Square Inc v. Think Computer Corp

1. Case Identification

• Case #: CBM2014-00159
• Patent #: 8,396,808
• Filed: July 21, 2014
• Petitioner(s): Square, Inc.
• Patent Owner(s): Think Computer Corporation
• Challenged Claims: 1-11, 13-17, and 19-22

2. Patent Overview

• Title: Method and System for Transferring an Electronic Payment
• Brief Description: The ’808 patent describes an electronic payment system that facilitates transactions between purchasers and merchants. Key purported features include "bi-directional" user accounts that can function as either a purchaser or merchant account in a given transaction and the storage of the merchant's product catalog within the payment system itself, rather than at the merchant's physical location.

3. Grounds for Unpatentability

Ground 1: Obviousness over Bemmel/Dalzell - Claims 1-3, 5-7, 17, and 20-22 are obvious over Bemmel in view of Dalzell.

• Prior Art Relied Upon: Bemmel (Application # 2008/0046366) and Dalzell (Application # 2003/0204447).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Bemmel disclosed the fundamental architecture and transaction flow of a mobile payment system, including using a mobile device (purchaser terminal) at a point-of-sale (merchant terminal) to interact with a remote payment server. However, Petitioner contended that Bemmel lacked two key features the patentee relied upon during prosecution. Dalzell allegedly supplied these missing elements by teaching an electronic marketplace with (1) bi-directional accounts where users can both buy and sell from a single account, and (2) a remotely hosted product catalog stored on the marketplace's central server system, which purchasers browse to select items.
  • Motivation to Combine: Petitioner asserted a person of ordinary skill in the art (POSITA) would combine these references to improve functionality. Dalzell explicitly suggested its marketplace could be used on mobile devices and in-store kiosks, providing a reason to integrate its features into a mobile-centric system like Bemmel. Conversely, Bemmel suggested its authentication system could be used in e-commerce architectures like Dalzell. The combination was presented as a commonsense amalgamation of a known mobile authentication method with a known robust e-commerce backend.
  • Expectation of Success: A POSITA would have had a reasonable expectation of success in combining the systems to yield the predictable result of an improved, more versatile mobile payment platform with a richer, centrally managed product catalog.

Ground 2: Obviousness over Tumminaro/Ogilvy/Ondrus - Claims 1, 2, 6-10, 13, 14, and 19-22 are obvious over Tumminaro in view of Ogilvy and Ondrus.

• Prior Art Relied Upon: Tumminaro (Application # 2007/0255652), Ogilvy (WO 2006/000021), and Ondrus (a 2004 conference paper).

• Core Argument for this Ground:

  • Prior Art Mapping: Petitioner presented this as an alternative combination showing that the claimed invention was an obvious amalgamation of features known in existing end-to-end mobile commerce platforms. Petitioner argued Tumminaro disclosed a mobile person-to-person payment system that taught the core transaction flow and the use of bi-directional accounts for sending and receiving money. Ogilvy was cited for disclosing a transaction processing system with a product catalog ("shopping database") stored on the central system server, not the merchant's terminal. Finally, Ondrus was added to teach the specific user identity confirmation steps, alleging it disclosed sending a picture of the purchaser from the payment system to the merchant terminal for visual verification.
  • Motivation to Combine: Petitioner argued that a POSITA would have been motivated to combine these complementary features from similar mobile commerce systems. Adding Ogilvy's robust, server-side product catalog and Ondrus's image-based identity verification to Tumminaro's peer-to-peer payment framework would have been a predictable modification to create a more feature-complete and secure mobile commerce system.
  • Expectation of Success: Combining these known, compatible features from the same technical field would have yielded expanded usability and security with a high expectation of success.

• Additional Grounds: Petitioner asserted numerous additional obviousness challenges that built upon these two primary combinations. For the Bemmel/Dalzell combination, Petitioner added tertiary references to address dependent claims, such as Carlson (for location-based catalog navigation), Tripp (for tipping and bill-splitting), and Elston (for post-purchase tip adjustment). Similar tertiary references were added to the Tumminaro/Ogilvy/Ondrus combination to challenge the same dependent claims.

4. Key Claim Construction Positions

• (Role of a) merchant account / (role of a) purchaser account: Petitioner argued this phrase, central to the "bi-directional" feature, should be construed based on the prosecution history to mean that a single user account (not just a person) is adapted to selectively function to either send or receive money depending on the specific transaction.
• User ID Token: Construed as an "encoded value that includes information identifying a user, which can be a barcode." This construction was based on examples in the specification and intended to be broad enough to cover various forms of user identifiers.
• Identity Confirmation Information: Construed as "any information suitable to verify the identity of a purchaser." This broad construction was argued to encompass passwords, images, or other data sent from the payment system to the merchant terminal for verification.

5. Arguments Regarding Discretionary Denial

• As this was a Petition for Covered Business Method (CBM) Patent Review, Petitioner argued at length why the ’808 patent qualifies as a CBM patent that is not a "technological invention," a threshold requirement for CBM review. Petitioner contended the patent claims financial activities and methods of practicing business. It argued the claims fail to recite a technological feature because they only invoke generic, well-known technologies (e.g., servers, terminals, networks) without providing any novel or non-obvious technical solution to a technical problem.

6. Relief Requested

• Petitioner requested institution of a CBM review and cancellation of claims 1-11, 13-17, and 19-22 of the ’808 patent as unpatentable.