Trials@uspto.gov
`571.272.7822
`
`
`
`
`Paper 33
`Entered: August 6, 2021
`
`
`
`
`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.
`____________
`
`IPR2020-00505
`Patent 10,255,545 B2
`____________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`JURGOVAN, Administrative Patent Judge.
`
`
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`
`
`
`571.272.7822
`
`
`
`
`Paper 33
`Entered: August 6, 2021
`
`
`
`
`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.
`____________
`
`IPR2020-00505
`Patent 10,255,545 B2
`____________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`JURGOVAN, Administrative Patent Judge.
`
`
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`
`INTRODUCTION
`I.
`Background and Summary
`A.
`On January 31, 2020, Petitioner, Samsung Electronics Co., Ltd.,
`Samsung Electronics America, Inc., and Samsung Research America, Inc.,
`filed a Petition requesting inter partes review of claims 1–16 of U.S. Patent
`No. 10,255,545 B2 (Ex. 1001, the “’545 Patent”). Paper 1 (“Petition” or
`“Pet.”). On May 15, 2020, Patent Owner, Dynamics Inc., filed a Preliminary
`Response to the Petition. Paper 8 (“Prelim. Resp.”). On June 2, 2020,
`Petitioner filed a Reply to address the Apple v. Fintiv1 factors under
`35 U.S.C. § 314(a). Paper 9. On June 9, 2020, Patent Owner filed a Sur-
`Reply to respond to Petitioner’s Reply. Paper 10.
`On August 12, 2020, applying the standard set forth in 35 U.S.C.
`§ 314(a), which requires demonstration of a reasonable likelihood that
`Petitioner would prevail with respect to at least one challenged claim, we
`instituted an inter partes review of claims 1–16 of the ’545 Patent.
`Paper 11.
`On November 4, 2020, Patent Owner filed its Response to the
`Petition. Paper 18 (“PO Resp.”). On January 27, 2021, Petitioner filed a
`Reply to Patent Owner’s Response, and on March 26, 2021, Patent Owner
`filed a Sur-Reply. Paper 21 (“Reply”); Paper 24 (“Sur-Reply”).
`An Oral Hearing took place on May 12, 2021. The Hearing
`Transcript is included in the record. Paper 31 (“Tr.”).
`After considering the parties’ arguments and supporting evidence, we
`determine that Petitioner has proved by a preponderance of the evidence that
`
`
`1 IPR2020-00019, Paper 11 (PTAB March 20, 2020) (precedential) (Order).
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`claims 1–16 are unpatentable. 35 U.S.C. § 316(e); 37 C.F.R. § 42.1(d)
`(2019).
`
`1:19-cv-6479
`
`7/12/2019
`
`Real Parties in Interest
`B.
`Petitioner identifies Samsung Electronics Co., Ltd., Samsung
`Electronics America, Inc., and Samsung Research America, Inc. as the real
`parties in interest. Pet. 76 (Petitioner’s Mandatory Notices).
`Patent Owner identifies itself as the real party in interest. Paper 6, 2
`(Patent Owner’s Mandatory Notices).
`Related Matters
`C.
`Patent Owner has asserted the ’545 Patent in the following cases:
`Case Name
`Case Number Court
`Case Filed
`In re Certain Mobile
`337-TA-1170
`U.S.
`7/12/2019
`Devices with
`International
`Multifunction
`Trade
`Emulators (“the ITC
`Commission
`litigation”)
`(ITC)
`Dynamics Inc. v.
`Southern
`Samsung Elecs. Co.,
`District of
`Ltd., et al.
`New York
`Samsung Elecs. Co.,
`IPR2020-00499 PTAB
`Ltd., et al. v.
`Dynamics Inc.
`Samsung Elecs. Co.,
`Ltd., et al. v.
`Dynamics Inc.
`Samsung Elecs. Co.,
`Ltd., et al. v.
`Dynamics Inc.
`Paper 6, 2–3 (Patent Owner’s Mandatory Notices).
`The ’545 Patent
`D.
`The ’545 Patent is titled “Cards and Devices with Multifunction
`Magnetic Emulators and Methods for Using the Same.” Ex. 1001,
`
`IPR2020-00502 PTAB
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`1/31/2020
`
`1/31/2020
`
`IPR2020-00504 PTAB
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`1/31/2020
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`3
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`code (54). A payment device of the ’545 patent generally includes
`(a) circuitry for communicating with a cellular network; (b) radio frequency
`identification (RFID) circuitry for electrically coupling and communicating
`with a payment terminal; (c) a coil for electrically coupling and
`communicating with the payment terminal; and (d) a processor for
`controlling operation of the coil. Id. at 14:46–59 (claim 1).
`The coil may be controlled by the processor to emit fields emulating
`the swiping of a magnetic stripe card through a reader. Id. at 5:45–61. The
`coil may also receive a signal to encode a static magnetic track. Id. at 7:23–
`31. Thus, the magnetic emulator may both transmit data to a magnetic stripe
`reader, and receive data from the magnetic stripe reader. Id. at 7:28–35.
`Figure 4 of the ’545 Patent is shown below.
`
`
`Figure 4 illustrates cards 400 and 450 of the ’545 patent. Id. at 3:17–18.
`Card 450 includes processor 453, switch circuitry 452 and emulator 451. Id.
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`at 7:36–39. Emulator 451 includes active region 454 to communicate with a
`magnetic stripe reader or encoder. Id. Processor 453 may drive
`emulator 451 via switching circuitry 452 including one or more transistors,
`causing the emulator to transmit an electromagnetic signal to the magnetic
`stripe reader. Id. at 7:47–52.
`Figure 7 of the ’454 Patent is shown below.
`
`
`Figure 7 illustrates electrical coupling between a card and reader. Id.
`at 3:24–26. Card 720 includes emulator 721 that provides electromagnetic
`field 791 that may transmit through a portion of the housing of magnetic
`stripe reader 710. Id. at 8:29–32. Accordingly, card 720 may be located
`outside of reader 710 and yet communicate information to reader 710. Id.
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`at 8:33–39. The emulator may be located at a surface of a card or beneath a
`surface of a device. Id. at 9:21–24.
`Figure 2 of the ’545 Patent is shown below.
`
`
`Figure 2 illustrates cards 200 and 250. Id. at 3:13–14. Card 200 includes
`static magnetic track 201, magnetic emulator 202, and static magnetic
`track 203 sandwiched between read-head detectors 204 and 205. Id.
`at 5:45–48. Processor 220 receives information from read-head
`detectors 204 and 205, and controls current flow through a coil of
`emulator 202 to generate electromagnetic fields sensed by a magnetic stripe
`reader. Id. at 5:51–61.
`
`Figure 2 also shows a RFID antenna 210 on card 200. Id. at 5:62.
`Processor 220 may use RFID antenna 210 to transmit information to an
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`RFID device, or may use magnetic emulator 204 to communicate
`information to a magnetic stripe reader. Id. at 5:62–67. Both RFID
`antenna 210 and magnetic emulator 204 may be used to communicate
`payment card information (e.g., credit card information) to a reader. Id.
`at 5:67–6:3.
`Processor 220 may also be coupled to display 240 to display dynamic
`information. Id. at 6:3–5. The dynamic information may include a credit
`card number, debit card number, payment card number and/or payment
`verification code. Id. at 2:62–65. Button array 230 may be coupled to
`processor 220 so that operation of card 200 may be controlled, at least in
`part, by manual input received by button array 230. Id. at 6:5–8.
`
`Other embodiments of the device include a personal electronic device,
`which may be a portable telephonic device, portable media player, or other
`type of electronic device. Id. at 12:32–34, Fig. 12. The device may include
`a touch-sensitive display. Id. at 12:40–42. The device may communicate
`with a cellular network. Id. at 14:46–48; 15:10. The device may be thicker
`than a card. Id. at 2:44–48.
`
`Challenged Claims
`E.
`Claims 1 and 9 of the ’545 Patent are independent. Claims 2–8
`depend directly from claim 1, and claims 10–16 depend directly from
`claim 9. Claim 1 is set forth below with annotated numbering of steps (the
`annotation does not affect our analysis):
`1. [preamble] A device comprising:
`[1a] circuitry operable to communicate with a cellular network;
`[1b] RFID circuitry operable to electrically couple the device to a
`payment terminal and to communicate RFID data to the payment
`terminal;
`[1c] a coil; and
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`
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`Ex. 1001, 14:46–59.
`
`[1d] a processor for controlling the operation of the coil such that the
`coil is operable to electrically couple the device to the payment
`terminal and to communicate data in magnetic stripe data format to
`the payment terminal,
`[1e] wherein the coil is operable to electrically couple the device to
`the payment terminal from a position beneath a surface of the device.
`
`
`
`Evidence of Record
`F.
`Petitioner relies upon the following prior art references2:
`Doughty US 2006/0161789 A1
`Published July 20, 2006 Ex. 1012
`Zellner
`US 7,097,108 B1
`Issued August 29, 2006 Ex. 1008
`Moullette US 7,114,652 B1
`Issued October 3, 2006 Ex. 1007
`Pitroda
`US 6,769,607 B1
`Issued August 3, 2004
`Ex. 1015
`Petitioner also supports its challenges with a declaration from Stephen
`G. Halliday (Ex. 1002). Pet. 9. Patent Owner relies on a declaration of Ivan
`Zatkovich (Ex. 2042) to support its contentions. PO Resp. (viii). Both
`declarants were deposed. Ex. 1032 (Zatkovich Deposition); Ex. 2039,
`Ex. 2040 (Halliday Depositions). In addition, Patent Owner relies on a
`deposition of Stuart Lipoff from the ITC litigation. Ex. 2041. The parties
`submitted numerous other documents into the record.
`The Asserted Challenges to Patentability
`G.
`Petitioner asserts the following challenges to patentability:
`
`2 Petitioner alleges that all of the prior art references were filed, issued or
`published before the ’545 Patent’s earliest alleged priority date of
`December 24, 2007. Pet. 4, 8. Petitioner contends that all of these prior art
`references are prior art under 35 U.S.C. §§ 102(a), (b), and (e) (pre-Leahy-
`Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011)
`(“AIA”)). Id. at 8. Patent Owner does not refute these assertions.
`Accordingly, we will treat these references as prior art in this decision.
`
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`
`Challenged Claims
`1–16
`1–16
`1–16
`
`35 U.S.C. §
`103(a)3
`103(a)
`103(a)
`
`Reference(s)/Basis
`Doughty, Zellner
`Zellner, Moullette
`Pitroda
`
`Prior Art Summaries
`H.
`Doughty (Ex. 1012)
`1.
`Doughty is titled “System, Method and Apparatus for Enabling
`Transactions Using a User Enabled Programmable Magnetic Stripe.”
`Ex. 1012, code (54). Doughty’s Figure 3 is shown below.
`
`
`
`
`3 Because the claims at issue have an effective filing date prior to the
`effective date of the AIA’s amendments to 35 U.S.C. §§ 102 and 103
`(March 16, 2013), we apply the pre-AIA versions of §§ 102 and 103 in this
`Decision.
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`In Figure 3, Doughty depicts a system 300 with user device 302 and system
`interface 304 used for security and/or commercial transactions. Id. ¶¶ 8, 41.
`User device 302 includes memory 312, processor 314, magnetic field
`generator 306, user interface 320, contactless interface 322, smart card
`interface 324, and optical or other I/O interface 326. Id. Magnetic field
`generator 306 is coupled to device processor 314 and emulates a
`programmable magnetic stripe using inductive coils. Id. ¶¶ 10, 43. The
`contactless interface 322 is coupled to the device processor 314 and includes
`an antenna for wireless communication. Id. ¶ 47. Smartcard interface 324 is
`coupled to device processor 314. Id. The components of user device 302
`are disposed within or mounted on a substrate, and may be integrated into a
`personal communication device such as a telecommunications device. Id.
`¶¶ 47–48. The interfaces of user device 302 communicate with respective
`magnetic reader 330, wireless transceiver 332, smart card reader 334, and
`I/O interface 336 of system interface 304. Id. ¶ 49.
`Zellner (Ex. 1008)
`2.
`Zellner is titled “Multiple Function Electronic Cards.” Ex. 1008,
`code (54). Zellner’s electronic card includes first and second opposing
`faces, and is similar in dimensions to a standard credit card. Id. at code (57).
`A flat panel display extends over the first face of the card, and a dynamic
`magnetic encoder is provided on the second face of the card. Id. The
`dynamic magnetic encoder provides magnetic stripe information for a
`selected credit card. Id.
`Zellner’s Figure 6 is shown below.
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`Zellner’s Figure 6 shows an electronic card including display(s) 110/160,
`dynamic magnetic encoder (DME) 120, input device 130, and processor 150.
`Id. at 7:42–46. The electronic card further includes short range wireless
`transceiver 610 for Bluetooth, WiFi or other communications. Id. at 7:46–
`50. The electronic card also includes Radio Frequency ID (RFID)
`receiver 620, RFID transmitter 630, and cellular transceiver 640. Id.
`at 7:50–53. Zellner further discloses a PDA, cell phone or other portable
`electronic device, which “may be combined with any or all of the
`embodiments” described earlier in the reference. Id. at 11:6–8.
`3. Moullette (Ex. 1007)
`Moullette is titled “External Adaptor for Magnetic Stripe Card
`Reader.” Ex. 1007, code (54). Moullette purports to address a need in the
`art for a portable personal device to interact with older legacy POS card
`acceptance systems. Id. at 2:38–47, 2:51–55. Consumer pod portion 16 of
`Moullette’s adaptor 14 includes a radio frequency proximity transceiver
`conforming to ISO 14443 and ISO 15963 standards, and a wireless
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`transceiver configured for wireless or cellular protocols such as CDMA,
`CDPD, GPRS, GSM, SMS and others. Id. at 4:8–10, 4:41–60, Fig. 1.
`Moullette’s Figure 1 is shown below.
`
`
`Figure 1 shows conventional POS magnetic stripe card reader 2 with
`magneto-inductive reader heads 10, and adaptor 14 with consumer pod
`portion 16 communicating with merchant pod portion 18 through cable 20.
`Id. at 4:1–10. Consumer pod portion 16 is positioned at a location
`convenient for a customer, who may interact with adaptor 14 using personal
`trusted device (PTD) 99 (shown as a wireless telephone in Figure 1) by
`bringing PTD 99 in proximity to wireless transceiver 22 of adaptor 14. Id.
`at 4:10–15, 4:46–49. Merchant pod portion 18 is affixed beneath the
`external housing of reader device 2 and communicates with its reader
`heads 10a, 10b. Id. at 5:21–31.
`
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`
`Pitroda (Ex. 1015)
`4.
`Pitroda is titled “Point of Sale and Display Adapter for Electronic
`
`Transaction Device.” Ex. 1015, code (54). Pitroda discloses “[a]n adapter
`for use with a conventional POS card reader to interface with PDA’s,
`Wireless Phones, and other Handheld devices, through Infrared or RF media,
`such that signals received from the devices can be converted to conventional
`magnetic stripe and/or smart card format, as required by the conventional
`POS card readers.” Id. at code (57). In one embodiment, Pitroda describes
`that the adapter is an “extension” of the electronic transaction device, which
`may be a PDA or wireless telephone. Id. at 2:3–6, 11:11–14. Pitroda
`describes the wireless telephones as including dialing, transmitting and
`receiving circuitry. Id. at 1:27–28. Pitroda further describes that its device
`has proximity radio frequency devices. Id. at 11:14–28. Pitroda’s adaptor
`may include a point-of-sale (POS) interface including a magnetic stripe
`emulator, smart card emulator or both. Id. at 3:57–66. Pitroda’s magnetic
`stripe emulator may include an electromagnet with one or more coils. Id.
`at 3:66–67, 8:16–17, Figs. 12, 14.
`
`Pitroda’s Figure 20 is reproduced below.
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`
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`Figure 20 is an illustration of an example of Pitroda’s electronic transaction
`device 60 with extension 62. Id. at 5:35–36, 11:11–14.
`
`Pitroda’s Figure 21 is reproduced below.
`
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`Figure 21 is a block diagram of electronic transaction device 60, which
`includes extension 62. Id. at 5:37–38. Electronic transaction device 60
`comprises microprocessor 64 coupled to memory 66, I/O interfaces 68,
`display 70, which may be a touch sensitive liquid crystal display, and
`battery 72. Id. at 11:11–21. The extension 62 includes POS interface 20.
`Id. at 11:11–14. Microprocessor 64 controls data flow to POS interface 20.
`Id. at 11:29–31.
`
`II. ANALYSIS
`Legal Standards for Obviousness
`A.
`A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
`differences between the claimed subject matter and the prior art are such 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 ordinary skill in the art; and (4) where present, objective
`evidence of nonobviousness. Graham v. John Deere Co., 383 U.S. 1, 17–18
`(1966).
`Obviousness based on a combination of references requires a showing
`that all claim limitations are taught or suggested by the combined references.
`Praxair Distrib., Inc. v. Mallinckrodt Hosp. Prods. IP Ltd., 890 F.3d 1024,
`1041 (Fed. Cir. 2018) (Newman, J., concurring in the judgment) (citing In re
`Royka, 490 F.2d 981 (CCPA 1974)). A person of ordinary skill in the art
`must have had an apparent reason to combine the references. KSR, 550 U.S.
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`at 418. A conclusion of obviousness further requires a reasonable
`expectation of success in combining references to meet the limitation of the
`claimed invention. Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd.,
`821 F.3d 1359, 1367 (Fed. Cir. 2016).
`
`Burden of Proof
`B.
`Petitioner has the burden of proving unpatentability by a
`preponderance of the evidence. 35 U.S.C. § 316(e) (2018). Petitioner
`carries the burden from the onset of the proceeding, and the burden never
`shifts to Patent Owner. Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356,
`1363 (Fed. Cir. 2016); Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
`800 F.3d 1375, 1378 (Fed. Cir. 2015). Petitioner must “show with
`particularity why the patent it challenges is unpatentable.” See Harmonic,
`supra.
`Petitioner cannot satisfy its burden of proving obviousness with “mere
`conclusory statements.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364,
`1380 (Fed. Cir. 2016). Instead, “there must be some articulated reasoning
`with some rational underpinning to support the legal conclusion of
`obviousness.” KSR, 550 U.S. at (quoting In re Kahn, 441 F.3d 977, 988
`(Fed. Cir. 2006)).
`
`Level of Ordinary Skill in the Art
`C.
`Petitioner contends that a person of ordinary skill in the art
`(“POSITA”) on December 24, 2007, which is the earliest alleged priority
`date of the ’545 Patent, “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
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`or otherwise convey information.” Pet. 14; Ex. 1002 ¶ 33. Petitioner also
`contends “[a]dditional education might supplement practical experience and
`vice-versa.” Pet. 14.
`In the ITC litigation, Patent Owner contends Petitioner proposed the
`same definition as here, and that Petitioner proposed that a person of
`ordinary skill in the art (“PHOSITA”) would have “at least two years of
`experience with point of sale systems and financial transactions.” PO Resp.
`30; Ex. 2012, 6–7. Patent Owner indicates that “the ALJ in the ITC
`litigation decided that a PHOSITA had [an] ‘undergraduate degree in
`computer science, electrical engineering, or the equivalent (including
`computer engineering) and at least three years of experience with point of
`sale systems and the use of magnetic fields to convey information.’” PO
`Resp. 30–31; Ex. 2012, 6–7 (ITC Claim Construction). Patent Owner
`contends that claims 1–16 of the ’545 Patent are valid and non-obvious
`regardless of which definition applies. PO Resp. 31.
`To establish the level of ordinary skill in the art, we look to various
`factors including “the types of problems encountered in the art; prior art
`solutions to those problems; rapidity with which innovations are made;
`sophistication of the technology; and education level of active workers in the
`field.” In re GPAC, 57 F.3d 1573, 1579 (Fed. Cir. 1995) (citing Custom
`Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 962 (Fed. Cir.
`1986)). Problems encountered in the art are identified in the background
`sections of Doughty, Zellner, Moullette, and Pitroda. See Ex. 1012 ¶ 7;
`Ex. 1008, 1:13–42; Ex. 1007, 2:38–47; Ex. 1015, 3:22–48. Solutions
`proposed for these problems are also disclosed in these references. See
`Ex. 1012 ¶ 8; Ex. 1008, 1:44–3:45; Ex. 1007, 2:49–3:30; Ex. 1015, 3:22–48.
`
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`
`Considering these factors, for purposes of this decision, we determine
`that a person of ordinary skill in the art at the time of the invention would
`have had a bachelor’s degree in computer science, electrical engineering,
`computer engineering, or equivalent, and three years of experience working
`with payment device technologies including magnetic stripe cards and
`emulators, card readers, RFID, and cellular network communications for
`payment transactions. While this definition is in some respects more
`specific than the other proposed definitions, we think it is better tailored to
`cover the types of technologies recited in the claims. Specifically, the other
`proposed definitions do not cover cellular networks, while our definition
`does. Apart from this, we do not consider our definition to be materially
`different from what the ITC adopted or parties propose here. And neither
`party contends that the outcome of this case turns on the definition of the
`level of ordinary skill in the art. See generally Pet. and PO Resp.
`Accordingly, we apply this level of ordinary skill in the art in our
`obviousness analysis.
`
`D. Claim Construction
`We construe the challenged claims under the same standard used by a
`federal court in a civil action under 35 U.S.C. § 282(b). 37 C.F.R.
`§ 42.100(b) (2019). This standard is articulated in Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) and its progeny. This standard
`includes “construing the claim in accordance with the ordinary and
`customary meaning of such claim as understood by one of ordinary skill in
`the art and the prosecution history pertaining to the patent.” 37 C.F.R.
`§ 42.100(b) (2019). Only claim terms in controversy need to be construed,
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`and only to the extent necessary to resolve the controversy. See Vivid
`Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999).
`“Petitioner does not believe any terms need to be construed to resolve
`the issues presented in this Petition.” Pet. 15–16. Patent Owner indicates
`certain terms were construed by the ALJ in the ITC litigation in a claim
`construction order dated January 31, 2020, and states “[a]ll of the claims of
`the ’545 patent are patentable under these constructions.” PO Resp. 31–32;
`Ex. 2012, 34–36.
`Neither Petitioner nor Patent Owner offer any claim construction in
`this proceeding. Consequently, there is no dispute regarding the claim
`language that we need to resolve, and we proceed by applying the ordinary
`and customary meaning of the claim terms consistent with their use in the
`specification and prosecution history.
`Our use of the ordinary and customary meaning of the claim terms is
`consistent with the ITC’s claim construction. The actual claim language of
`the ’545 Patent and the corresponding ITC constructions from Exhibit 2012
`are shown in the table below.
`
`’545 Patent’s Claim Language
`“operable to electrically couple [the
`device] to a payment terminal and to
`communicate [data in magnetic stripe
`data format/magnetic stripe data] to the
`payment terminal”
`(claims 1 and 9)
`“within proximity of” (claims 8
`and 16)
`
`“virtual payment card”
`(claims 5 and 13)
`
`ITC Construction
`“operable to electrically couple [the
`device] to a payment terminal and to
`communicate [data in magnetic stripe
`data format/magnetic stripe data] to the
`payment terminal.”
`
`“within proximity of”
`
`
`“a visual representation of a payment
`card”
`
`19
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`
`Ex. 2012, 34–36.
`The ITC’s constructions for the first two limitations mirror the actual
`claim language. In other words, the ITC uses the plain and ordinary
`meaning of these claim limitations. Id. For the third limitation, the ITC
`agreed with Patent Owner that the construction for a “virtual payment card”
`is “a visual representation of a payment card.” Id. at 36. In determining this
`construction, the ITC found that Figure 12 of the ’631 Patent and its
`corresponding description, which is identical to Figure 12 of the ’545 Patent
`and its description, included features common to actual credit cards such as
`card number, name, and security (CVCC) code, but did not include other
`features actual credit cards would have, such as a logo, expiration date,
`issuer, magnetic stripe, and computer chip. Id. at 33–34. The ITC held that
`the payment card of Figure 12 only resembles an actual credit card, and thus
`chose Patent Owner’s construction that a “virtual payment card” is “a visual
`representation of a payment card” over Petitioner’s construction of “an
`image of a payment card.” Id.
`We agree with the ITC that the ordinary and customary meaning of
`“virtual payment card,” when considered in light of the ’545 Patent,
`specifically, Figure 12 and the corresponding description, is “a visual
`representation of a payment card.” This definition is consistent with
`Figure 12 of the ’545 Patent and its corresponding description, which is the
`only place in the specification where a similar term, “virtual card,” is
`mentioned. Ex. 1001, 12:32–46, Fig. 12.
`We proceed to analyze the challenges, applying the ordinary and
`customary meaning of the claim terms.
`
`20
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`
`E.
`
`Asserted Obviousness of Claims 1–16 over the Combination of
`Doughty and Zellner
`Petitioner contends claims 1–16 would have been obvious over the
`combination of Doughty and Zellner. Pet. 16–39. Patent Owner argues
`claims 1–16 would not have been obvious. PO Resp. 32–50.
`Claim 1
`1.
`a) Rationale to Combine Doughty and Zellner with Reasonable
`Expectation of Success and Related Matters
`Petitioner contends that a “POSITA would have been motivated to
`modify Doughty in view of Zellner in order to improve Doughty’s
`functionality and flexibility.” Pet. 16 (citing Ex. 1002 ¶¶ 65–70). Petitioner
`further contends “[b]oth Doughty and Zellner recognize the need for
`electronic devices that can process financial and other transactions, and are
`directed to devices that emulate the varying magnetic fields generated by
`traditional magnetic stripe payment cards.” Id. (citing Ex. 1012, code (57),
`¶¶ 2, 9; Ex. 1008 1:6–9, 5:34–39).
`Specifically, Petitioner states that Doughty has a “magnetic field
`generator” that “emulates a programmable magnetic stripe” (Ex. 1012 ¶ 10);
`that Doughty’s device may be “a personal communication device, such as a
`personal data assistant (PDA), a telecommunications device, a pager, . . .
`etc.” (Ex. 1012 ¶ 48); and that Doughty’s device includes multiple other
`components, such as “radio frequency (‘RF’) antenna,” “a controller,” and
`“a dynamic information display” (Ex. 1012 ¶ 62). Pet. 16–17.
`Petitioner states that “Zellner describes an electronic device that can
`‘emulate the magnetic stripe information that would be provided by the
`credit card.’” Pet. 17 (citing Ex. 1008, 1:60–64). Petitioner contends that
`Zellner describes a “portable package,” such as “a PDA, cell phone or other
`
`21
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`portable electronic device,” that “may be configured to display . . . a full size
`image of a credit card” and can “interface with credit card readers.” Id.
`(citing Ex. 1008, 10:63–11:13) (alteration in original). Petitioner also
`contends that Zellner discloses that the device has a display, processor, a
`dynamic magnetic encoder (DME) 120, and RF subsystem 920 including
`short range RF system 610, an RFID receiver 620, and RFID
`transmitter 630, a cellular system 640 and/or a position (GPS) system 660,
`which can be controlled by processor 150. Id. (citing Ex. 1008, 7:42–58,
`9:38–51, 11:50–55). Petitioner further contends that Zellner’s device is
`“compatible with existing card readers” and those having “a radio frequency
`interface.” Pet. 17 (citing Ex. 1008, 11:50–55).
`Petitioner contends that the similarities in design and purpose of
`Doughty and Zellner would have led a person of ordinary skill in the art to
`modify Doughty with Zellner’s teachings to improve Doughty’s
`functionality and flexibility. Pet. 16–19. Specifically, Petitioner contends
`that a POSITA would have been motivated to modify Doughty’s
`telecommunication device with Zellner’s cellular transceiver and would
`have had a reasonable expectation of success in doing so. Id. at 17–18;
`Ex. 1008, 7:42–58; Ex. 1012 ¶ 48; Ex. 1002 ¶ 68. Petitioner further
`contends that a person of ordinary skill in the art would have had reason to
`modify Doughty’s RF capabilities to include Zellner’s RFID functionality
`with a reasonable expectation of success. Pet. 18–19; Ex. 1012 ¶¶ 62, 63,
`65; Ex. 1008, 7:42–58, 9:47–50; Ex. 1002 ¶¶ 69, 70.
`Patent Owner contends that “Doughty never teaches how this
`substrate may be integrated into such devices, and Petitioner fails to explain
`how a PHOSITA would modify Doughty or Zellner in any meaningful way
`
`22
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`as to have been obvious to a PHOSITA.” PO Resp. 33–34 (alterations in
`original); Sur-Reply 1–2, 4. In other words, Patent Owner argues (1) that
`the Doughty patent is not enabled because it does not teach how to integrate
`the substrate into a PDA or other telecommunications device; and (2) that
`there was a lack of motivation to modify Doughty with Zellner to include all
`components into a PDA or other telecommunications device. PO Resp. 33–
`34.
`
`Petitioner replies that prior art publications and patents are presumed
`to be enabled. Reply 3–4 (citing Sandoz Inc. v. Pharmacyclics LLC,
`IPR2019–00865, Paper 29 at 13 (PTAB Sept. 24, 2020); Microsoft Corp. v.
`Parallel Networks Licensing, LLC, 715 F. App’x 1013, 1021 (Fed. Cir.
`2017)). Petitioner argues that “Doughty and Zellner provide at least as much
`implementation detail as the ’545 Patent, which only says its Figure 12 “may
`be, for example, a portable telephonic device, portable media player, or any
`type of electronic device.” Id. at 4. Petitioner contends that the ’545 Patent
`“does not provide implementation details because a POSITA ‘will appreciate
`that the functionality of a card may be provided on a personal device,’ such
`as a ‘portable telephonic device.’” Id. (citing Ex 1001, 12:32–37).
`Petitioner argues that Patent Owner “fails to show why the Board should
`treat enablement differently between the cited prior art and the ’545 patent
`given their similar level of detail.” Id. (citing In re ThermoLife Int’l LLC,
`796 F. App’x 726, 733 (Fed. Cir. 2020), cert. den’d sub nom, ThermoLife
`Int’l LLC v. Iancu, 141 S. Ct. 1049 (Jan. 11, 2021)).
`Beyond its general allegations of lack of enablement and motivation
`to combine, Patent Owner does not identify specifically what is missing
`from Doughty such that it fails to provide an enabling disclosure, nor does
`
`23
`
`
`
`IPR2020-00505
`Patent 10,255,545 B2
`
`Patent Owner explain what deficiency exists in Petitioner’s stated reasons to
`combine Doughty and Zellner. See PO Resp. 33–34.
`“Even if a reference discloses an inoperative device, it is prior art for
`all that it teaches.” Beckman Instruments, Inc. v. LKB Produkter AB, 892
`F.2d 1547, 1551 (Fed. Cir. 1989). Therefore, “a non-enabling reference may
`qualify as prior art for the purpose of determining obviousness under 35
`U.S.C. § 103.” Symbol Techs. Inc. v. Opticon Inc., 935 F.2d 156
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