Trials@uspto.gov
`571-272-7822
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`Paper 53
`Date: July 22, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________
`
`SAMSUNG, INC.,
`Petitioner
`
`v.
`
`DYNAMICS, INC.,
`Patent Owner.
`
`__________
`
`IPR2020-00499 Patent 8,827,153
`IPR2020-00502 Patent 10,032,100
`IPR2020-00504 Patent 10,223,631
`IPR2020-00505 Patent 10,255,545
`
`__________
`
`
`Record of Oral Hearing
`Held: May 12, 2021
`__________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
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`571-272-7822
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`Paper 53
`Date: July 22, 2021
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________
`
`SAMSUNG, INC.,
`Petitioner
`
`v.
`
`DYNAMICS, INC.,
`Patent Owner.
`
`__________
`
`IPR2020-00499 Patent 8,827,153
`IPR2020-00502 Patent 10,032,100
`IPR2020-00504 Patent 10,223,631
`IPR2020-00505 Patent 10,255,545
`
`__________
`
`
`Record of Oral Hearing
`Held: May 12, 2021
`__________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`
`
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`
`
`
`
`
`
`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`JAMES MARINA
`ALAN RABINOWITZ
`Kirkland & Ellis LLP
`1301 Pennsylvania Avenue, N.W.
`Washington, DC 20004
`202-389-5000
`James.marina@kirkland.com
`Alan.rabinwoitz@kirkland.com
`
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`ROBERT W. MORRIS
`Eckert Seamans Cherin & Mellott, LLC
`1717 Pennyslvania Avenue, N.W.
`Washington, DC 20006
`202-659-6600
`rwmorris@eckertseamans.com
`
`MICHAEL V. MESSINGER
`Shami Messinger PLLC
`1000 Wisconsin Ave, N.W.
`Suite 200
`Washington, DC 20007
`202-516-6900
`mike@shaminessinger.com
`
`
`
`The above-entitled matter came on for hearing on Wednesday,
`
`May 12, 2021, commencing at 1:00 p.m. EDT, via Video Teleconference.
`
`
`
`
`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`P-R-O-C-E-E-D-I-N-G-S
`
`
`
`1:00 p.m.
`JUDGE BRADEN: So good afternoon, everyone. We are convened
`here today for oral arguments in IPR2020-00499 which challenges US
`patent number 7,386,046; IPR2020-00502 which challenges US patent
`number 10,032,100; IPR2020-00504 which challenges US patent number
`10,223,631; and IPR2020-00505 which challenges US patent number
`10,255,545.
`I am Judge Braden. Also appearing virtually are my colleagues,
`Judge Jefferson and Judge Jurgovan.
`Before we begin today, we would like to thank you for your
`flexibility in conducting this hearing via video.
`Given that this is a departure from our normal practice, we would
`like to start by clarifying a few items.
`First, our primary concern is your right to be heard. If at any time
`during the proceeding you encounter technical difficulties that undermine
`your ability to adequately argue your case, please disconnect from WebEx
`and try to reconnect into WebEx and let the panel know where you were
`when you dropped off.
`If you cannot reconnect, please dial in using the phone number
`provided by the PTAB hearing and IT personnel.
`Second, for the benefit of the judges, opposing counsel, and court
`reporter, please identify yourself when you begin your argument and speak
`clearly into the microphone. Please do not speak when others are speaking.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`Also, please identify the specific slide number when referring to
`demonstratives.
`Third, and very importantly, please mute yourself when you are not
`speaking.
`Finally, we have not received a notice from either party that business
`confidential information will be discussed or disclosed during the course of
`this hearing.
`That being said, please be aware that third parties are virtually
`attending this hearing.
`Therefore, if you plan to divulge any business confidential
`information, you need to inform the panel so we may wall off the third
`parties for that portion of the hearing. Petitioner's counsel, do you
`understand?
`MR. MARINA: Yes, I do.
`JUDGE BRADEN: Patent owner's counsel, do you understand?
`MR. MORRIS: This is Robert Morris. Yes.
`JUDGE BRADEN: Very good. Thank you. Per the hearing order,
`which is Paper 57 in IPR2020-00499, each party has 90 minutes total time to
`argue their cases.
`Petitioner, Samsung Electronics, has the ultimate burden of
`establishing unpatentability.
`Therefore, petitioner will open the hearing by presenting its cases as
`presented in its petitions regarding the alleged unpatentability of the
`challenged claims.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`Petitioner may reserve rebuttal time but no more than half of its total
`argument time.
`Thereafter, patent owner, Dynamics, Inc., will respond to petitioner's
`arguments.
`Patent owner may reserve surrebuttal time of no more than half its
`total argument time to respond to petitioner's rebuttal.
`Otherwise, the parties may use its allocated or allotted time to
`discuss the cases however they choose.
`We ask, however, that you make it clear which proceeding,
`challenges, and claims you are addressing.
`In order to ensure clarity of the record, following the hearing, please
`email the court reporter with a list of word spellings unless you have already
`done so.
`Lastly, we ask the parties to hold any objections regarding the
`opposing party's arguments until it is their time to talk.
`To be clear, we will not take objections during a party's arguments.
`You must wait until it is your time to talk to note any objections.
`I will maintain a clock and inform the parties when they have five
`minutes left for each of their turns to argue.
`So let's get started with official appearances for both sides. We will
`start with petitioner.
`MR. MARINA: Thank you. This is James Marina from Kirkland &
`Ellis for the Samsung petitioners.
`Also speaking today will be my partner, Alan Rabinowitz, who's
`taken off camera but will switch into this seat when it's his time to talk.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`JUDGE BRADEN: Very good. Thank you. And patent owner?
`MR. MORRIS: Sure. For patent owner, this is Robert Morris from
`the firm of Eckert Seamans Cherin & Mellott, and I will be the only one
`arguing today.
`JUDGE BRADEN: Very good. Thank you very much. Petitioner,
`do you wish to reserve any rebuttal time?
`MR. MARINA: Yes, I do. And in this regard, if I may, we met and
`conferred before the hearing to talk about potential ways to sort of
`streamline and make the hearing a little more focused.
`And what we came up with and what we propose is that we argue in
`three groups.
`One would be the '499 petition on the '153 patent, complete
`argument on that patent, and move on to the '161 patents because they have
`overlapping issues.
`Complete argument on that and then move on finally to the '545 and
`complete argument on that patent separately. If that's agreeable, we can --
`JUDGE BRADEN: Actually --
`MR. MARINA: -- proceed that way --
`JUDGE BRADEN: -- that is agreeable. So do you intend to have
`rebuttal time for each of your three parts?
`MR. MARINA: Correct. So the -- what we agreed upon is for the
`'499 proceeding would be 30 minutes total time, and we would reserve 10
`minutes of that for rebuttal.
`For the '502 and '504 proceedings, it would be 35 minutes per side
`obviously. And we, Samsung, would reserve 10 minutes there.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`And then for the final '505 IPR, it would be 25 minutes per side and
`7 minutes for rebuttal, for Samsung at least.
`JUDGE BRADEN: Very good. Patent owner, is there any -- please
`confirm that you agree to this.
`And second, please let me know if you have rebuttal time already
`planned for each of these three portions.
`MR. MORRIS: First of all, we do agree. As Mr. Marina said, we
`had confirmed, came to agreement.
`Second, with regard to surrebuttal time, I would reserve 7 minutes
`for each one of the three arguments.
`JUDGE BRADEN: Very good. Thank you, counselor. Are there
`any questions or other issues that the parties would like to raise before we
`begin starting with petitioner?
`MR. MARINA: This is James Marina. No, Your Honor.
`JUDGE BRADEN: Thank you. And patent owner?
`MR. MORRIS: This is Robert Morris. No, Your Honor.
`JUDGE BRADEN: Very good. Then petitioner, you may begin
`your arguments when ready.
`MR. MARINA: Thank you. Again, James Marina for petitioner.
`So looking at the slides, I'll start with slide 1 of the '153 presentation.
`Here, I'm just going to give you a quick overview of what I intend to
`cover and an overview of the issues.
`So for the '153 patent, there are five challenged claims. One is
`independent. Three are dependent. There are four dependent, sorry.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`There are two grounds. Gutman in view of Shoemaker, that's ground
`1, Lessin in view of Shoemaker, ground 2.
`There is only one disputed element of one claim, and that's the
`wherein clause of claim 1.
`The remaining elements of claim 1 and the dependent elements of
`claims 5 through 8 are not in dispute. So we'll be focused today on this
`wherein clause.
`And given the time, I intend to focus my comments on the Gutman-
`Shoemaker round 1 combination.
`But we'll -- if I have time, we'll turn to the Lessin-Shoemaker as
`
`well.
`
`So with that, I'll turn to slide number 2. And here, it's sort of an
`overview of the '153 patent.
`Essentially, the '153 patent directed to a magnetic emulator which
`uses what's called a waveform generator that creates a fluctuating magnetic
`field that mimics the swiping of a traditional credit card.
`And you could put that in a card slot, and the reader will -- the card
`reader will think that you're actually swiping a card.
`That is not new technology. That's been known since the 1980s.
`For example, we cite in our paper a patent to Francini from Visa.
`The point of novelty for the '153 patent is the notion of storing on the
`card multiple representations or a plurality of representations of the same
`track.
`
`And there are a number of examples given in the patent for this.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`But the one version to be focused on today is the notion of forward
`and reverse tracks, meaning the order of the data, of presentation of the data
`that makes up the track that would find on a credit card.
`As the patent notes -- the '153 patent notes, there are some readers
`that will be swipe-dependent.
`And so when you swipe a card in a certain direction, you want to
`make sure that the data you're providing to the reader matches the swipe
`direction so it could be read properly.
`JUDGE BRADEN: So counsel, this is Judge Braden. Could we go
`ahead and skip to the part about Gutman and not having to swipe at all?
`And could you explain to us why you believe that, despite Gutman
`not having to swipe either forward or backward, you believe that it stores
`multiple representations and at least one of those is used in a process?
`MR. MARINA: Right. So our position is it would be obvious to do
`
`so.
`
`And if I could get -- if I could start, though, briefly with the
`Shoemaker reference because that is what provides the motivation to do this.
`And I think that's sort of answers a lot of the questions that you're
`going to see in the briefing.
`So if I turn to slide 19 which is a call out to the Shoemaker reference.
`Shoemaker tells us -- and this is -- keep in mind, this is in 2006.
`This is nine years after Gutman is filed and six or so years before the
`'153 patent is filed.
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`IPR2020 00504 Patent 10,223,631
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`But what Shoemaker teaches to a person of ordinary skill in the art is
`that there are going to be payment terminals and magnetic strip readers in
`the world that require a specific swipe direction.
`And many of us many have experienced this when we're shopping.
`If you go through a card reader in the days when you used to actually
`swipe cards, you might see an arrow on the reader saying swipe this way.
`And if you swipe the other way, it wouldn't work.
`Or you might see a merchant, for example, take your credit card and
`quickly swipe it multiple ways because it won't work unless you get the right
`direction.
`And so that's the teaching of Shoemaker. You want to be able to sort
`of reverse or present your track in a swipe-appropriate manner so you'll have
`the most compatibility with the card readers that exist in the world.
`And so with that problem presented by Shoemaker and also
`identified by the '153 patent six years later.
`And when we look at Gutman, yes, it is true that Gutman does not
`need to be swiped. And will present its track independent of swipe
`direction.
`But that's precisely the problem with Gutman. It's a problem that
`Gutman didn't realize in 1997.
`But Shoemaker realizes it in 2006. And a person of ordinary skill in
`the art would realize it in 2011, namely that, if Gutman's tracks are only in
`one direction, right, and there's no ability to reverse them from the stored
`direction, that card will not work in every reader. It will encounter
`difficulties in the marketplace.
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`Gutman, for whatever reason, doesn't acknowledge that problem,
`didn't realize it, and doesn't address it, right?
`So the problem, right, we're proposing to cure in Gutman is one
`that's identified later by Shoemaker and then by the '153 patent is that you
`want to be able to have multi-directional tracks to account for the different
`ways you're going to find in the world.
`So with that background, if we go to Gutman and we can look at
`slide 23, for example.
`So Gutman tells you, yes, you don't have to swipe because it's an
`emulator which is basically like an antenna which is something you signal
`out, right?
`But it notes specifically that the card may still be swiped through a
`magnetic reader and touts this as a benefit because it allows users to perform
`the typical swiping they're going to do and have become accustomed to over
`the years, right?
`So yes, Gutman doesn't need to be swiped, but it can be swiped,
`
`right?
`
`right?
`
`So where does that leave us? You still have a problem with Gutman,
`
`The Gutman -- say Gutman is storing forward tracks. In that
`scenario, the only readers that will work in is readers need forward tracks,
`right?
`
`And if we look at, for example, slide 20 where I've placed testimony
`from both experts in this case, right?
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`Both acknowledge this is an issue, right? So Mr. Zatkovich on slide
`20, that's patent owner's expert, talking about what's disclosed in the '153
`patent.
`
`And he's asked, and the '153 patent describing sending data in a
`reverse direction when it's being swiped in reverse because it's possible that
`there's a reader that will respond better if the data is in reverse, right?
`Similarly, petitioner's expert, Mr. Halliday, is being asked about
`Gutman.
`And he says, so if the reader is expecting a swipe in the reverse and
`Gutman's device outputs in the forward direction as it normally does, that
`may cause a problem for the terminal.
`So the issue is, how do you cure, right, the problem that Gutman had
`with a unidirectional track, right?
`And that's the issue here. And Shoemaker gives us that solution
`years later.
`And a person of ordinary skill in the art wouldn't be modified to fix
`that by making use of the fact that Gutman's card likely will be swiped and
`can be swiped and including the swipe detectors that will orient the track in
`the right direction for the reader you happen to be using at the time.
`JUDGE BRADEN: So help me understand how that is not hindsight
`analysis based upon the challenged claims themselves.
`I see that Shoemaker says that you want to be able to swipe multi-
`directionally, that you've got -- depending on how you swipe, that could
`determine the magnetized order of the data pattern.
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`IPR2020 00499 Patent 8,827,153
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`But I'm not sure where that gets you with the unidirectional of
`Gutman or the non-swiping of Gutman, how somebody of skill in the art
`would know to put those together without already seeing the challenged
`claims or why somebody would say, I'm going to take Gutman which doesn't
`do this at all with Shoemaker to then choose a single one -- a single data
`process from the -- or single digital representation from a plurality of digital
`representations.
`How do we get there? And can you cite to evidence in the record
`that supports your position for that?
`MR. MARINA: Right. So the issue with hindsight, right, the typical
`hindsight scenario is where you're looking at the patent, right?
`And you're saying, well, this patent identifies a problem. And I'm
`going to go now retroactively fix a problem in Gutman that the patent
`identifies, right? And that's sort of looking backwards from the patent.
`But the patent -- the '153 patent is not the first to identify this
`problem, right?
`And the law tells us that motivation to combine can come from a
`secondary reference like Shoemaker or even the knowledge of one of
`ordinary skill.
`So if we look at what Shoemaker tells us, going back to that excerpt
`for slide 19, right?
`In some cases -- this Shoemaker talking to the world and telling a
`person of ordinary skill in the art that accurate reading of the data pattern
`requires a specific swipe direction, i.e., a specific order of the data, right?
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`So the issue is this is a problem being identified to a person of
`ordinary skill.
`And so when a person of ordinary skill who has knowledge of the
`prior art and is presumed to have knowledge of the prior art, 2011 is looking
`at Gutman, it will understand based on the teaching, not of the patent, not of
`the '153 patent, but of Shoemaker itself that Gutman will not work in certain
`readers.
`And it's a natural motivation to fix that problem, to make sure that
`that card can be used in all readers, not just the subset of readers that happen
`to be formatted to understand the particular orientation of the tracks in
`Gutman.
`So it's not a question, I believe, of hindsight because we're not
`relying on a teaching in the '153 patent.
`We're relying on a teaching in the prior art six years before the '153
`
`patent.
`
`JUDGE BRADEN: So counsel, so I agree with your analysis of the
`state of the law.
`But my question really goes to -- and you make this point that this
`problem is identified in Shoemaker.
`But doesn't Shoemaker also provide a solution for it? And if so, the
`solution being the dynamic reconfiguration of the data, why then would
`somebody of skill in the art go back to the teachings of Gutman?
`MR. MARINA: Well, the issue is Gutman -- if we're looking at
`Gutman, right, Gutman has -- operates differently from Shoemaker in the
`sense that Gutman is using an emulator, right?
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`IPR2020 00499 Patent 8,827,153
`IPR2020 00502 Patent 10,032,100
`IPR2020 00504 Patent 10,223,631
`IPR2020 00505 Patent 10,255,545
`Shoemaker is using what's called a programmable interface. So
`they're different devices.
`And Gutman does have a benefit in its ability to emulate and store
`multiple cards and multiple tracks.
`But the issue is if a person of ordinary in the art looking at Gutman,
`would they be motivated to improve Gutman, right?
`Gutman is a memory-based system that stores its data. It doesn't do
`it on the fly, right?
`And so if you're looking at Shoemaker, yes, Shoemaker does things
`on the fly and does things at transaction time.
`But that's the particular Shoemaker architecture. We're proposing
`not to bodily incorporate or retroactively fit Shoemaker into Gutman.
`What we're proposing is to cure a problem which is basically what
`the '153 patent does.
`It basically cures Gutman's problem as if it discovered the fact that
`there are issues with swipe direction.
`But it's just relying on Shoemaker already having discovered that,
`and it's sort of applying that to the Gutman architecture.
`There's nothing new, right, in the '153 patent. The storing of tracks,
`the waveforms, the magnetic emulation via magnetic fields, swipe direction-
`dependent tracks, all of that is known in the art, right?
`All they are doing is taking a memory-based device like Gutman and
`said, hey, you know what? There's going to be problem swiping. Why don't
`I just store two tracks?
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`But that problem -- they didn't come up with that solution.
`Shoemaker came up with the solution, realizing that to cure a problem with
`one track and one track only, you can reverse it based on a swipe direction.
`JUDGE BRADEN: So point out to us where Shoemaker does the
`storing of the two tracks and picking a single track from a plurality of stored
`tracks because the way I understood was that Shoemaker does the dynamic
`reconfiguration on the fly and that you were relying on Gutman for storing
`multiple tracks in memory. Did I misunderstand that?
`MR. MARINA: Right. So if we go back to the claim, the claim
`requires the storage, right, and memory of these representations, right?
`The teaching of storing representations in memory is Gutman, right?
`We're not relying on Shoemaker for storing representations. The
`teaching we're relying on in Gutman is that you can cure a swipe
`directionality problem by reversing the track.
`And when you're in the world of Gutman, Gutman is not an on the
`fly device. It's a storage device.
`And in fact, if we go to slide -- I'm trying to find my slide -- slide 17,
`Gutman talks about the memory on its card that it's a controller.
`And what it tells us is that memory can store multiple cards. It can
`store your American Express card, your Visa card, your MasterCard, your
`Discovery card, and can store three tracks per card.
`It's a huge memory on Gutman. Gutman is all in on storing its tracks
`beforehand and has no need to create them on the fly because the security
`concern that Shoemaker is concerned with is not what Gutman is concerned
`with.
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`Gutman cures insecurities just by requiring a password, and we cite
`that in our briefing.
`So the only teaching we're relying on from Shoemaker is to make
`available to your card forward or reverse, depending on the swipe situation
`you find yourself in at a transaction point.
`But the storage of the tracks is precisely what Gutman teaches.
`So if you're going to modify Gutman to have multiple tracks, you
`would store the tracks in the same way that Gutman stores all of its tracks.
`JUDGE BRADEN: Thank you, counselor.
`MR. MARINA: So with that, I'll move on to -- okay. I'll briefly
`move on to the Lessin ground. Sorry, I was getting a time check.
`So Lessin -- and I understand in the institution decision, there was a
`finding about the profiles in Shoemaker.
`But we have an alternative ground based on Lessin which is exactly
`the same as the Gutman ground.
`And if we look at slide 34, for example, Lessin teaches a card -- an
`emulator card just like Gutman does and will have the very same swipe
`detection problem.
`And here, there's no teaching away or teaching away that you
`wouldn't swipe it.
`It doesn't say anything about swiping. And in fact, you could look at
`Figure 22B, and you see that the card is in the slot.
`And so Lessin combines the same way with Shoemaker. There's an
`argument that -- I have to find it.
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`Turning to our slide 40, there's an argument that Lessin teaches away
`because its card can emulate without interacting with a payment terminal.
`Whether there are alternative embodiments of Lessin that teaches
`some other way of making a purchase, Lessin clearly discloses that its card
`can be used at a point of sale terminal, right?
`And so it will have -- unless it has the reverse forward or reverse
`track availability, it will have the problem that Shoemaker identifies and that
`Gutman has as well.
`And so the combination there is essentially -- is really the same
`reasoning for Gutman.
`And I'll end, I think. Well, on slide 41, and this is an argument that
`applies across the board.
`It's teaching the Shoemaker teaching away argument that was raised
`in the preliminary response, right?
`Just because Shoemaker prefers building a track at a transaction time
`because of some security concern as particular to Shoemaker, it never
`teaches away or disparages storing, right?
`And that's what the standard needs to be, not just it has a preferred
`embodiment of on the fly tracks. So with that, I'll wait for my rebuttal.
`Thank you.
`JUDGE BRADEN: Very good. And we understand that you still
`have 10 minutes of rebuttal time.
`And now we will turn argument over to patent owner's counsel.
`MR. MORRIS: Thank you. This is Robert Morris. One of the
`questions that you asked is, how do we get there?
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`And patent owner strenuously argues that we don't want to get there.
`In the background, the first five minutes or so of the discussion, I
`guess we would object to that discussion of that argument as all unsupported
`attorney argument, that there was no basis and any evidence that's of record
`as to whatever extent, however many card readers things may or may not
`work or what happens when you go to a store, there wasn't any surveys
`taken.
`
`Their expert didn't provide any evidence of doing even a single test
`of anything to find a card reader that worked or didn't work. And so we
`would lodge an objection with regard to that.
`If I would turn to -- ask you to please turn to their slide 17 where the
`title of it is that Gutman stores magnetic stripe tracks in memory.
`And we contend that this is simply not true. It stores information in
`memory, but it doesn't store tracks in memory.
`And this box that refers to three tracks, it isn't related to what's
`disclosed in the '153 patent.
`The '153 patent is talking about digital representation of the same
`
`track.
`
`The -- if you look at 510, 510 that petitioner has labeled as the three
`tracks, that's 510 or three -- they're just three conductors.
`And typically in a lot of the different pieces of prior art, you would
`have track 1 data, track 2 data, and track 3 data.
`And they would be lined up in the card because typically they're
`lined up in the reader at different heights.
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`And if you have a conventional credit card in your wallet, it could be
`up to three tracks, even though the third track is typically not used.
`But those are three completely different tracks. They have different
`ISO standard and formatting.
`And one of them has alphanumeric characters, for example. Two of
`them are just numeric characters.
`It's not the same track. It's not what the claims are talking about.
`In addition, if you look at Shoemaker, Shoemaker goes through -- I
`don't know where Shoemaker is. Here's Shoemaker.
`If we take a look at Shoemaker itself and we go to the figure he's
`talking about which is Figure 5, Figure 5 -- or I'm sorry, Gutman, Figure 5.
`Gutman, Figure 5 follows in the patent on the very next page of a
`flowchart.
`And the flowchart says how this works, how this embodiment works.
`And it starts at step 800 in Figure 8, then it goes to step 802. And if
`the user doesn't do any input, it quits.
`But if the user does an input, then we look at step 806. And it says it
`prepares the data.
`It doesn't say it just retrieves a track from memory. There's actually
`zero disclosure anywhere in Gutman that ever even a single time says it
`retrieves a track from memory. There's just nothing like that at all.
`The step that's disclosed is preparing the data. And then if you go to
`column 14, in column 14, it talks about preparing the data at step 806 or
`lines starting at about line 19, for providing the data signal to the driver
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`circuit to electrically drive the conductor 510 in accordance with the data
`corresponding to the service provider subscription ID.
`And the interesting thing here is that you go one step further and the
`very next line says, because Gutman is supposed to be this really cool device
`that can do lots of things.
`It's not just a payment card. It could be used for a wide variety of
`different applications that are described throughout the patent.
`But then it says, in the case when you're dealing with a financial
`transaction, the data prepared by the controller -- so once again, it's not just
`retrieving it from memory and outputting it.
`It's preparing it in this step 806. It said, it can include a transaction
`amount such as the -- however it was entered by the user.
`And so there's processing that goes on. In many ways, Gutman is
`just like Shoemaker where it's building the track on the fly.
`And it's not storing multiple tracks of the same multiple digital
`representations of a single track in any instance.
`Neither one of these references, neither Shoemaker nor Gutman in
`any way suggests storing in memory multiple digital representations of the
`same track. They just don't.
`JUDGE BRADEN: But counselor, I believe I understand petitioner's
`argument to be that electronic wallet 402 stores several different service
`provider information, subscription information in memory, and that is what
`allows a user to initiate the transaction with one of the selected providers and
`one of those subscription services.
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