroller or system
`on a chip), processor 218, and dynamic magnetic stripe communications
`device 216. Id. at 8:21–24. Component 202 may include, for example,
`memory 204, symbol processor 206, DAC 208, clock generator 210,
`filter 212, amplifier 214, and waveform processor 222. Id. at 8:24–27.
`The ’153 patent further discloses that waveform generator 222
`retrieves data from memory and allows the device to generate waveforms
`from the retrieved data to be communicated by the magnetic stripe emulator
`and received by a magnetic stripe reader. Id. at Abstract, 2:18–22. The ’153
`patent discloses that the format of that retrieved data is similar to the format
`of data that is stored in a traditional payment card (e.g., “at least one track of
`magnetic stripe data”). Id. at 2:18–22. The ’153 patent explains that the
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`waveform generator “may fluctuate the amount of current travelling through
`the coil such that one or more tracks of magnetic stripe data encoded within
`the analog waveform may be communicated to a read-head of a magnetic
`stripe reader.” Id. The ’153 patent teaches that the analog waveform is
`generated from “a numeric (e.g., digital) representation of a waveform (e.g.,
`an F2F encoded waveform) [that] may be stored within a memory of a card”
`(id. at 2:23–25), and then provided to the magnetic emulator, which outputs a
`magnetic field corresponding to the analog waveform (id. at 1:28–29,
`2:14–18). According to the ’153 patent, the card may also have a digital to
`analog converter (or DAC) that converts the digital waveform from the
`memory into an analog waveform. Id. at 2:40–46. The ’153 patent teaches
`that the analog waveform is “amplified and filtered before being provided to
`a coil of a magnetic emulator,” which produces the magnetic field to be read
`by the magnetic card reader. Id. at 2:44–46; see id. at 1:28–29, 2:14–18.
`The ’153 patent teaches that “[d]ifferent waveforms may be recalled
`from memory based upon a detected mode of operation by a processor of a
`card.” Id. at 3:27–28. In one example in the ’153 patent, “a processor of a
`card may detect a presence of a dual-head magnetic stripe reader and may
`further detect a direction that the card is being swiped through the dual-head
`magnetic stripe reader.” Id. at 3:29–32. According to the ’153 patent, “a
`processor or other device on the card may recall a waveform from a memory
`of the card that corresponds to a forward swipe direction and may
`communicate a forward-swipe waveform when a forward swipe direction is
`detected.” Id. at 3:32–36. Another example in the ’153 patent teaches that “a
`processor or other device on the card may recall a waveform from a memory
`of the card that corresponds to a reverse swipe direction and may
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`communicate a reverse-swipe waveform when a reverse swipe direction is
`detected.” Id. at 3:36–40. As per another example in the ’153 patent, “each
`digital waveform stored within a memory of a card may contain the same
`magnetic stripe information, but may exhibit different characteristics when
`communicated to a read-head of a magnetic stripe reader.” Id. at 3:41–45.
`The ’153 patent also teaches that “[e]ach digital waveform stored
`within memory 204 may be indicative of the same, or different, magnetic
`stripe information.” Id. at 8:63–65, Fig. 2. In one example in the ’153
`patent, “a first waveform stored within memory 204 may, for example, be
`representative of a first track of magnetic stripe information that may be
`communicated by dynamic magnetic stripe communications device 216.” Id.
`at 8:65–9:1. According to the ’153 patent, “[d]igital waveforms stored within
`memory 204 may, for example, represent the same magnetic stripe
`information, but may exhibit different characteristics.” Id. at 9:25–27. As
`per another example in the ’153 patent, “a first waveform may define signal
`characteristics that are known to be optimal based upon a particular type of
`magnetic stripe reader that card 200 is being presented to.” Id. at 9:27–30.
`As per another example in the ’153 patent, “processor 218 may detect that
`card 200 is being presented to, for example, a dual-head magnetic stripe
`reader.” Id. at 9:36–38. In addition, “processor 218 may detect a swipe
`direction that card 200 is being swiped through the dual-head magnetic stripe
`reader.” Id. at 9:38–40. The ’153 patent teaches that “a waveform having
`symbols arranged in a forward direction may be retrieved by symbol
`processor 206, converted to an analog waveform, and communicated by
`dynamic magnetic stripe communications device 216 in response to a
`forward direction swipe being detected by processor 218.” Id. at 9:41–45. In
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`an alternate example in the ’153 patent, “a waveform having symbols
`arranged in a reverse direction may be retrieved by symbol processor 206,
`converted to an analog waveform, and communicated by dynamic magnetic
`stripe communications device 216 in response to a reverse-direction swipe
`being detected by processor 218.” Id. at 9:46–51.
`Another embodiment disclosed in the ’153 patent indicates that a
`dynamic magnetic communication device may take the form of a mobile
`phone or personal computing device. Id. at 6:4–9, 14:20. The ’153 patent
`also discloses that a dynamic magnetic communication device may store
`information such as a cardholder’s name, username, card issue date, card
`expiration date, and a dynamic security code as well as graphical information
`such as logos and barcodes. Id. at 5:3–27.
`2. Illustrative Claim
`As noted above, Petitioner challenges claims 1, 5–8, with claim 1
`being independent. Challenged independent claim 1 is illustrative of the
`challenged claims and is reproduced below:
`1. A device comprising:
`a magnetic stripe emulator operable to communicate an analog
`waveform encoded with at least one track of magnetic stripe data
`to a magnetic stripe reader; and
`a waveform generator operable to generate said analog waveform
`from a digital representation of said at least one track of magnetic
`stripe data,
`wherein said device is operable to retrieve said digital
`representation from a plurality of digital representations of said
`at least one track of magnetic stripe data.
`Ex. 1001, 15:14–23.
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`Evidence of Record and Asserted Challenges to Patentability
`E.
`Petitioner asserts the following challenges to patentability (see Pet. 11,
`
`5–8):
`
`Reference(s)/Basis
`
`35 U.S.C. §1 Challenged Claim(s)
`
`Gutman2, Shoemaker3
`
`§ 103(a)
`
`1, 5–8
`
`Lessin4, Shoemaker
`
`§ 103(a)
`
`1, 5–8
`
`Petitioner submits the Declaration of Stephen G. Halliday, B.Sc.
`(“Mr. Halliday”) in support of Petition for Inter Partes Review (Ex. 1002).
`Patent Owner submits the Declaration of Ivan Zatkovich, M.S.
`(“Mr. Zatkovich”) in support of Patent Owner’s Response (Ex. 2033). Both
`declarants were deposed. Ex. 1032 (Zatkovich Deposition); Ex. 2030,
`Ex. 2031 (Halliday Depositions). In addition, Patent Owner relies on a
`deposition of Stuart Lipoff, its expert witness from the ITC litigation.
`Ex. 2034. The parties submitted numerous other documents into the record.
`F. Relevant Legal Standards
`A claim is unpatentable under 35 U.S.C. § 103(a) if “the differences
`between the subject matter sought to be patented and the prior art are such
`
`
`1 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(September 16, 2011) (“AIA”), included revisions to 35 U.S.C. §103 that
`became effective on March 16, 2013. Because the ’153 patent issued from an
`application filed before March 16, 2013, we apply the pre-AIA version of the
`statute.
`2 U.S. Patent No. 6,206,293, issued Mar. 27, 2001 (Ex. 1005, “Gutman”).
`3 U.S. Patent No. 7,690,580, issued Apr. 6, 2010 (Ex. 1010, “Shoemaker”).
`4 U.S. Patent No. 4,868,376, issued Sep. 19, 1989 (Ex. 1011, “Lessin”).
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`that 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 said
`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 skill in the art; and (4) when present, objective evidence of
`nonobviousness, i.e., secondary considerations. See Graham v. John Deere
`Co. of Kansas City, 383 U.S. 1, 17–18 (1966). “[I]t is error to reach a
`conclusion of obviousness until all [the Graham] factors are considered.”
`Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1048 (Fed. Cir. 2016) (en
`banc) (citations omitted). “This requirement is in recognition of the fact that
`each of the Graham factors helps inform the ultimate obviousness
`determination.” Id.
`“To satisfy its burden of proving obviousness, a petitioner cannot
`employ mere conclusory statements. The petitioner must instead articulate
`specific reasoning, based on evidence of record, to support the legal
`conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d
`1364, 1380 (Fed. Cir. 2016). “While the sequence of these questions might
`be reordered in any particular case,” KSR Int’l Co. v. Teleflex Inc., 550 U.S.
`398, 407 (2007), the U.S. Court of Appeals for the Federal Circuit has
`“repeatedly emphasized that an obviousness inquiry requires examination of
`all four Graham factors and that an obviousness determination can be made
`only after consideration of each factor,” Nike, Inc. v. Adidas AG, 812 F.3d
`1326, 1335 (Fed. Cir. 2016), overruled on other grounds by Aqua Prods.,
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`Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc). The analysis below
`addresses all four Graham factors.
`G. Burden of Proof
`“In an [inter partes review], the petitioner has the burden from the
`onset to show with particularity why the patent it challenges is unpatentable.”
`Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016)
`(citing 35 U.S.C. § 312(a)(3) (requiring inter partes review petitions to
`identify “with particularity . . . the evidence that supports the grounds for the
`challenge to each claim”)). This burden of persuasion never shifts to Patent
`Owner. See Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
`800 F.3d 1375, 1378 (Fed. Cir. 2015) (discussing the burden of proof in inter
`partes review). Furthermore, Petitioner cannot satisfy its burden of proving
`obviousness by employing “mere conclusory statements.” Magnum Oil
`Tools, 829 F.3d at 1380.
`Thus, to prevail in an inter partes review, Petitioner must explain how
`the proposed combinations of prior art would have rendered the challenged
`claims unpatentable. At this final stage, we determine whether a
`preponderance of the evidence of record shows that the challenged claims
`would have been obvious over the cited prior art. 35 U.S.C. § 316(e).
`H. Level of Ordinary Skill in the Art
`In determining whether an invention would have been obvious at the
`time it was made, we consider the level of ordinary skill in the pertinent art at
`the time of the invention. Graham, 383 U.S. at 17. “The importance of
`resolving the level of ordinary skill in the art lies in the necessity of
`maintaining objectivity in the obviousness inquiry.” Ryko Mfg. Co. v.
`Nu-Star, Inc., 950 F.2d 714, 718 (Fed. Cir. 1991). The person of ordinary
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`skill in the art is a hypothetical person who is presumed to have known the
`relevant art at the time of the invention. In re GPAC, Inc., 57 F.3d 1573,
`1579 (Fed. Cir. 1995). The level of ordinary skill in the art may be reflected
`by the prior art of record. Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed.
`Cir. 2001). Factors that may be considered in determining the level of
`ordinary skill in the art include, but are not limited to, the types of problems
`encountered in the art, the sophistication of the technology, and educational
`level of active workers in the field. GPAC, 57 F.3d at 1579. In a given case,
`one or more factors may predominate. Id. Generally, it is easier to establish
`obviousness under a higher level of ordinary skill in the art. Innovention
`Toys, LLC v. MGA Entm’t, Inc., 637 F.3d 1314, 1323 (Fed. Cir. 2011) (“A
`less sophisticated level of skill generally favors a determination of
`nonobviousness . . . while a higher level of skill favors the reverse.”).
`Petitioner argues that a person having ordinary skill in the art at the
`time of the alleged invention “would have had at least a Bachelor’s degree in
`Electrical Engineering, or an equivalent technical degree or equivalent work
`experience, and knowledge regarding the use of magnetic fields to transmit or
`otherwise convey information.” Pet. 20 (citing Ex. 1002 ¶¶ 33–34).
`Petitioner further argues that “[a]dditional education might supplement
`practice experience and vice-versa.” Id.
`Patent Owner argues that a person having ordinary skill in the art at the
`time of the alleged invention would have had “the equivalent of an
`undergraduate degree in electrical engineering or computer science (or
`related field) and at least three years of work experience with point of sale
`systems and the use of magnetic fields to convey information.” PO Resp. 24.
`According to Patent Owner, “[a]dditional industry experience in the field
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`could substitute for the undergraduate degree, while additional education in
`the field could substitute for industry experience.” Id.
`Based on our review of the ’153 patent, the types of problems and
`solutions described in the ’153 patent and cited prior art, and the testimony of
`both Mr. Halliday (see Ex. 1002 ¶¶ 33–34) and Mr. Zatkovich (see Ex. 2033
`¶ 17), for purposes of this Decision, we find that a person of ordinary skill in
`the art at the time of the claimed invention would have had at least a
`Bachelor’s degree in electrical engineering, or an equivalent technical degree
`and three years of experience working with magnetic fields to transmit or
`otherwise convey information, magnetic stripe cards and emulators, RFID
`systems, and cellular network communications. Although we find Patent
`Owner provides insufficient evidence explaining why a person of ordinary
`skill in the art would have also had experience specifically with point of sale
`systems and therefore do not include that additional requirement in our
`finding above, we note that our analysis would be the same under either
`party’s proposed level of skill in the art.
`I. Claim Construction
`We interpret a claim “using the same claim construction standard that
`would be used to construe the claim in a civil action under 35 U.S.C. 282(b).”
`37 C.F.R. § 42.100(b) (2019). Under that standard, claim terms are presumed
`to have their ordinary and customary meaning, as would have been
`understood by one of ordinary skill in the art, in the context of the entire
`disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed.
`Cir. 2007). To rebut this presumption by acting as a lexicographer, the
`patentee must give the term a particular meaning in the specification with
`“reasonable clarity, deliberateness, and precision.” In re Paulsen, 30 F.3d
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`1475, 1480 (Fed. Cir. 1994). Limitations, however, are not to be read from
`the specification into the claims. In re Van Geuns, 988 F.2d 1181, 1184
`(Fed. Cir. 1993). In addition, the Board may not “construe claims during [an
`inter partes review] so broadly that its constructions are unreasonable under
`general claim construction principles.” Microsoft Corp. v. Proxyconn, Inc.,
`789 F.3d 1292, 1298 (Fed. Cir. 2015) (overruled on other grounds by Aqua
`Products, 872 F.3d at 1290).
`Petitioner states that it does not believe any terms need be construed to
`resolve the prior art issues presented in the Petition. Pet. 20. Petitioner notes
`there were claim construction issues in the ITC proceeding. Id. at 20–21
`(citing Ex. 1016, 4–5). Petitioner further states the challenged claims are
`rendered obvious by the cited prior art references under either party’s
`proposed construction in the ITC proceeding. Id. at 21. Patent Owner does
`not indicate whether it believes any terms require construction to resolve any
`dispute it has with Petitioner’s position. PO Resp. 24–26. Nonetheless,
`Patent Owner presents the claims constructions proposed by the parties in the
`ITC and the constructions rendered by the ITC. Id. at 22–23 (citing
`Ex. 2012).
`Because no express construction is needed to resolve any dispute in
`this proceeding, we do not construe any of the claim limitations. See, e.g.,
`Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1005,
`1017 (Fed. Cir. 2017); Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200
`F.3d 795, 803 (Fed. Cir. 1999) (“[O]nly those terms need be construed that
`are in controversy, and only to the extent necessary to resolve the
`controversy.”).
`
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`II. ANALYSIS
`
`A.
`
`Alleged Obviousness of Claims 1, 5‒8 of the ’153 Patent in View of
`Gutman and Shoemaker
`Petitioner contends claims 1, 5‒8 of the ’153 patent are unpatentable
`under 35 U.S.C. § 103 as obvious in view of Gutman and Shoemaker.
`Pet. 12, 25–44. Patent Owner disputes Petitioner’s contentions. PO
`Resp. 26–38. For reasons that follow, we determine Petitioner has not
`established by a preponderance of the evidence that the challenged claims
`would have been obvious under 35 U.S.C. § 103 in view of Gutman and
`Shoemaker.
`
`Overview of Gutman (Ex. 1005)
`1.
`Gutman is a U.S. Patent titled “Magnetically Communicative Card.”
`Ex. 1005, code (54). Gutman attempts to solve certain problems associated
`with conventional magnetic stripe5 cards (such as credit cards), including the
`wear and tear of the magnetic card stripe, their susceptibility to fraudulent
`copying, and their limited data storage capacity due to the dimensions of the
`card that are governed by the ANSI6 standards. Id. at 2:9–31. Rather than
`only turning to smart cards, which would render conventional magnetic card
`readers “obsolete” (id. at 2:49–53), Gutman teaches a card that can
`magnetically communicate data to conventional magnetic card readers
`without swiping to overcome the identified problems. Id. at Abstract, 17:3–
`4.
`
`
`5 Certain references use the term “stripe,” while other references use “strip.”
`We consider these terms interchangeable.
`6 American National Standards Institute (“ANSI”) is a private non-profit
`organization that oversees the development of voluntary consensus standards
`for products, services, processes, systems, and personnel in the United States.
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`An embodiment of Gutman is shown in Figure 2, reproduced below:
`
`
`Figure 2, above, is a diagrammatic representation of a conventional magnetic
`stripe card reader and an electrical block diagram of a magnetically
`communicative card having three conductors. Id. at 3:1–4. In Figure 2,
`magnetically communicative card 200 is inserted in slotted portion 104 of
`magnetic card reader 100. Id. at 3:46–48. When this happens, conductor 204
`corresponds to magnetic reading bead 103 of magnetic reading
`mechanism 102 of magnetic card reader 100. Id. at 3:53–56. Conductor 204
`is electrically coupled to at least one driver circuit 206 for driving electrical
`signals through conductor 204. Id. at 3:57–58. Controller 208 is coupled to
`driver circuit 206 for controlling the operation of driver circuit 206. Id.
`at 3:59–61. Controller 208, when coupling the data signal to the driver
`circuit 206, causes driver circuit 206 to electrically drive conductor 204 in
`accordance with the data signal. Id. at 3:62–65. The electrically driven
`conductor 204 emits an alternating polarity magnetic field about
`conductor 204. Id. at 3:66–67. The alternating polarity of the magnetic field
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`about conductor 204 comprises magnetic flux transitions. Id. at 4:1–3.
`These magnetic flux transitions can be picked up by magnetic reading
`bead 103 and detected by magnetic card reader 100 to indicate bits of
`information corresponding to the data signal provided by controller 208. Id.
`at 4:3–7.
`One embodiment of conductor 204 on magnetically communicative
`
`card 200 is shown in Figure 3, reproduced below.
`
`
`Figure 3, above, is a simplified diagrammatic representation of a magnetic
`reading head in proximity to a magnetically communicative card having one
`conductor. Ex. 1005, 3:5–8. In Figure 3, card 200 is shown in close
`proximity to magnetic reading bead 308. Id. at 5:43–44. As shown in
`Figure 3, above, conductor 204 is wound about a ferrite core 302 in the
`approximate shape of a coil. Id. at 7:15–16. Gutman discloses that controller
`208 is coupled to switch circuit 316 for selectively coupling conductor 204 to
`either driver circuit 304 or detector circuit 318. Id. at 5:45–48. Driver circuit
`304 causes a current in conductor 204, with changes in such current
`producing a magnetic field in the vicinity of the conductor. Id. at 5:48–50.
`Detector circuit 318 responds to current in conductor 204, the current
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`changing as a result of the conductor intercepting a changing magnetic field.
`Id. at 5:51–53.
`
`Overview of Shoemaker (Ex. 1010)
`2.
`Shoemaker is a U.S. Patent titled “Transaction Cards Having
`Dynamically Reconfigurable Data Interface and Methods for Using Same.”
`Ex. 1010, code (54). Shoemaker discloses a device that can store multiple
`tracks of the same or different data to address the problems associated with
`conventional magnetic stripe cards, such as susceptibility to fraud and
`damage. Id. at 1:63–2:67, 5:45–49, 6:49–60, 8:42–51. Specifically,
`Shoemaker discloses an “[a]ctive credit card 102 [with] a logic circuit 106,
`representing the electronic circuitry (such as ASIC logic, processor, clock,
`volatile and/or nonvolatile memory, etc.) employed to generate data for
`programming the data pattern that appears on dynamically reconfigurable
`data interface 104.” Id. at 5:57–62.
`One embodiment of Shoemaker’s active card 102 is shown in
`Figure 1A, reproduced below.
`
`
`Figure 1A, above, is a diagram of an active credit card having a dynamically
`reconfigurable data interface attached to or formed on card base 120, where
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`the interface is compatible with existing magnetic stripe card processing
`infrastructure. Ex. 1010, 3:41–43, 4:57–59, 5:45–48. Active card 102 also
`includes a logic circuit 106, representing the electronic circuitry used to
`generate data for programming the data pattern that appears on dynamically
`reconfigurable data interface 104. Id. at 5:56–5:62. The data pattern is
`“provided to a reconfiguration controller, such as a magnetizing
`controller 118, which generates the appropriate electrical signals to configure
`data interface 104 such that the data that appears on dynamically
`reconfigurable data interface 104 can be read by an existing magnetic stripe
`card reader.” Id. at 6:4–9. The active card also includes “a magnetizing
`controller” and “a logic circuit” and “[t]o accomplish a transaction, logic
`circuit [] provides data to magnetizing controller [] to enable magnetizing
`controller to dynamically reconfigure data interface [], thereby transmitting a
`data pattern to a magnetic stripe card reader.” Id. at 6:26–30.
`Shoemaker further discloses that its card can encode the same track
`data (such as in a forward or reverse manner) depending on the swipe
`direction. Id. at 14:65–15:6 (“For example, if a card reader expects a left-to-
`right swiping direction to decode the pattern a-b-c, the swiping of the
`inventive card in the right-to-left direction would trigger the swipe detector
`on the left side of the card, thereby causing the magnetizing order to provide
`the data pattern in the c-b-a order on the dynamically reconfigurable data
`interface. In this manner, the reader will be able to decode the correct pattern
`a-b-c even when the card is swiped in the right-to-left direction.”).
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`3.
`
`Analysis of Gutman and Shoemaker as Applied to Challenged
`Independent Claim 1
`
`a. Preamble
`Claim 1 recites “[a] device comprising.” Ex. 1001, 15:14.
`Petitioner contends that “Gutman discloses a device that communicates
`with a magnetic card reader.” Pet. 25 (citing Ex. 1005, Figs. 2–3 (showing
`card 200), 7:48–8:18 (describing card 400 in Figure 4), 11:31–12:16
`(describing card 500 in Figure 5)). To support its contention, Petitioner relies
`on Gutman’s description of “card 200 with at least one conductor 204 that
`emits an alternating polarity magnetic field (i.e., magnetic flux transitions)
`about the conductor 204 such that the card can communicate with a magnetic
`reading head 103 of a magnetic card reader 100.” Id. (citing Ex. 1005, 3:62–
`4:1).
`Patent Owner does not dispute Petitioner’s contentions. See generally
`PO Resp. Nonetheless, the burden remains on Petitioner to demonstrate
`unpatentability. See Dynamic Drinkware, 800 F.3d at 1378.
`“Whether to treat a preamble term as a claim limitation is determined
`on the facts of each case in light of the claim as a whole and the invention
`described in the patent.” Am. Med. Sys., Inc. v. Biolitec, Inc., 618 F.3d 1354,
`1358 (Fed. Cir. 2010) (internal quotation marks and citation omitted).
`Regardless of whether the preamble is limiting, based on the entirety of
`the trial record, we find Petitioner has shown that Gutman discloses a
`“device.”
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`b. a magnetic stripe emulator operable to communicate an analog
`waveform encoded with at least one track of magnetic stripe data to
`a magnetic stripe reader
`Claim 1 recites “a magnetic stripe emulator operable to communicate
`an analog waveform encoded with at least one track of magnetic stripe data
`to a magnetic stripe reader.” Ex. 1001, 15:15–17.
`Petitioner contends that Gutman discloses this limitation because it
`uses conductor 204, which emits magnetic flux transitions representing tracks
`of magnetic stripe data that can be read by magnetic card reader 100.
`Pet. 26–27 (citing Ex. 1005, 3:56–4:7, 4:31–35). Petitioner argues that
`“[b]ecause conductor 204 emulates a track of magnetic stripe data, no
`‘swiping’ movement is necessary.” Id. (citing Ex. 1005, 17:3–4). That is,
`according to Petitioner, “data can be magnetically communicated from the
`card to the magnetic stripe reader independent of the swiping movements
`associated with c