MobilePay LLC

Patent Trials and Appeals Board

Jul 29, 2020

IPR2019-00466 (P.T.A.B. Jul. 29, 2020)

Trials@uspto.gov Paper 36
571-272-7822 Date: July 29, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

UNIFIED PATENTS LLC,
Petitioner,
v.
MOBILEPAY LLC,
Patent Owner.
____________

IPR2019-00466
Patent 9,800,706 B2
____________

Before THU A. DANG, JENNIFER S. BISK, and NEIL T. POWELL,
Administrative Patent Judges.

DANG, Administrative Patent Judge.

JUDGMENT
Final Written Decision
Determining All Challenged Claims Unpatentable
Denying Patent Owner’s Motion to Exclude (Paper 25)
35 U.S.C. § 318(a)

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I. INTRODUCTION
A. Background
In response to a Petition (Paper 2, “Pet.”) filed by Unified Patents
LLC (“Petitioner”), we instituted inter partes review of claims 1–4 (“the
challenged claims”) of U.S. Patent No. 9,800,706 B2 (Ex. 1001, “the ’706
patent”). Paper 10. During trial, MobilePay LLC (“Patent Owner”) filed a
Response. Paper 16 (“PO. Resp.”), to which Petitioner filed a Reply (Paper
20, “Pet. Reply”). In turn, Patent Owner filed a Sur-reply. Paper 23 (“PO
Sur-reply”). Patent Owner then filed a Motion to Exclude New Arguments
(Paper 25, “PO Exclude Mot.”), and in response, Petitioner filed an
Opposition to the Motion to Exclude (Paper 27, “Pet. Mot. Opp.”).1 An
oral hearing was held with the parties on May 4, 2020. A transcript of the
hearing has been entered into the record. Paper 35 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6. This Decision is a Final
Written Decision under 35 U.S.C. § 318(a) as to the patentability of claims
1–4 on which we instituted trial. Based on the record before us, Petitioner
has shown, by a preponderance of the evidence, that claims 1–4 of the ’706
patent are unpatentable.

1 In an April 29, 2020, call with the parties, we informed the parties that we
would not issue an Order addressing the Motion to Exclude prior to oral
hearing, we would not entertain arguments on this issue during oral hearing,
and we would address the issue thereafter. Accordingly, we will address
the Motion to Exclude in this Final Written Decision. See Section II(A)
below.
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B. Related Matters
According to Petitioner, the ’706 patent is the subject of MobilePay LLC
v. Bank of America Merchant Services, LLC, No. 6:18- cv-00321 (W.D. Tex.);
MobilePay LLC v. Intuit Inc., No. 2:18-cv-00414 (E.D. Tex.); MobilePay LLC
v. Bank of America, N.A., No. 2:18-cv-00413 (E.D. Tex.); MobilePay LLC v.
Mindbody, Inc., No. 6:18-cv-00286 (W.D. Tex.); and MobilePay LLC v.
PayPal, Inc., No. 6:18-cv-00287 (W.D. Tex.). Pet. 1–2; Paper 4, 2.
C. The ’706 Patent (Ex. 1001)
The ’706 patent issued on October 24, 2017, from an application filed
March 8, 2010. Ex. 1001, codes (45), (22). The ’706 patent claims priority to
US Provisional Patent Application No. 61/158,586 (“the Provisional
Application”) filed on March 9, 2009. Id. at code (60).
The ’706 patent relates to a system for “coupling a peripheral to a device
such as a smart phone.” Id., Abstract. Smartphone type devices communicate
to the Internet using the TCP/IP protocol, while hardware transmission
standards that support this include “Wi-Fi (802.11); cellular wireless
networking such as CDMA, UMTS, HSDPA, GPRS and EDGE; and wide-area
networking such as WiMAX (IEEE 802.16).” Id. at 1:63–2:3. The ’706 patent
states, “[h]owever, device-to-device and device-to-peripheral communication
is awkward with these standards.” Id. at 2:3–8. “To have two devices
communicate in this manner, they must either communicate through an
intermediary server or website,” thus, “adding delay and complexity of set up.”
Id.
According to the ’706 patent, “[t]he teachings provided herein could be
used in a variety of ways.” Id. at 11:59–60. For example:
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A ‘cloud service’ could decode the signals. That is, the phone
could be relatively “dumb,” and a device could be used to
communicate to the ‘cloud’ through a mobile phone. A
software vendor could implement a solution, whereby users
transmit data from an accessory, through the audio input of
their phone. The data would then be uploaded without
significant change to a server, where it would be decoded.
Id. at 12:15–22.
D. The Provisional Application (Ex. 1004)
The Provisional Application relates to an apparatus “for connecting
peripherals to devices and for enabling unidirectional and bi-directional
communication between portable devices.” Ex. 1004, Abstract. Similar to the
’706 patent, the Provisional Application also discloses devices communicating
to the Internet using the TCP/IP protocol while hardware transmission
standards that support this include CDMA, HSDPA, GPRS, and the like.
Compare Ex. 1001, 1:63–2:3, with Ex. 1004 ¶ 6. Like the ’706 patent, the
Provisional Application indicates that device-to-device and device-to-
peripheral communication is “awkward” with these standards. Ex.1004 ¶ 6.
Accordingly, the Provisional Application attempts to overcome the
shortcomings of the prior art by providing unidirectional and bi-directional
communication between mobile devices that can be implemented by any
mobile application developer. Id. ¶¶ 15–16.
The Provisional Application indicates that the invention applies to any
device with audio input capability, for example, smart phones such as the
Apple iPhone™ (id. ¶ 98), wherein smart phones incorporate “general purpose
computing technology” coupled with an “always-on” Internet connection. Id.
¶ 3.
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One embodiment of the Provisional Application relates to a mobile
device that receives textual or binary data “by decoding modulated information
from ambient audio in the environment.” Id. ¶ 37. For example, “at a club,
concert, speech, or presentation, a subtitle track corresponding to the presented
media could be embedded in the audio,” and the mobile device running the
appropriate application “would listen to and decode the modulated data
embedded in the ambient audio.” Id.
Another embodiment of the Provisional Application relates to multiple
mobile devices that receive textual or binary data “by decoding modulated
information from ambient audio in the environment containing URLs, codes,
digital signatures, encryption payloads, or time-based or location-based
information.” Id. ¶ 38. The devices acquire the information by listening for
“packets” of data in which the devices are interested. Id. The packets of data
can, for example, include URLs, and the URLs can be used to automatically
register the device for a mailing list or automatically access a website to
download credentials or licenses. Id.
Another embodiment of the Provisional Application relates to a system
of two devices to be used in a “museum environment.” Id. ¶ 39. The two
devices communicate with each other via audio transmitted from one of the
devices and received by the other device. Id. The transmitting device conveys
a URL corresponding to content for a presentation in the museum, and the
receiving device accesses the presentation via the Internet at the URL. Id.
Another embodiment of the Provisional Application relates to a system
of two devices that directly communicate with each other. Id. ¶ 41. The two
devices communicate “by positioning the speaker of a first said device near the
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microphone of a second said device to exchange small notes or a larger data
transaction to take place,” which is then “consummated on another high-
bandwidth link such as 3G, WiFi, WiMax or others.” Id. The data transaction
takes place by transmission of a URL from the first device to the second by
audio communication, and subsequently, the second device accesses the data
from an Internet-based server. Id.
For example, when the operator of a first device wishes to select a group
of photographs to beam to a newly encountered user of a second device, the
first device uploads the photographs to an Internet-based server and then sends
sounds to the second device to inform the second device of the URL to retrieve
the photos. Id.
E. Illustrative Claim
Of the challenged claims, claim 1 is independent. Claims 2–4 depend
from claim 1. Claim 1 is illustrative:
1. A system for coupling a credit card reader to a mobile
device, the system comprising:
a hardware component that connects to the mobile device
and the credit card reader, the hardware component including:
a first mechanism configured to receive data provided
by the credit card reader;
a communication controller for buffering the data
received from the credit card reader prior to conversion by a
first circuit;
the first circuit configured to convert the data to an
analog audio signal;
a connector to couple the hardware component to an
audio input port of the mobile device, wherein: the connector
bridges a microphone pin of the audio input port such that
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the mobile device detects a presence of the connector in the
audio input port; and
the connector provides an audio communication
between the hardware component and the mobile device and
communicates the analog audio signal from the hardware
component to the mobile device;
a second mechanism on the mobile device configured to
receive the analog audio signal and convert the analog audio signal
into binary data; and
a third mechanism on the mobile device configured to upload
the binary data to a cloud service for decoding.
Ex. 1001, 12:42–13:2.
F. Evidence of Record
Petitioner relies upon the references listed below (Pet. 23–70).
Reference Exhibit
Tang et al.
(“Tang”)
WO 2010/097711 A2, published September
2, 2010 1005
Kinzalow et al.
(“Kinzalow”)
US Patent No. 6,052,603, issued April 18,
2000 1006
Inoue US Patent No. 7,058,842 B2, issued June 6, 2006 1007
Cheon et al.
(“Cheon”)
US 8,265,553 B2, issued September 11,
2012 1008

Petitioner also relies on the Declarations of Peter Alexander, Ph.D.
Exs. 1002, 1012. Dr. Alexander was cross-examined by Patent Owner, and
a transcript of his deposition was entered into record. Ex. 2008. Patent
Owner relies on the Declarations of Dean Sirovica, Ph.D. Exs. 2001, 2007.
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G. Asserted Grounds of Unpatentability
We instituted inter partes review on all grounds in the Petition on all
challenged claims. Petitioner asserts the following grounds of unpatentability
(Pet. 5):
Claims Basis References
1, 4 § 1032 Tang, Kinzalow, Inoue
2, 33 § 103 Tang, Kinzalow, Inoue, Cheon

II. ANALYSIS
A. Motion to Exclude (Paper 25)
Patent Owner moves to exclude “new arguments submitted by Petitioner
[in Petitioner’s Reply].” PO Excl. Mot. 1. In particular, Patent Owner
contends that, in its Reply, Petitioner submits new arguments that “w[ere]
never suggested in the Petition.” Id. at 1–3. According to Patent Owner,
“Petitioner now presents a new theory based on new allegations not presented

2 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103, effective March 16, 2013.
Because the application from which the ’706 patent issued was filed before this
date, the pre-AIA version of § 103 applies.
3 Although Petitioner initially sought to include claims 19, 21, 22, and 25 in its
challenge, Patent Owner statutorily disclaimed those claims after the Petition
was filed. See Ex. 2002. For the reasons discussed in this Decision, we do not
regard disclaimed claims 19, 21, 22, and 25 as claims challenged in the
Petition, and instead regard claims 1–4 as the only challenged claims.
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in the Petition,” wherein, “advancing these new arguments now is improper
and should be excluded from consideration when evaluating the actual grounds
for review as presented in the Petition.” Id. at 3.
In its Opposition to Patent Owner’s Motion to Exclude, Petitioner argues
that the Motion to Exclude “is in clear violation of the rules” because “[a]
motion to exclude is intended to challenge the admissibility of evidence,”
wherein the moving party is required to “(1) object during a deposition, file
objections within ten business days of the institution decision, or file objects
within five business days of service of the evidence,” and “(2) preserve the
objection by filing a motion to exclude that both identifies the objection and
explain the objection.” Pet. Mot. Opp. 1–2 (citing 37 C.F.R. § 42.64(a),
(b)(1)), (2), (c); Consolidated Trial Practice Guide (“TPG”), 79–80) (emphasis
in original). According to Petitioner, “any arguments the Motion attempts to
have stricken at pages 1 and 5-11 are not the proper subject of a motion to
exclude evidence,” and “it is unclear what evidence MobilePay is attempting to
exclude in its Motion at pages 3 and 11-15.” Id. (citing 37 C.F.R. § 42.64(c)
(emphasis in original). In particular, according to Petitioner, the only citations
to evidence are: pages of Tang, the primary reference, but “there was never
any objection to Tang filed within ten days of the institution decision;” and
excerpts from the deposition of Petitioner’s witness, but “there is no objection
in the deposition record on which to base a motion.” Id. at 3 (citing 37 C.F.R.
§ 42.64(b)(1)), (c)).
In weighing the evidence before us, we find more persuasive the
position of Petitioner.
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A party wishing to challenge the admissibility of evidence must file any
objections within five business days of service of evidence to which the
objection is directed, or ten days after institution of trial. 37 C.F.R.
§§ 42.64(a), 42.64(b)(1). Further, as set forth in the Trial Practice Guide
(TPG) Update (2018), a motion to exclude evidence should:
(a) Identify where in the record the objection originally was
made;
(b) Identify where in the record the evidence sought to be
excluded was relied upon by an opponent;
(c) Address objections to exhibits in numerical order; and
(d) Explain the basis and grounds for each objection.
See TPG Update, 16.
A motion to exclude “must explain why the evidence is not admissible
(e.g., relevance or hearsay).” Id. Further, a motion to exclude should not
“address arguments or evidence that a party believes exceeds the proper scope
of reply or sur-reply.”4 Id.
In the Motion to Exclude, Patent Owner merely contends that
Petitioner’s new argument “of using an unknown and undisclosed buffer
instead of Inoue’s buffer” is “a new ground and not alleged in the Petition”
(PO Excl. Mot. 5–11), and “that Tang’s transaction server individual credit
card data” (id. at 11) should not be considered. That is, in its Motion, Patent

4 As made clear in the TPG, the proper route to challenge allegedly new or
untimely argument is in a motion to strike. TPG Update 17 (explaining that
“[i]f a party believes that a brief . . . raises new issues, is accompanied by
belatedly presented evidence, or otherwise exceeds the proper scope of reply or
sur-reply, it may request authorization to file a motion to strike”). Here, Patent
Owner never sought authorization to file a motion to strike.
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Owner does not identify in the record any objection made, let alone explain
why the objection is made (for example, explain why the evidence is not
admissible). See TPG Update, 16. Further, as Petitioner points out, the
Motion does not “challenge the admissibility of evidence,” but rather requests
the striking of arguments submitted. See Pet. Mot. Opp. 1–3.
Accordingly, we agree with Petitioner that the Motion is improper for
failing to identify any evidence to exclude, wherein no objection to the
evidence was properly made within five business days of service or ten days
after institution of trial. Pet. Mot. Opp. 1–3; see TPG Update, 16. In
particular, we agree with Petitioner that, although the Motion points to several
pages of the primary reference to Tang cited, “there was never any objection to
Tang filed within ten days of the institution decision,” and although the Motion
points to excerpts from the deposition of Petitioner’s witness, “there is no
objection in the deposition record on which to base a motion.” Pet. Mot. Opp.
3.
On this record, we DENY Patent Owner’s Motion to Exclude as
improper for failing to identify any evidence to exclude with reference to a
proper objection as set forth in 37 C.F.R. § 42.64(b)(1)), (c).
B. Level of Ordinary Skill in the Art
In determining the level of ordinary skill in the art, various factors may
be considered, including the “type of problems encountered in the art; prior art
solutions to those problems; rapidity with which innovations are made;
sophistication of the technology; and educational level of active workers in the
field.” In re GPAC, Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995) (citation
omitted). Citing its declarant, Dr. Alexander, Petitioner contends that a person
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with ordinary skill in the art at the time of the invention would have held a
Bachelor’s degree in computer science, electrical engineering, or a similar
discipline, and one or two years of work experience in operating systems or
networked computing device communication and power consumption of
networked computing devices, or a related area. Pet. 17 (citing Ex. 1002 ¶ 15).
Patent Owner does not dispute Dr. Alexander’s assessment on the level of
ordinary skill in the art. See generally PO Resp. We adopt the level of
ordinary skill as articulated by Petitioner because, based on the record, this
proposal appears to be consistent with the ’706 patent, the asserted prior art,
and is supported by the testimony of Dr. Alexander.
C. Claim Construction
The instant Petition was filed December 31, 2018. Thus, the new rules
amending the claim construction standard apply here because the Petition was
filed after the November 13, 2018, effective date of the amendment. See
Changes to the Claim Construction Standard for Interpreting Claims in Trial
Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51,340,
51,358 (Oct. 11, 2018) (amending 37 C.F.R. § 42.100(b) effective November
13, 2018) (now codified at 37 C.F.R. § 42.100(b) (2019)). Accordingly, for
this inter partes review, the Board applies the same claim construction
standard as that applied in federal courts.
Under this standard, claim terms “are generally given their ordinary and
customary meaning” as understood by a person of ordinary skill in the art in
question at the time of the invention. Phillips v. AWH Corp., 415 F.3d 1303,
1312–13 (Fed. Cir. 2005) (en banc). “In determining the meaning of the
disputed claim limitation, we look principally to the intrinsic evidence of
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record, examining the claim language itself, the written description, and the
prosecution history, if in evidence.” DePuy Spine, Inc. v. Medtronic Sofamor
Danek, Inc., 469 F.3d 1005, 1014 (Fed. Cir. 2006) (citing Phillips, 415 F.3d at
1312–17). Extrinsic evidence is “less significant than the intrinsic record in
determining ‘the legally operative meaning of claim language.’” Phillips, 415
F.3d at 1317.
Only terms that are in controversy need to be construed, and then only to
the extent necessary to resolve the controversy. Vivid Techs., Inc. v. Am. Sci.
& Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999); Nidec Motor Corp. v.
Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017).
Petitioner contends that “third mechanism on the mobile device
configured to upload the binary data to a cloud service for decoding” appearing
in claim 1 should be construed to mean “hardware (e.g., a transceiver) that is
configured (e.g., by mobile phone operating system or other software) to
upload binary data to a cloud service for decoding.” Pet. 21–22. Petitioner
asserts that “[t]he ’706 patent goes on to explain the action that a ‘software
vendor’ could implement a device to communicate to the cloud through a
mobile phone, after which the ‘data would then be uploaded without
significant change to a server, where it would be decoded.’” Id. at 21, (citing
Ex. 1001, 12:15–22). According to Petitioner, the ’706 patent “identifies the
destination: a ‘“cloud service’ could decode the signals.” Id.
Patent Owner merely asserts that the “plain and ordinary meaning of
‘cloud service’” as understood by a person of ordinary skill in the art is “a
collection of functionality and/or services that are provided by remote devices
and software, and is interacted with via a network, such as the Internet.” PO
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Resp. 9–12 (citing Ex. 2001 ¶¶ 31–34).
The Specification of the ’706 patent does not specifically define the term
“third mechanism” or even “cloud service.” See generally Ex. 1001, Spec.,
Figs. The nearest support in the Specification indicates that:
A ‘cloud service’ could decode the signals. That is, the phone
could be relatively “dumb,” and a device could be used to
communicate to the ‘cloud’ through a mobile phone. A software
vendor could implement a solution, whereby users transmit data
from an accessory, through the audio input of their phone. The
data would then be uploaded without significant change to a
server, where it would be decoded.
Id. at 12:15–22.
We agree with Patent Owner that “cloud service” should be given its
“plain and ordinary meaning” as understood by a person of ordinary skill in the
art. PO Resp. 9–12. We are not persuaded that anything in the claims or the
Specification, including the language quoted above, defines or limits the “third
mechanism” to include “hardware (e.g., a transceiver) that is configured (e.g.,
by mobile phone operating system or other software) to upload binary data to a
cloud service for decoding,” as Petitioner contends. Pet. 22. Rather, we
conclude the “ordinary and customary meaning” of the “third mechanism . . .
configured to upload the binary data to a cloud service for decoding” as recited
in claim 1 is a mechanism that is capable of uploading the binary data to a
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cloud service for decoding, wherein a “cloud service” is a service that is
capable of decoding the uploaded binary data. Ex. 1001, Claim 1.
D. Whether the ’706 Patent can claim the Filing Date of the Provisional
Application as its Priority Date
Petitioner asserts that the priority date for the ’706 patent cannot be
earlier than its actual filing date. Pet. 9. In particular, Petitioner contends that
the Provisional Application does not support “a [third] mechanism on the
mobile device configured to upload the binary data to a cloud service for
decoding” as set forth in the claims of the ’706 patent. Pet. 9–10 (emphasis
added by Petitioner). Petitioner contends that, instead, the Provisional
Application discloses only peripheral-to-device and device-to-device
communication and fails to disclose client-to-cloud communication. Id.
Patent Owner contends that the Provisional Application fully
supports the invention defined by claim 1. PO Resp. 14–25. According to
Patent Owner, the Provisional Application supports claim 1 at least with
respect to a digital camera embodiment, wherein a mobile device uploads
the binary data of digital photographs to an “Internet-based server [that]
decodes the data,” the data including encoded TCP/IP packets incoming
from the mobile device. Id. at 16 (citing Ex. 2001 ¶ 38). Thus, Patent
Owner argues that the challenged claims are entitled to the priority benefit
of the Provisional Application’s March 9, 2009, filing date, and therefore,
Tang is not available as prior art.” Id. at 25.
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1. Principles of Law Regarding Claims of Priority to Provisional
Applications
Claims in a patent are entitled to the benefit of a prior filed
provisional application under 35 U.S.C. § 119(e) if the provisional
application supports the claims in the way required by 35 U.S.C. § 112(a)
or 35 U.S.C. § 112 ¶ 1. Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
800 F.3d 1375, 1378 (Fed. Cir. 2015). “In other words, the specification of
the provisional must ‘contain a written description of the invention and the
manner and process of making and using it, in such full, clear, concise, and
exact terms,’ 35 U.S.C. § 112 ¶ 1, to enable an ordinarily skilled artisan to
practice the invention claimed in the non-provisional application.” Id.
(citing New Railhead Mfg., L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290,
1294 (Fed. Cir. 2002) with emphasis from New Railhead). Although the
written description requirement does not require the applicant “to describe
exactly the subject matter claimed” (In re Gosteli, 872 F.2d 1008, 1012
(Fed. Cir. 1989)), the application “must describe the later claimed invention
‘in sufficient detail that one skilled in the art can clearly conclude that the
inventor invented the claimed invention as of the filing date sought.’”
Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1331 (Fed. Cir.
2008), citing Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed.
Cir. 1997).
2. Whether the Provisional Application Provides Support for the
Claim Term “Third Mechanism . . . configured to upload the
binary data to a cloud service for decoding”
Petitioner contends that the Provisional Application does not support “a
[third] mechanism on the mobile device configured to upload the binary data to
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a cloud service for decoding.” Pet. 10 (emphasis added by Petitioner). In
particular, Petitioner highlights, “nowhere in the ’586 Provisional Application
did the applicant disclose a cloud service for decoding binary data and [a]
mechanism on a mobile device configured to upload such data to the cloud
service.” Pet. 11 (citing Ex. 1002 ¶ 38) (emphasis added). Indeed, the
Provisional Application fails entirely to mention a cloud service for any
decoding function. See generally, Ex. 1004.
However, Patent Owner contends that one embodiment of the
Provisional Application supports the contested limitation, wherein, in the
embodiment, the mobile device uploads the binary data to a domain name
server (DNS), the DNS provides the cloud service of decoding domain names
to identify number-based Internet addresses, and this address is then used for
connecting the mobile device and the Internet-based server. PO Resp. 17–18
(citing Ex. 1004 ¶ 6; Ex. 2001 ¶ 40). Further, Patent Owner contends that the
Provisional Application discloses support for a smartphone, such as an iPhone,
with “an ‘always-on Internet connection’” uploading “encoded data (e.g., data
encoded in TCP/IP packets) to an Internet server (e.g. cloud service),” where
“the TCIP/IP packets are decoded upon reception.’” Id. at 18–22 (citing
Ex. 1004 ¶¶ 3, 4, 6, 52, 61, 88, 98; Ex. 1002 ¶¶ 63, 123, 127; Ex. 2001
¶¶ 43,45, 46).
In weighing the evidence before us, we find more persuasive the
position of Petitioner.
We agree with Petitioner that the Provisional Application is lacking in
support for “a [third] mechanism on the mobile device configured to upload
the binary data to a cloud service for decoding” as claimed. Pet. 11. In
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particular, although the sections of the Provisional Application referenced by
Patent Owner disclose mobile devices such as iPhones for communicating to
the Internet using TCP/IP protocol (Ex. 1004 ¶¶ 3, 4, 6, 52, 61, 88, 98), we do
not find any disclosure in the Provisional Application of a step of uploading
“encoded data (e.g., data encoded in TCP/IP packets) to an Internet server (e.g.
cloud service),” where “the TCIP/IP packets are decoded upon reception.’”
PO Resp. 18–22. In particular, we do not find any disclosure of any decoding
in the referenced portions of the Provisional Application, let alone of encoded
data in TCP/IP packets. Id.
We also do not find any disclosure of a mobile device that uploads the
binary data to a DNS that provides the cloud service of decoding domain
names to identify number-based Internet addresses. PO Resp. 17–18. In
particular, we do not find any DNS, let alone one that decodes domain names
to identify number-based Internet addresses used for connecting the mobile
device and the Internet-based server. Id.
As Petitioner points out, “cloud service” is only mentioned in one
section of the Specification, the section being “added to the specification [of
the ’706 patent] when it was filed on May 8, 2010,” not when the Provisional
Application was filed. Tr. 7–8. A comparison of the Provisional Application
and the ’706 patent shows that Patent Owner added significant portions of text
to support the new claims at the time of filing the ’706 patent. Compare
Provisional Application (Ex. 1004), with the ’706 patent (Ex. 1001). For
example, the ’706 patent includes the following newly added text:
A ‘cloud service’ could decode the signals. That is, the phone
could be relatively “dumb,” and a device could be used to
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communicate to the ‘cloud’ through a mobile phone. A software
vendor could implement a solution, whereby users transmit data
from an accessory, through the audio input of their phone. The
data would then be uploaded without significant change to a
server, where it would be decoded.
Ex. 1001, 12:15–22.
During oral arguments, Patent Owner contends that the Provisional
Application discloses an embodiment in which a user uploads multiple
photographs at one time to an Internet-based server, and the Internet-based
server in turn receives those photographs, stores the photographs, generates a
URL (“uniform resource locator”), and then provides the URL back down to
the user. Tr. 21. Thus, the user is then able to send to another user the URL,
and the other user uses that URL to access the photos from the Internet-based
server. Id. Patent Owner contends that, in this embodiment, the uplink from
the user’s phone to the Internet-based server would use traditional
communication links such as WiFi, 3G, etc., built into the iPhone, and the
packets are then decoded from WiFi and 3G, wherein, since multiple
photographs are sent at one time, there is a need to “separately parse [the
photographs] out and stick them in some kind of a data file and then generate
the URL link.” Id. at 22, 24–25.
Patent Owner explains that this embodiment of the Provisional
Application is similar to Tang, the primary reference in the Petition, in that
“the internal data is going to have to be rearranged in some form to be handed
off and then processed later.” Tr. 28. That is, the network “is necessarily
going to have to parse those photographs from the entire stream of data packets
that it receives” so that it can process and send the data packet to the other
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user’s device when received. According to Patent Owner, Tang is similar in
that “multiple data fields of a credit card . . . are read” and then “would be
parsed out by the transaction server.” Id. at 28–29.
However, as Petitioner points out in response, in the paragraphs cited by
Patent Owner for support for the above assertions, “there is little support for
anything that [Patent Owner] said about the parsing of the photos that’s going
to happen on the server.” Tr. 39. In particular, we agree with Petitioner that
“[i]t’s unclear what exactly of the binary data of the photos is actually going to
actually be decoded at the server,” because “there’s no indication that the
phone is then just being used as a transmission unit,” wherein it could be “the
phone that actually parses those photos to present the photos.” Id. In fact, in
various exemplary embodiments set forth in the Provisional Application, it is
the phone and not the server that is indicated as being provided for “decoding
modulated information from ambient audio in the environment.” See Ex. 1004
¶¶ 37–38. Thus, we are persuaded by Petitioner’s contention that, in this
scenario, “it’s very possible that the photos could have been uploaded as a
string of binary data,” “[t]he URL then accesses that string of binary data,” and
“then the phone downloads that binary data.” Tr. 37.
Although we are persuaded by Patent Owner’s contention that the
described Internet-based server can be a “cloud service” (Tr. 21), we are
persuaded by Petitioner’s contention that the paragraphs referenced by Patent
Owner only describe explicitly “a cloud service for receiving, storing and
delivery of photos,” wherein we do not find any description of “the idea of the
cloud service of decoding the binary data,” as claimed. Tr. 39. We agree with
Petitioner that “[m]ere storage of binary data is not sufficient for these claims,”
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and that receiving data via the Internet, such as general packet radio services
(“GPRS”) data, even if Tang also receives GPRS data, “is not sufficient for
decoding.” Id.
We are also persuaded by Petitioner’s contention that “decoding” being
asserted by Petitioner, is “not just receiving packets of internet data and
reassembling binary data,” i.e., not “just mere packetization/ depacketization.”
Tr. 41. Petitioner’s expert, Dr. Alexander, was cross-examined by Patent
Owner on this subject, and he testified in his deposition that, with GPRS, data
is transferred in series of smaller packets and reassembled at the destination,
but that is “not decoding the data, [but] just taking the segments of data and
reassembling them into one block.” Ex. 2008, 39:12–40:2; see also id. at 44:7–
19 (“Reassembly in my understanding would not be considered decoding to
extract credit card information such as name and account number”).
In contrast to the Provisional Application, Tang discloses a transaction
server that decodes to recover the transaction card data and the payment
details, wherein the transaction data is reformatted and sent to a remote
processor/issuer, which then either approves or rejects the transaction. See
Ex. 1005 ¶ 98. That is, Tang is decoding the data to recover data, not just mere
depacketization of data. Id.
Based on the evidence of record, we do not agree with Patent Owner’s
contention that the Provisional Application’s cited network “is necessarily
going to have to parse those photographs from the entire stream of data packets
that it receives” so that it can process and send the data packet to the other
user’s device when received. See generally PO Resp 28. Instead, Petitioner
persuades us that the evidence shows that the Provisional Application fails to
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provide written description support for the “third mechanism on the mobile
device configured to upload the binary data to a cloud service for decoding.”
Accordingly, the Provisional Application does not support a priority date
prior to March 8, 2010, for claim 1. Therefore, based on the totality of the
circumstances, on this record, we determine that Petitioner has shown that the
’706 patent is not entitled to the priority benefit of the filing date of the
Provisional Application. Thus, we conclude that Tang, with an effective date
of February 10, 2010, as conceded by Patent Owner, is prior art under §102(e).
PO Resp. 25.
E. Obviousness over Tang, Kinzalow, and Inoue.
Petitioner asserts that claims 1 and 4 are unpatentable under § 103 as
obvious over Tang, Kinzalow, and Inoue; and that claims 2 and 3 are
unpatentable under § 103 as obvious over Tang, Kinzalow, Inoue, and Cheon.
Pet. 5. To support its contentions, Petitioner cites to the Declarations of
Dr. Alexander. Exs. 1002, 1012. Patent Owner counters that Tang is not prior
art (PO Resp. 25–26) and that the prior art combination does not teach or
suggest certain claim limitations. PO Resp. 27–66, 73–84. Patent Owner also
contends that there is no motivation to combine the references. Id. at 67–73.
Patent Owner cites to the Declarations of Dr. Sirovica. Exs. 2001, 2007.
Patent Owner also cross-examined Dr. Alexander. Ex. 2008.
For the reasons provided below, we determine that Petitioner has
demonstrated that claims 1 and 4 would have been obvious over Tang,
Kinzalow, and Inoue; and that claims 2 and 3 are obvious over Tang,
Kinzalow, Inoue, and Cheon. We provide a brief summary of Tang, Kinzalow,
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Inoue, and Cheon, before turning to the relevant contentions advanced by the
parties.
Tang (Ex. 1005)
Tang is titled, “Apparatus and Method for Commercial Transactions
Using a Communication Device,” and was published on September 2, 2010,
with an international filing date of February 10, 2010. Ex. 1005, codes (54),
(43), (22). Tang relates to an apparatus for commercial transactions using a
transaction card via a communication device in audio communication with a
remote processor assembly. Id., Abstract. In particular, Tang discloses an
input device that captures card information from the transaction card, and a
controller that converts the inputted information to an audio signal. Id. The
information is then transmitted to a transaction server via a communication
device to be converted to an appropriate signal, which in turn is transmitted to
a remote processor/issuer for validation of the transaction. Id.
In one embodiment, Tang discloses a portable point of sale (POS) device
linked to the communication device, thereby providing a transaction and
communication assembly. Id. ¶ 72. The POS device includes an input device
to capture information from the transaction card, such as a credit card reader,
and a controller to process and convert the captured information to an audio
format suitable for transmission over an analog voice channel. Id. ¶¶ 72–74.
The communication device comprises a wireless communication device, a
mobile phone, a cellular phone, a landline phone, a smart phone, or the like.
Id. ¶ 71. A remote transaction processing server receives information from the
communication device to validate a commercial transaction, and either
approves or rejects the transaction. Id. ¶ 77.
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Figure 1 further illustrates several of Tang’s key teachings and is
reproduced below.

Figure 1 shows transaction network 10, including transaction device 12
and communication device 14, which together form transaction and
communication assembly 16. Id. ¶ 79. Figure 1 also shows communication
network 26 (e.g. Internet, GSM/GPRS network), and transaction server 18 and
transaction processor/issuer 20, which together form remote processor
assembly 22. Id.
As shown in Figure 1, a request for a transaction from a transaction card
occurs at transaction device 12, which captures information from the
transaction card and converts this information into an audio signal, the audio
signal is transmitted to communication device 14 for transmission to
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transaction server 18 via communication network 26, transaction server 18
converts the audio signal into a digital signal to transmit to remote
processor/issuer 20, and remote processor/issuer 20 then validates this request
by accepting or denying the request. Id. ¶ 79. In an example, transaction
server 18 receives data from communication device 14, decodes the data to
recover the transaction card data and the payment details, and the transaction
data is reformatted and sent to remote processor/issuer 20 which either
approves or rejects the transaction. Id. ¶ 98.
Figure 2 illustrating an embodiment of Tang’s transaction and
communication assembly is reproduced below.

Figure 2 shows transaction and communication assembly 16 in a first
exemplary embodiment. Id. ¶ 80. As shown in Figure 2, transaction device 12
in the form of a POS device is linked by cable 30 to communication device 14
in the form of a mobile phone. Id. Transaction device 12 also includes input
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device 38 such as card reader slot 39 for swiping and inserting a transaction
card and capturing information therefrom, wherein transaction device 12
captures the information and converts the information into an audio signal for
transmission to communication device 14. Id. ¶ 81.
Figure 5 illustrating a control system of an embodiment of Tang’s
transaction device is reproduced below.

Figure 5 shows the control system of transaction device 12 of the first
embodiment. Id. ¶ 67. As shown in Figure 5, transaction device 12 includes
controller 50, which can be in the form of a microcontroller (MCU), and input
device 38, which can be in the form of analog reader 52 such as a magnetic
stripe reader and/or digital signal reader 54 such as an Integrated Circuit (IC)
or Smart Card. Id. ¶ 83. As shown in Figure 5, the input system of transaction
apparatus 12 can also include an additional input device in the form of control
pad 40. Id. Controller 50 converts information captured by input device 38 (or
additional input device 40) into an analog audio signal suitable for
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transmission over an analog communication link between transaction device 12
and communication device 14. Id. ¶ 86.
As shown in Figures 2 and 5, in this first embodiment, to execute a
commercial transaction, the user swipes a transaction card through slot 39,
wherein the analog information on the magnetic stripe of the card is captured
by magnetic stripe reader 52 and transferred to controller 50 (“MCU 50”), or
alternatively, the digital information from the IC chip of the card is captured by
digital signal reader 54 and is transferred to controller 50. Id. ¶ 85.
Transaction server 18 receives information from communication device 12
over communication network 26. Id. ¶ 87. The information received by
transaction server 18 is decrypted into a digital signal and the information is
utilized to validate a commercial transaction. Id.
Figure 7 illustrating another embodiment of Tang’s transaction and
communication assembly is reproduced below.

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Figure 7 shows transaction and communication assembly 16’ in a second
exemplary embodiment. Id. ¶ 69. As shown in Figure 7, transaction and
communication assembly 16’ includes communication device 14 in the form of
a mobile phone linked via cable 30 to transaction device 12’. Id. ¶ 100.
Transaction device 12’ includes input device 38’ in the form of slot 39’ for
capturing information from a transaction card and sending this information
without conversion directly to mobile phone 14 via cable 30. Id. Additional
input device is provided by mobile phone 14 in the form of control pad 40’.
Id.
Figure 8 illustrating a control system of another embodiment Tang’s
transaction device is reproduced below.

Figure 8 shows the control system of communication device 14 of
transaction and communication assembly 16’ of the second embodiment shown
in Figure 7. Id. ¶ 70. As shown in Figure 8, controller 51 of communication
device (mobile phone) 14 is the controller of transaction and communication
assembly 16’. Id. ¶ 100. Software application of controller 51 is installed to
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convert between audio and digital signal and to receive and transmit audio data
to and from hands-free interface 41. Id.
In this second embodiment, to send money, for example, the user plugs
transaction device 12’ into communication device 14 and selects “send money”
via control pad 40’. Id. ¶ 101. Following instructions on communication
device 14, the user swipes the transaction card against card reader slot 39’ on
transaction device 12’. Id. The analog signal from the magnetic transaction
card is sent via hands-free interface 41, where the software application of
controller 51 converts the received signal back to binary data as stored on the
transaction card. Id. Optionally, the user has to enter a personal identification
number (PIN) for authentication as in the case of a debit card transaction
through the software application. Id.
In this second embodiment, as explained with respect to transaction
network 10 of Figure 1, after the user has confirmed the transaction, a call is
made to transaction server 18, wherein the transaction card data along with the
transaction data are encoded and sent to transaction server 18 in the form of
general-packet radio-service (GPRS) data. Id. ¶ 102. Transaction server 18
decodes the transaction data, reformats and sends this data to processor/issuer
20 for approval, and this validation information data is then returned to
transaction server 18, which in turn sends the validation data back to
communication device 14 in audio format. Id.
Kinzalow (Ex. 1006)
Kinzalow is titled, “System for Interfacing a Communication Device
with a Radio for Hands-Free Operation,” and issued on April 18, 2000, with a
filing date of September 18, 1997. Ex. 1006, codes (54), (45), (22). Kinzalow
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relates to interfacing a portable cellular phone with an automobile radio. Id.,
Abstract. The interface converts phone signals from audio frequencies to radio
frequencies so that the radio receiver can receive the signal. Id. The signal is
then reproduced over the radio’s speakers. Id.
In particular, Kinzalow discloses an embodiment wherein the interface is
connected to an interface socket of a phone. Id. at 5:15–21. Once connected,
all audio signals are directed through the interface, and the phone speaker and
microphone are disabled. Id.
Inoue (Ex. 1007)
Inoue is titled, “Microcontroller with Multiple Function Blocks and
Clock Signal Control,” and issued on June 6, 2006, with a filing date of
January 27, 2003. Ex. 1007, codes (54), (45), (22). Inoue relates to a
microcontroller comprising input and output ports. Id., Abstract.
Figure 1 is representative of the Inoue embodiment and reproduced
below.
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Figure 1 depicts a microcontroller with output ports. Id. at 1:47–49. As
shown in Figure 1, microcontroller 100 includes input/output ports (ports A
and B) and functional blocks (peripheral functional blocks 101 and 102), each
associated with one of the ports A and B for performing predetermined
functions. Id. at 1:63–2:2. Port controlling block 108 controls input/output of
data via port A and port controlling block 109 controls input/output of data via
port B. Id. at 2:14–17. Ports A and B are used for inputting data from and
outputting data to an external device relative to microcontroller 100. Id. at
2:18–20.
Port controlling block 108 includes port A output controlling circuit 111,
primary function output controlling register 112, multiplexer 113, output buffer
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114, and input buffer 115 for transmitting a signal input from an external
device via port A to an internal circuit. Id. at 3:35–44. Port controlling block
109 includes port B output controlling circuit 116, primary function output
controlling register 117, multiplexer 118, output buffer 119, and input buffer
120 for transmitting a signal input from an external device via port B to an
internal circuit. Id. at 3:45–63.
In an operation of inputting an external signal via port B, in response to
an output from port B output controlling circuit 116, output buffer 119
becomes inactive, a function of outputting a signal via port B is stopped, and
input of an external signal via port B can still be performed. Id. at 4:27–39. In
this embodiment, the signal input to microcontroller 100 via port B is
transmitted to the internal circuit by input buffer 120. Id. at 4:39–41.
Cheon (Ex. 1008)
Cheon is titled, “External Device for Mobile Communication Terminal
and NFC Method Using the Same,” and issued on September 11, 2012, with a
filing date of December 22, 2006. Ex. 1008, codes (54), (45), (22). Cheon
relates to “a mobile communication terminal, which enables non-contact NFC
with the outside through a Near Field Communication (NFC) unit.” Id.,
Abstract.
1. Tang as Prior Art
Patent Owner contends Tang is not prior art. PO Resp. 2. According to
Patent Owner, “[t]he ’706 Patent claims priority to and is fully supported by
[the Provisional Patent], which predates Tang.” Id. However, as discussed
above in Section II(D), we are persuaded by Petitioner’s arguments that the
’706 patent is not entitled to the priority date of the Provisional Application.
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Without the benefit of the priority date of the Provisional Application, the ’706
patent does not predate Tang. Accordingly, based on the record before us, we
are persuaded that Tang is prior art.
2. Principles of Law Regarding Obviousness
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) objective evidence of
nonobviousness.5 Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
Further,
the test for obviousness is not whether the features of a secondary
reference may be bodily incorporated into the structure of the
primary reference; nor is it that the claimed invention must be
expressly suggested in any one or all of the references. Rather,
the test is what the combined teachings of the references would
have suggested to those of ordinary skill in the art.
See In re Keller, 642 F.2d 413, 425 (CCPA 1981); see also In re Mouttet, 686
F.3d 1322, 1332 (Fed. Cir. 2012) (citing Keller, 642 F.2d at 425).

5 Neither party has presented arguments regarding objective evidence of
nonobviousness in the instant proceeding.
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3. Independent claim 1
a. “A system for coupling a credit card reader to a mobile
device” (Preamble)
Petitioner contends that the combination of Tang, Kinzalow, and Inoue
teaches the features recited in the preamble. Pet. 23. In particular, Petitioner
contends, “Tang discloses a credit card reader 38 coupled to a mobile device
14.” Id. at 23–24 (citing Ex. 1005 ¶¶ 2, 3, 71, 80, Fig. 2 (emphases provided
by Petitioner)). Patent Owner does not dispute Petitioner’s analysis of the
preamble of claim 1. See generally PO Resp. We have reviewed Petitioner’s
explanations and supporting evidence regarding this preamble language.
Regardless of whether the preamble is limiting, Petitioner has demonstrated
persuasively that the combination of Tang, Kinzalow, and Inoue teaches a
“system for coupling a credit card reader to a mobile device” recited in the
preamble.
b. “a hardware component that connects to the mobile
device and the credit card reader”

Petitioner contends that the combination of Tang, Kinzalow, and Inoue
teaches “a hardware component that connects to the mobile device and the
credit card reader.” Pet. 25–26. In particular, Petitioner contends, “Tang
explains that the ‘input device captures the card information, the controller
converts the card information into an audio signal that is transmitted via the
communication link to the communication device.’” Id. (citing Ex. 1005
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¶¶ 14, 44, 45, 49, 55, 57, 71, 72). That is, “the claimed hardware component
corresponds to Tang’s ‘controller’ in combination with its ‘communication
link.’” Id. at 26 (citing Ex. 1005 ¶¶ 3, 13, 80).
Patent Owner does not separately address Petitioner’s contentions
regarding the “hardware component” of claim 1. See generally PO Resp. We
have reviewed Petitioner’s explanations and supporting evidence regarding this
limitation, and find them persuasive. Thus, Petitioner has demonstrated
persuasively that the combination of Tang, Kinzalow, and Inoue teaches “a
hardware component that connects to the mobile device and the credit card
reader.”
b1. “a first mechanism configured to receive data provided
by the credit card reader”
Petitioner contends that the combination of Tang and Inoue teaches “a
first mechanism configured to receive data provided by the credit card reader.”
Pet. 27–30. In particular, Petitioner contends that “Tang’s controller . . .
necessarily has a first mechanism as the part of the controller configured to
receive data provided by the credit card reader.” Id. at 27 (citing Ex. 1005
¶¶ 43, 44 (“[A] controller [] linked to said input device”), ¶ 49 (“[A]
transaction and communication assembly comprising an input device for
capturing information from the transaction card”)). According to Petitioner,
“Tang’s controller receives the captured credit card data.” Id. (citing Ex. 1005
¶ 73 (“The input device is used to capture information including and not
limited to card data . . . from the transaction card”); Ex. 1002 ¶¶ 84–87).
According to Petitioner, “[l]ike the ’706 patent, Tang does not describe
the controller’s configuration in great detail.” Pet. 27 (compare Ex. 1005 ¶ 83,
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Fig. 5, with Ex. 1001, 12:42–13:2; Ex. 1002 ¶ 95). However, Petitioner
contends that a person of ordinary skill in the art (“ POSITA”) would “consider
other prior art for a configuration of Tang’s controller, such as Inoue.” Id. at
27–28. Petitioner contends that, as shown in its annotated Figure 1 reproduced
below, Inoue discloses a controller including a port controlling block that
receives data at a port, which corresponds to the claimed “first mechanism.”
Id. at 28 (citing Ex. 1007, Fig. 1, Abstract, 3:45–54; Ex. 1002 ¶¶ 72–74).

Annotated Figure 1 of Inoue from the Petition depicts a microcontroller
with output ports. Ex. 1007, 3:45–4:59. According to Petitioner, as shown in
annotated Figure 1, port controlling block (shown in red) “receives data at port
B (blue), which corresponds to the ‘first mechanism.’” Pet. 28 (citing Ex.
1007, Fig. 1, Abstract, 3:52–54; Ex. 1002 ¶¶ 72–74).
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Patent Owner responds that “Petitioner does not identify with any
specificity what it alleges is the ‘first mechanism configured to receive[] data
provided by the credit card reader.’” PO Resp. 58 (citing Pet. 27–32). That is,
Patent Owner contends that “Petitioner does not explicitly identify Tang’s
controller as an MCU or a [microprocessor] MPU.” Id. at 58–59 (citing Pet.
27–32). Instead, Patent Owner alleges, “Petitioner refers to Tang’s MCU as
Tang’s ‘controller’ with respect to the first mechanism element to disguise the
fact that Petitioner is indeed identifying the same element (Tang’s MCU) as
both the first mechanism and the first circuit.” Id. at 59.
Patent Owner’s contentions do not undermine Petitioner’s showing.
Contrary to Patent Owner’s contention that “Petitioner does not identify
with any specificity what it alleges is the ‘first mechanism configured to
receive[] data provided by the credit card reader’” because “Petitioner does not
explicitly identify Tang’s controller as an MCU or a MPU” (PO Resp. 58–59),
Petitioner relies on the combination of Tang and Inoue, and not Tang alone, for
teaching the claimed “first mechanism.” See Pet. 27–30. Here, Petitioner
specifies that “Tang’s controller receives the captured credit card data” and
acknowledges that “Tang does not describe the controller’s configuration in
great detail.” Pet. 27. However, Petitioner also clearly specifies that, as shown
in its annotated Figure 1 of Inoue, Inoue discloses a controller including a port
controlling block that receives data at a port (port B, shown in blue), which
corresponds to the claimed “first mechanism.” Pet. 28. According to
Petitioner, “Tang in view of Inoue satisfies the first mechanism configured to
receive data provided by the credit card reader at least with port B.” Id. (citing
Ex. 1002 ¶¶ 94–97) (emphasis omitted). As Dr. Alexander testified in his
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deposition, using a controller with a designated input port as disclosed in Inoue
would “add efficiencies” by staging the receiving of data. Ex. 2008, 118:5–12.
We note Patent Owner does not address Petitioner’s reliance on the data
receiving port of Inoue. See generally PO Resp. 58–59.
Furthermore, we are not persuaded by Patent Owner’s contention that
Petitioner cannot identify the same “element” (Tang’s MCU) as both the “first
mechanism” and the “first circuit” (PO Resp. 59), because nothing in the claim
language prohibits the claimed “first mechanism” and “first circuit” from being
encompassed in a single MCU. Here, claim 1 does not expressly indicate that
the “first mechanism” and the “first circuit” are mutually exclusive
components, and nothing in claim 1 requires that the “first mechanism” and the
“first circuit” be multiple components. In fact, the claim language itself
suggests that the “first mechanism” and the “first circuit” can be a single unit,
i.e., comprised within a single “hardware component.”
The Specification of the ’706 patent further discloses the first
mechanism and the first circuit as a unitary device formed as a single
microcontroller. Ex. 1001, Fig. 1, 6:59–7:15. In particular, Figure 1 of the
’706 patent discloses hardware component 004 that includes as a single device:
serial port 003 (a first mechanism of claim 1), and FSK generator 006 (a first
circuit of claim 1). Id. That is, the ’706 patent discloses at least one
embodiment wherein the disputed elements are provided in a single hardware
component, 004.
Accordingly, we are not persuaded by Patent Owner’s contention that
the two elements cannot read on Tang’s MCU. PO Resp. 59; see also In re
Kelley, 305 F.2d 909, 915–16 (1962) (noting that two limitations can read on
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the same structure). Nevertheless, the combination of Tang and Inoue teaches
the “first mechanism” and the “first circuit” being separate components. In
particular, Inoue discloses providing components in a system as separate
components (see Ex. 1007, Fig. 1), and thus, the combination of Inoue with
Tang still teaches that the components may be provided as separate
components.
On this record, Petitioner has demonstrated sufficiently that the
combination of Tang and Inoue teaches the “first mechanism” recited in claim
1.
b2. “a communication controller for buffering the data
received from the credit card reader prior to conversion by
a first circuit”
Petitioner contends that the combination of Tang and Inoue teaches “a
communication controller for buffering the data received from the credit card
reader prior to conversion by a first circuit.” Pet. 33–34. In particular,
although Petitioner acknowledges that “Tang does not expressly disclose
components of the controller between the controller’s input and the internal
MCU of its controller,” Petitioner contends that “Inoue discloses a
communication controller for buffering the data corresponding to port
controlling block 109 of controller 100.” Id. at 33. According to Petitioner,
“Inoue discloses a controller that receives data from an external source and
then processes the received data.” Id. at 28 (citing Ex. 1007, Abstract, Fig. 1,
3:45–54).
Petitioner contends that, as shown in its annotated Figure 1, reproduced
below, Inoue discloses a port controlling block that corresponds to the
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“communication controller for buffering the data,” which comprises an “input
buffer” that corresponds to the claimed “data buffer.” Pet. 33–34 (citing
Ex. 1007, Fig. 1, 2:15–17, 3:52–54 (“[buffer 120 is] an input buffer [] for
transmitting a signal input from an external device via the port B to the internal
circuit”); Ex. 1002 ¶¶ 101–02).

Annotated Figure 1 depicts Inoue’s microcontroller with output ports.
Ex. 1007, 3:45–4:59. According to Petitioner, as shown in annotated Figure 1
of Inoue, port controlling block (shown in red) is “for controlling input/output
of data via the port B”, while input buffer 120 (shown in green) is the “data
buffer.” Pet. 33–34 (citing Ex. 1007, Fig. 1, 2:15–17, 3:52–54; Ex. 1002 ¶¶
101–02). Thus, according to Petitioner, although “Tang does not disclose the
configuration between the input device and its MCU, . . . Inoue does.” Id. at
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31. Petitioner contends that “a POSITA, noting that Tang’s disclosure lacked
detail of the configuration between its MCU and external input device, would
have looked to another reference for a configuration,” wherein “Inoue disclose
such a configuration.” Id. (citing Ex. 1002 ¶ 95).
According to Petitioner, “using a controller with a designated input port
and an input buffer as disclosed in Inoue would make the system more
efficient.” Pet. 31–32 (citing DyStar Textilfarben GmbH & Co. Deutschland
KG v. C.H. Patrick Co., 464 F.3d 1356, 1368 (Fed. Cir. 2006) (“[A]n implicit
motivation to combine exists . . . when the ‘improvement’ is technology-
independent and the combination of references results in a product . . . that is
more desirable, for example because it is . . . more efficient.”)).
Relying on Dr. Alexander’s testimony, Petitioner contends,
Combining the teachings of Tang’s controller receiving data
from an input device with Inoue’s teachings of a controller
having a port to receive data from external devices and an input
buffer to temporarily store the received data would have
employed a known technique—e.g., controller with port and
input buffer in Inoue to improve a similar device (a controller
of Tang) in the same way, i.e., to receive and process data.
Pet. 32 (citing Ex. 1002 ¶¶ 95–97).
Accordingly, Petitioner contends “[a] POSITA would have been
motivated to improve Tang by using a controller with a port for receiving data
and an input buffer for storing data as taught by Inoue.” Pet. 32. Indeed,
according to Dr. Alexander, “using a buffer to ensure data integrity is a known
way for a controller to control data input/output,” wherein “a POSITA would
expect that applying the teachings of Inoue’s controller to Tang’s controller
would yield predicable and successful results.” Id. (citing Ex. 1002 ¶ 97).
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In response, Patent Owner contends that, in Tang, “there is nothing
between the card reader input and the MCU except for an electrical
wire/connector,” and “[d]espite the lack of need for additional circuitry
between Tang’s card reader and MCU, Petitioner asserts Inoue’s port
controlling block 109 ‘corresponds to the communications controller for
buffering the data,’” wherein “Petitioner specially asserts Inoue’s single bit
logic gate digital buffer as corresponding to the claimed data buffer.” PO
Resp. 63–64 (citing Pet. 33). However, Patent Owner contends, “Inoue’s
single bit logic gate digital buffer is the only part of the port controlling block
that receives input data,” whereas the claim “requires a separate first
mechanism and communications controller for buffering data.” Id.
Patent Owner references its annotated Figure 1 of Inoue, reproduced
below, to explain.

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Annotated Figure 1 from the Patent Owner Response depicts Inoue’s
microcontroller with output ports. Ex. 1007, 3:45–4:59. According to Patent
Owner, as shown in annotated Figure 1 of Inoue, port controlling block
comprises output circuitry (shown in blue) and input circuitry (shown in
green). PO Resp. 66. Patent Owner contends that “Inoue’s single logic gate
digital buffer cannot satisfy two separate claim elements.” Id. at 64–66 (citing
Pet. 34). That is, according to Patent Owner, although Petitioner relies on
Inoue’s port controlling block for the claimed “first mechanism,” Petitioner
also relies upon Inoue’s port controlling block for the claimed “communication
controller for buffering the data,” wherein “[w]ithin Inoue’s port controlling
block, there is a single element that has anything to do with incoming data-the
single logic gate digital buffer.” Id. at 67 (citing Pet. 58, 63).
Furthermore, Patent Owner contends that, “[i]mportantly and
significantly, . . . the input buffer 120 [of Inoue] is a ‘single logic gate,’ which
means it buffers data ‘one bit at a time—that is, the digital data is buffered
serially.’” PO Resp. 55 (citing Pet. 30), 70. Patent Owner argues that adding a
single bit buffer would not increase efficiency of the combined device. Id. at
31. Patent Owner continues that a credit card is often encoded with over 100
bits of data and that buffering the data one bit at a time would not be efficient.
Id. Thus, according to Patent Owner, “adding Inoue’s single bit digital buffer
to the Tang system would only introduce a propagation delay for the time to
send data from the card reader to the Tang MCU.” Id. at 73.
Patent Owner then contends that “[the] combination [of Tang and Inoue]
would render the Tang system inoperable for its intended purpose.” PO Resp.
30 (citing Ex. 2001 ¶ 74), 69. Specifically, Patent Owner posits that
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[i]f . . . one was to place a single bit digital [buffer] between the
credit card reader and the MCU, the digital buffer would render
the modified system useless for processing transactions
involving a magnetic swipe of a credit card, which generates
analog data.
PO Resp. 30–31 (citing Ex. 2001 ¶ 74).
Thus, Patent Owner contends that “there is no motivation to add
Inoue[’s] bi-directional input/output port controller to Tang, especially when
Tang discloses an input only pathway of data from its input device.” PO Resp.
55. According to Patent Owner, “[a]dding a one-bit buffer would add
complexity and cost with no benefit to Tang,” wherein “there are no problems
presented in Tang or provided by Inoue that a bi-directional digital port
controller would fix or improve.” Id. at 55–56. Instead, according to Patent
Owner, “Inoue’s one-bit digital buffer would interfere with Tang’s
functionality and render the Tang system unable to operate as intended.” Id. at
56, 70–71. Accordingly, “[n]o POSITA would be motivated to add a useless
component; it would prevent the system from processing analog data received
from the card reader.” Id. (citing Ex. 2001 ¶¶ 66–69).
Patent Owner’s contentions do not undermine Petitioner’s showing.
Although Patent Owner contends that Petitioner’s use of “Inoue’s single
logic gate digital buffer cannot satisfy two separate claim elements” (PO Resp.
64–66 (citing Pet. 34)), the claim language does not prohibit multiple features
of the claims from encompassing a single buffer.
Nevertheless, we note that Petitioner did not rely on Inoue’s single logic
gate digital buffer for two separate claim elements. In particular, Petitioner
relies on Inoue’s port B as the “first mechanism” and relies on Inoue’s input
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buffer 120 as the “data buffer.” See Pet. 28, 33–34. Petitioner’s annotated
Figure 1 of Inoue is reproduced below.

Annotated Figure 1 from the Petition depicts Inoue’s microcontroller
with output ports. Ex. 1007, 3:45–4:59. According to Petitioner, as shown in
annotated Figure 1 of Inoue, data is received at “port B (blue), which
corresponds to the ‘first mechanism’” (Pet. 28 (citing Ex. 1007, Fig. 1,
Abstract, 3:52–54; Ex. 1002 ¶¶ 72–74)), and input buffer 120 (shown in green)
is the “data buffer.” Pet. 33–34 (citing Ex. 1007, Fig. 1, 2:15–17, 3:52–54;
Ex. 1002 ¶¶ 101–02). Accordingly, we are unpersuaded by Patent Owner’s
contention that Petitioner uses “Inoue’s single logic gate digital buffer [to]
satisfy two separate claim elements.’” PO Resp. 64–66.
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We also are not persuaded by Patent Owner’s contention that “there is
no motivation to add Inoue bi-directional input/output port controller to Tang,
especially when Tang discloses an input only pathway of data from its input
device.” PO Resp. 55. As Dr. Alexander testified in his cross-examination by
Patent Owner, “Inoue discloses the concept of using buffers as a mechanism
for data entry and one would apply that to - to the Tang concept.” Ex. 2008,
118:5–20. Here, Petitioner contends “a POSITA would expect that applying
the teachings of Inoue’s controller to Tang’s controller would yield predicable
and successful results.” Pet. 32 (citing Ex. 1002 ¶ 97). According to
Dr. Alexander, Inoue’s buffer concepts “add efficiencies like the ability to
stored received data while processing previously received data . . . . ‘a more
stable staging of the data so that the microprocessor can respond to that
available data.’” Ex. 2008, 118:5–12.
A combination of familiar elements according to known methods “is
likely to be obvious when it does no more than yield predictable results.” See
KSR, 550 U.S. at 416. As Petitioner points out, “both Tang and Inoue disclose
a controller that processes data received from external devices.” Pet. 31. As
KSR instructs, “[w]hen a work is available in one field of endeavor, design
incentives and other market forces can prompt variations of it, either in the
same field or a different one,” wherein “[i]f a person of ordinary skill can
implement a predictable variation, § 103 likely bars its patentability” because
“a person of ordinary skill in the art would recognize that it would improve
similar devices in the same way, using the technique is obvious unless its
actual application is beyond his or her skill.” KSR, 550 U.S. at 417.
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Although Patent Owner contends that “Inoue’s one-bit digital buffer
would interfere with Tang’s functionality and render the Tang system unable to
operate as intended” (PO Resp. 56, 70–71), the test for obviousness is not
whether the Inoue’s system may be bodily incorporated into Tang’s system.
Rather, the test is what the combined teachings of Tang and Inoue would have
suggested to those of ordinary skill in the art. See Keller, 642 F.2d at 425.
Here, as Dr. Alexander testified in his cross-examination by Patent Owner,
Petitioner is proposing to incorporate Inoue’s buffer concepts to “add
efficiencies like the ability to stored received data while processing previously
received data . . . . ‘a more stable staging of the data so the microprocessor can
respond to that available data.’” Ex. 2008, 118:5–12. As Dr. Alexander
testifies, Petitioner is not proposing the particular buffer of Inoue but rather
any buffer “that was appropriate” may be applied. Ex. 2008, 119:2–22.
We are persuaded by Petitioner’s contention that, “a POSITA, noting
that Tang’s disclosure lacked detail of the configuration between its MCU and
external input device, would have looked to another reference for a
configuration,” wherein “Inoue disclose[s] such a configuration” (Pet. 31
(citing Ex. 1002 ¶ 95)), wherein Inoue proposes using a buffer for providing “a
more stable staging of data.” Ex. 2008, 118:5–12. Here, Petitioner contends
that a POSITA would have understood that a buffer as suggested in Inoue
would enhance efficiency of the combined device and would have predictably
improved the controller of Tang using the known buffer technique of Inoue to
provide the predictable result of bi-directional data communications. Pet. 30–
32 (citing Ex. 1002, ¶¶ 95–97). Petitioner’s rationale that a POSITA would
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have combined Tang and Inoue is supported by the preponderance of the
evidence.
On this record, Petitioner has demonstrated sufficiently that the
combination of Tang and Inoue teaches the “a communication controller for
buffering the data” recited in claim 1.
b3. “the first circuit configured to convert the data to an
analog audio signal”
Petitioner contends that Tang teaches “the first circuit configured to
convert the data to an analog audio signal.” Pet. 34–35. In particular,
Petitioner contends that, in Tang, “the MCU (first circuit) . . . converts
received analog or digital transaction data into an analog audio signal for
transmission to the mobile phone.” Id. at 34 (citing Ex. 1005 ¶¶ 14, 86, 90).
Petitioner contends that, in Tang, “after ‘the input device’—the credit card
reader—‘captures the card information, the controller converts the card
information into an audio signal that is transmitted via the communication
link.’” Id. (citing Ex. 1005 ¶ 14). Further, Petitioner contends that “Tang also
discloses that the ‘transaction data whether originally received in analog
format or in encrypted digital format is converted by the MCU 50 into an
analog audio signal.’” Id. at 34–35 (citing Ex. 1005 ¶ 86). According to
Petitioner, “Tang elaborates further, noting that ‘the binary digital signal,
whether originally received in analog format or in encrypted digital format is
compressed by the MCU 50 and converted into a hexadecimal signal,’ which is
‘then further compressed by the MCU 50 and converted into a dual-tone multi-
frequency (DTMF) audio signal.’” Id. at 35 (citing Ex. 1005 ¶ 90).
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Patent Owner contends that Petitioner is “implicitly” asserting that
“Tang’s MCU corresponds to the first circuit.” PO Resp. 64–65 (citing Pet.
34). However, according to Patent Owner, Petitioner also refers to Tang’s
MCU as Tang’s “controller” with respect to the “first mechanism element,”
wherein “Petitioner is indeed identifying the same element (Tang’s MCU) as
both the first mechanism and the first circuit.” Id. at 59.
Patent Owner’s contentions do not undermine Petitioner’s showing.
As discussed above in section II(E)(3)(b1), we are not persuaded by
Patent Owner’s contention that Petitioner cannot identify the same element
(Tang’s MCU) as both the “first mechanism” and the “first circuit” (PO Resp.
64–65; see also id. 59), because claim language does not prohibit the claimed
“first mechanism” and “first circuit” from being encompassed in a single
MCU. As discussed, the claim language itself suggests that the “first
mechanism” and the “first circuit” are comprised within a single “hardware
component,” and even the Specification of the ’706 patent discloses the first
mechanism and the first circuit as a unitary device formed as a single
microcontroller. See Ex. 1001, Fig. 1, 6:59–7:15. Nevertheless, the
combination of Tang and Inoue teaches the “first mechanism” and the “first
circuit” being separate elements, since Inoue itself discloses providing for
separate elements. See , e.g., Ex. 1007, Fig. 1.
On this record, Petitioner has demonstrated sufficiently that the
combination of Tang and Inoue teaches the “first circuit” recited in claim 1.
b4. “a connector to couple the hardware component to an
audio input port of the mobile device,” wherein “the
connector bridges a microphone pin of the audio input port
such that the mobile device detects a presence of the
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connector in the audio input port,” and “the connector
provides an audio communication between the hardware
component and the mobile device and communicates the
analog audio signal from the hardware component to the
mobile device”

Petitioner contends that the combination of Tang, Kinzalow, and Inoue
teaches “a connector to couple the hardware component to an audio input port
of the mobile device . . . .” Pet. 35–42. In particular, Petitioner contends
“Tang discloses a ‘communication assembly 16,’ shown in Figure 2 . . . ,
which ‘include[s] a portable transaction apparatus 12,’ . . . ‘in the form of a
point of sale (POS) device linked to a communication device in the form of
mobile phone 14 via a communication link in the form of a cable 30.’” Id.
(citing Ex. 1005 ¶ 80, Figs. 2, 3). Additionally, Petitioner contends that
“Kinzalow discloses a connector that bridges a microphone pin of a mobile
phone’s audio port such that the mobile device detects a presence of the
connector in the audio input port.” Id. at 36–39 (citing Ex. 1006, 7:46–62).
Petitioner also contends that “Tang discloses that the converted audio signal is
‘[s]uitable for transmission over the analog communication link between the
transaction device and the communication device.’” Id. at 42 (citing Ex. 1005
¶ 86).
Patent Owner does not separately address Petitioner’s contentions
regarding the “connector” of claim 1. See generally PO Resp. We have
reviewed Petitioner’s explanations and supporting evidence regarding these
limitations, and find them sufficient. Thus, Petitioner has demonstrated
persuasively that the combination of Tang, Kinzalow, and Inoue teaches “a
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connector to couple the hardware component to an audio input port of the
mobile device,” as claimed.
c. “second mechanism on the mobile device configured to
receive the analog audio signal and convert the analog
audio signal into binary data”
Petitioner contends that the combination of Tang, Kinzalow, and Inoue
teaches “a second mechanism on the mobile device configured to receive the
analog audio signal and convert the analog audio signal into binary signal.”
Pet. 42–43. In particular, Petitioner contends that Tang discloses an
embodiment in which “software application of controller 51 receives the
analog audio signal from the controller and converts the analog audio signal
into binary data.” Id. at 43 (citing Ex. 1005 ¶ 100 (“This software application
is used to convert between audio and digital signal and to receive and transmit
and [sic] audio data to and from the hands-free interface”)).
Petitioner references Tang’s Figures 7 and 8 to explain the embodiment
(“second embodiment”). See Pet. 45. Petitioner contends that, as shown in the
second embodiment set forth in Figures 7 and 8 reproduced below, Tang
discloses that “the ‘analog signal from the magnetic card’ is sent to a ‘software
application of the controller 51 [that] converts the received signal back to
binary data for example as stored on the magnetic card 34[sic].’” Id. at 43
(citing Ex. 1005, Figs 7, 8, ¶¶ 101–102; Ex. 1002 ¶ 113).
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Figure 7 of Tang discloses a “transaction/communication assembly,” and
Figure 8 of Tang discloses a “control system of the communication device of
the transaction/communication assembly” in a second exemplary embodiment.
Ex. 1005 ¶¶ 69–70.
According to Petitioner, “[t]he second mechanism in Tang is the
software application of controller 51, which Tang discloses in its embodiment
for Figures 7 and 8,” wherein “transaction apparatus 12’ . . . includes an input
device 38’ in the form of a slot 39’ for capturing information from a
transaction card 24 and sends this information to the mobile phone 14 via cable
30.” Pet. 45 (citing Ex. 1005, Figs. 7, 8, ¶¶ 99–100; Ex. 1002 ¶ 117).
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Petitioner contends that this second embodiment shown in Figures 7–8, similar
to Tang’s first embodiment shown in Figures 1–5, “transmit[s] the analog
audio signal in the same analog format through the same cable 30 and
connector 32 to the same mobile phone 14.” Id. at 46 (citing Ex. 1005, Figs.
1–5, ¶¶ 80–86, comparing Ex. 1005, Fig. 2, ¶ 86, with id., Fig. 7, ¶ 101).
Petitioner reasons that, “[b]ecause both embodiments use the same mobile
phone 14, a POSITA would have understood that the software application in
mobile phone 14 for the second embodiment [shown in Figures 7 and 8] could
be used in the same mobile phone 14 for the first embodiment [shown in
Figures 1–5].” Id. That is, according to Petitioner, a POSITA would have
understood that software application of the controller 51 in mobile phone 14
would convert the received audio signal back to binary data to upload data over
to transaction server 18 in both first and second embodiments. Id.; see also id.
at 43
Patent Owner responds that both first and second embodiments of Tang
“support transmission of an audio signal without extracting the information
carried by the signal, including by transmitting a digitized format of the
signal.” PO Resp. 77. According to Patent Owner, in Tang’s second
embodiment shown in Figure 7 and 8, “GPRS is used,” wherein “the audio
signal’s analog waveform is digitized and placed into GPRS packets.” Id.
However, according to Patent Owner, assuming arguendo that controller 51 of
Tang receives and processes analog audio signals coming from the direction of
card reader 38, “controller 51 cannot convert those signals into binary data” as
required by the claim, but instead “[c]ontroller 51 would merely digitize the
analog audio signals for transmission in GPRS packets to the transaction server
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18.” Id. at 80. In particular, Patent Owner contends that “controller 51 would
create a digital representation of the analog audio waveform without extracting
the binary data” and “binary data extraction occurs exclusively at the
transaction server 18.” Id. at 80 (emphasis omitted). Furthermore, even if
controller 51 were capable of converting analog audio signals associated with
card reader 38 into binary data for presentation on display screen 36’,
according to Patent Owner, “such conversion would not satisfy Claim 1”
because claim 1 recites “to upload the binary data to a cloud service for
decoding- not to display on the mobile device 14.” Id. at 80–81.
Patent Owner’s contentions do not undermine Petitioner’s showing.
Although Patent Owner contends that Tang “support[s] transmission of
an audio signal without extracting the information carried by the signal” (PO
Resp. 77), as Petitioner points out, in Tang, “software application of controller
51 receives the analog audio signal from the controller and converts the analog
audio signal into binary data.” Pet. 42–43 (citing Ex. 1005 ¶ 100). In
particular, Tang’s software application of controller 51 converts the received
signal back to binary data as stored on the transaction card. See Ex. 1005
¶ 100. We are persuaded by Petitioner’s contention that a POSITA would have
understood that software application of the controller 51 in mobile phone 14
would convert the received audio signal back to binary data to upload data over
to transaction server 18. Pet. 43, 46.
Thus, we are unpersuaded by Patent Owner’s contention that Tang’s
“controller 51 cannot convert [analog] signals into binary data,” “would merely
digitize the analog audio signals for transmission in GPRS packets to the
transaction server 18,” “would create a digital representation of the analog
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audio waveform without extracting the binary data,” wherein any conversion
of analog audio signals associated with card reader 38 into binary data is “for
presentation on display screen 36.” PO Resp. 80–81.
We also note Patent Owner merely provides conclusory statements that
Tang’s controller 51 cannot convert analog signals into binary data, without
presenting any factual evidentiary support. Mere attorney arguments and
conclusory statements that are unsupported by factual evidence are entitled to
little probative value. In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); see
also In re De Blauwe, 736 F.2d 699, 705 (Fed. Cir. 1984); and Ex parte
Belinne, No. 2009-004693, slip op. at 7-8 (BPAI Aug. 10, 2009) (informative),
available at http://www.uspto.gov/web/offices/dcom/bpai/its/fd09004693.pdf.
On this record, Petitioner has demonstrated sufficiently that the
combination of Tang and Inoue teaches the “second mechanism” recited in
claim 1.
d. “third mechanism on the mobile device configured to
upload the binary data to a cloud service for decoding”
Petitioner contends that the combination of Tang, Kinzalow, and Inoue
teaches “a third mechanism on the mobile device configured to upload the
binary data to a cloud service for decoding.” Pet. 47–51. According to
Petitioner, “[the] ’706 patent describes a ‘cloud service’ in the context of a
mobile device sending data through a network to a remote server.” Id. at 48
(citing Ex. 1001, 12:15–22 (“A ‘cloud service’ could decode the signals. That
is, the phone could be relatively ‘dumb’, and a device could be used to
communicate to the ‘cloud’ through a mobile phone. . . . The data would then
be uploaded without significant change to a server, where it would be
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decoded.”); Ex. 1002 ¶ 122). According to Petitioner, based on the intrinsic
evidence, including the prosecution history of the ’706 patent, “a POSITA
would have understood that the recited ‘cloud service for decoding’ refers to a
remote server to which a mobile device communicates through a network for
decoding.” Pet 49 (citing Ex 1002 ¶ 122).
Petitioner then contends “Tang[] discloses a transceiver (third
mechanism) on the mobile phone configured to upload the binary data, which
is in the form of GPRS data, over a communication network to a remote
processor assembly 22 (cloud service), a network of remote servers including a
transaction server 18 that decodes the received data.” Pet. 47–48 (citing
Ex. 1005, Fig. 1, ¶ 3). According to Petitioner, various paragraphs in Tang
describe the uploading of data by the “third mechanism” to a “cloud service for
decoding.” Id. at 51 (citing, e.g., Ex. 1005 ¶¶ 101–102 (“The transaction card
data, along with the transaction data, are encoded and sent to the transaction
server 18 [in the form of general-packet radio service] (GPRS) data. The
transaction server 18 decodes the transaction data, reformats and sends [this
data] to the processor/issuer 20 for approval”), ¶ 104).
Petitioner refers to Figure 1 of Tang, reproduced below, to explain:
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Figure 1 of Tang shows a transaction network that includes: a
transaction device and a communication device, forming transaction and
communication assembly; a communication network; and a transaction server
and a transaction processor/issuer, forming a remote processor assembly.
Ex. 1005 ¶ 79. According to Petitioner, as shown in Figure 1 of Tang,
“communication device 14 uploads data over communication network 26 to
remote processor assembly 22 that includes a transaction server 18.” Pet. 49
(citing Ex. 1005, Fig. 1, ¶ 3 (“[noting] Tang’s wireless device mobile phone
includes a transceiver for uploading data to remote computers”); Ex. 1002
¶ 123). Transaction server 18 then “decodes the received data.” Pet. 47–48.
In response, Patent Owner contends claim 1 “requires a third mechanism
on the mobile device configured to upload the binary data to a cloud service
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for decoding.” PO Resp. 81. Patent Owner explains that, “[w]ith the mobile
phone of the proposed combination [of Tang and Inoue] configured to send
binary data to a server that cannot even receive binary data, there is no third
mechanism configured to upload binary data to a cloud service for decoding.”
Id. at 81–82 (emphasis omitted). According to Patent Owner, in claim 1,
“audio signals are converted into binary data at the mobile device, and the
binary data is uploaded to a cloud service for decoding,” whereas in Tang,
“audio signals are sent to transaction server 18, and transaction server 18
converts the audio signals into digital signals.” Id. at 82.
Patent Owner then contends that, “[t]o the extent Tang’s server does any
decoding, it is limited to decoding audio signals in order to extract the binary
data from the audio signals,” wherein “Tang’s transaction server 18 converting
audio into binary data” does not satisfy the claim requirement. Id. 82–83.
Patent Owner contends, like the Provisional Application, Tang discloses
packet-level decoding, wherein “[t]he [Institution] Decision, however, advises
that such packet-level decoding is not the decoding that is required by Claim
1.” Id. at 83. According to Patent Owner, Petitioner’s expert, Dr. Alexander
opines that “Tang’s disclosure of the transaction server 18 receiving,
assembling, and formatting GPRS data . . . does not constitute the decoding” as
claimed. Id. at 83–84.
Patent Owner’s contentions do not undermine Petitioner’s showing.
Although Patent Owner contends that, in the combination of Tang and
Inoue, there is “no third mechanism configured to upload binary data to a
cloud service for decoding” (PO Resp. 81–82 (emphasis omitted)), we are
persuaded by Petitioner’s contention that, as shown in Figure 1 of Tang,
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“communication device 14 uploads data over communication network 26 to
remote processor assembly 22 that includes a transaction server 18” for
decoding. Pet. 48 (citing Ex. 1005, Fig. 1, ¶ 3). As Petitioner contends, Tang
discloses “a transceiver (third mechanism) on the mobile phone configured to
upload the binary data, which is in the form of GPRS data, over a
communication network to a remote processor assembly 22 (cloud service), a
network of remote servers including a transaction server 18 that decodes the
received data.” Id. at 47–48.
Although Patent Owner contends that, in Tang, “audio signals are sent to
transaction server 18” and not binary data (PO Resp. 82), in his declaration,
Dr. Alexander testifies that transmitting with binary data over communication
network 26 “is more secure than transmission of analog data,” wherein, in a
further embodiment, “Tang discloses the transmission of encoded GPRS data
to the transaction server 18.” Ex. 1002 ¶¶ 120–21 (citing Ex. 1005 ¶ 102).
Thus, Dr. Alexander testifies that a POSITA would have been motivated to
transmit binary data to transaction server 18. Id. We are persuaded that a
POSITA would have found it obvious to securely convert the analog audio
signal to binary data on mobile phone 14 (as disclosed in Tang’s first
embodiment), and then transfer such binary data to the transaction server 18
for decoding (as disclosed in Tang’s second embodiment). See Pet. 52;
Ex. 1002 ¶¶ 120–21.
We are not persuaded by Patent Owner’s contention that Tang’s server’s
decoding is “limited to decoding audio signals in order to extract the binary
data from the audio signals,” wherein, like the Provisional Application, this
decoding by Tang is merely packet-level decoding. Pet. 82–83. As
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Dr. Alexander testified in cross-examination by Patent Owner, a POSITA
would understand the claimed “decoding” step to encompass decoding “[t]he
name, the account number, expiration date, and . . . country codes and currency
codes. . . . that’s stored on the credit card.” Ex. 2008, 29:22–30:7. Although
Patent Owner points out that Dr. Alexander opined that “Tang’s disclosure of
the transaction server 18 receiving, assembling, and formatting GPRS data . . .
does not constitute the decoding” as claimed (PO Resp. 83–84), as Petitioner
points out, more than just the receiving, assembling, and formatting, Tang also
discloses decoding the data. Tr. 38. According to Dr. Alexander, decoding is
different from the TCP/IP protocol set forth in the Provisional Application,
where data is transferred in series of smaller TCP packets and reassembled at
the destination, i.e., “not decoding the data, [but] just taking the segments of
data and reassembling them into one block.” Ex. 2008, 39:12–40:2. As
Dr. Alexander testified regarding the TCP/IP protocol, “[r]eassembly in my
understanding would not be considered decoding to extract credit card
information such as name and account number.” Ex. 2008, 44:7–19.
Different from the Provisional Application, Tang discloses a transaction
server that decodes to recover the transaction card data and the payment
details, wherein the transaction data is reformatted and sent to a remote
processor/issuer, which then either approves or rejects the transaction. See
Ex. 1005 ¶ 98. That is, Tang is decoding the data to recover data, not just mere
depacketization of data. Id.
Based on these teachings by Tang, and the testimony of Dr. Alexander,
we are persuaded by Petitioner’s contention that Tang teaches uploading
binary data to a cloud service, wherein the data is decoded at the cloud service.
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Thus, Petitioner has demonstrated persuasively that the combination of Tang,
Kinzalow, and Inoue teaches the “third mechanism” recited in claim 1.
4. Dependent claim 4
Petitioner provides explanations and supporting evidence regarding the
limitations of dependent claim 4. See generally Pet. 53–55. In particular,
Petitioner provides explanation and evidence that Tang, Kinzalow, and Inoue,
teach all limitations of the claim. Id. Petitioner also provides explanation and
evidence why a skilled artisan would have combined Tang, Kinzalow, and
Inoue. Id. at 30–53.
Patent Owner does not address separately Petitioner’s showing as to
claim 4, but merely contends that “[f]or the same reasons Petitioner has failed
to set forth a prima facie showing that Claim 1 is obvious as described above,
Petitioner has also failed to set forth a prima facie showing that Claim 4 is
obvious.” See PO Resp. 84–85. We have reviewed Petitioner’s explanations
and supporting evidence regarding the limitations of claim 4, and we find them
persuasive. Thus, Petitioner has demonstrated persuasively that the
combination of Tang, Kinzalow, and Inoue teaches the limitations of
dependent claim 4.
5. Dependent claims 2 and 3
Petitioner provides explanations and supporting evidence regarding the
limitations of dependent claims 2 and 3. See generally Pet. 63–69. In
particular, Petitioner provides explanation and evidence that Tang, Kinzalow,
Inoue, and Cheon teach all limitations of these claims. Id. Petitioner also
provides explanation and evidence why a skilled artisan would have combined
Tang, Kinzalow, Inoue, and Cheon. Id.
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Patent Owner does not address separately Petitioner’s showing as to
these claims, but merely contends that “for the same reasons Petitioner has
failed to set forth a prima facie showing that Claim 1 is obvious, Petitioner has
failed to set forth a prima facie showing that Claims 2 and 3 are obvious.” See
PO Resp 86. We have reviewed Petitioner’s explanations and supporting
evidence regarding the limitations of claims 2 and 3, and we find them
persuasive. Thus, Petitioner has demonstrated persuasively that the
combination of Tang, Kinzalow, Inoue and Cheon teaches the limitations of
dependent claims 2 and 3.
F. Patent Owner’s Consent to PTAB adjudication.
Patent Owner contends that the inter partes review process is
unconstitutional because the judges of PTAB are not properly appointed under
“the Appointments Clause.” PO Resp. 86–87. In particular, Patent Owner
contends that “any decision the Panel issues that deems any claim of the ’706
Patent invalid is void as rendered by a Panel that was not constitutionally
appointed.” Id. (citing Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320,
1328 (Fed. Cir. 2019)).
We, decline to consider Patent Owner’s constitutional challenge as the
issue has been addressed by the Federal Circuit’s decision, which addressed
this issue. See Arthrex, 941 F.3d at 1337 (“This as-applied severance . . . cures
the constitutional violation.”).
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III. CONCLUSION6
For the foregoing reasons, we are persuaded on the record at hand that
Petitioner has demonstrated by a preponderance of the evidence that claims 1–
4 of the ’706 patent based on the grounds discussed above are unpatentable.
IV. ORDER
For the foregoing reasons, it is
ORDERED that, based on a preponderance of the evidence, claims 1–4
of U.S. Patent 9,800,706 B2 have been shown to be unpatentable;
FURTHER ORDERED that, because this is a final written decision,
parties to this proceeding seeking judicial review of our decision must comply
with the notice and service requirements of 37 C.F.R. § 90.2.

6 Should Patent Owner wish to pursue amendment of the challenged claims in
a reissue or reexamination proceeding subsequent to the issuance of this
decision, we draw Patent Owner’s attention to the April 2019 Notice
Regarding Options for Amendments by Patent Owner Through Reissue or
Reexamination During a Pending AIA Trial Proceeding. See 84 Fed. Reg.
16,654 (Apr. 22, 2019). If Patent Owner chooses to file a reissue application or
a request for reexamination of the challenged patent, we remind Patent Owner
of its continuing obligation to notify the Board of any such related matters in
updated mandatory notices. See 37 C.F.R. § 42.8(a)(3), (b)(2).
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In summary:

Claims 35 U.S.C.
§
Reference(s)/Basis Claims
Shown
Unpatentable
Claims Not
Shown
Unpatentable
1, 4 103 Tang, Kinzalow,
Inoue,
1, 4
2, 3 103 Tang, Kinzalow,
Inoue, Cheon
2, 3
Overall Outcome 1–4

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For PETITIONER:

Jessica L. A. Marks
Ashraf Fawzy
UNIFIED PATENTS INC.
jessica@unifiedpatents.com
afawzy@unifiedpatents.com

For PATENT OWNER:

Raymond W. Mort, III
THE MORT LAW FIRM, PLLC
raymort@gmail.com

Michael L. Wach
WACH LLC
mikewachsr@gmail.com