PTAB

CBM2016-00099

Twilio Inc. v. TeleSign Corporation

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1. Case Identification

2. Patent Overview

  • Title: REGISTRATION, VERIFICATION AND NOTIFICATION SYSTEM
  • Brief Description: The ’792 patent discloses a fraud prevention system for automating the process of notifying a verified user that a specific event has occurred and requiring the user to acknowledge that event. The invention is described as using standard computing components, web interfaces, and telephonic communications like SMS, with a particular focus on preventing fraud in financial transactions.

3. Grounds for Unpatentability

Ground 1: Obviousness over Bennett and Campbell - Claims 1-6, 8, 10-15, and 17 are obvious over Bennett in view of Campbell under 35 U.S.C. §103.

  • Prior Art Relied Upon: Bennett (Application # 2005/0273442) and Campbell (Application # 2006/0020816).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Bennett alone rendered most challenged claims obvious. Bennett was said to teach a two-factor authentication system where a user signs up for a service, provides a telephone number, and later receives a verification code via that number upon a predetermined event (e.g., a login from an unknown device). The user then acknowledges the event by entering the code into a web interface. Petitioner asserted that Campbell was added to supplement Bennett’s disclosure of a "notification event." Campbell taught notifying users of account events, such as an account suspension after multiple failed logon attempts, via an explicit SMS message that directed the user to contact a service provider to acknowledge and resolve the issue.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSA) would combine Campbell's explicit, word-based notifications with Bennett's code-based system to provide better customer service and clearer information about why a verification code was sent. Petitioner contended that because both references address the same high-risk transaction problem using similar SMS-based solutions, the combination represented a simple and predictable path to an improved, more user-friendly system.
    • Expectation of Success: A POSA would have had a high expectation of success in making this combination. The argument was that merging two known forms of SMS notification—one for delivering codes and another for text-based alerts—into a single message was a trivial and well-understood technical task with predictable results.

Ground 2: Unpatentable as Abstract Idea - Claims 1-18 are unpatentable under 35 U.S.C. §101.

  • Prior Art Relied Upon: N/A (This ground relied on the legal framework from Alice Corp. v. CLS Bank).
  • Core Argument for this Ground:
    • Prior Art Mapping (Alice Step 1): Petitioner argued the claims were directed to the abstract idea of "obtaining from a verified user an acknowledgement of an action associated with a specified event." This was characterized as a fundamental, longstanding commercial practice, analogous to a bank calling a customer to confirm a suspicious credit card transaction. The patent claims merely automated this basic human activity.
    • Motivation to Combine (Alice Step 2): Petitioner contended the claims lacked an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The implementation of the abstract idea used only generic and conventional technologies, such as a computer, a web interface, and SMS messaging, for their ordinary and intended purposes. It was argued that merely automating a known human process for speed and efficiency, without an improvement to computer functionality itself, does not provide the "something more" required for patent eligibility under the Alice framework.

4. Key Claim Construction Positions

  • Petitioner’s arguments centered on the construction of the term "notification event".
  • Petitioner acknowledged a prior Board construction from a related case: "an event that results in the registrant being notified that the event occurred."
  • Petitioner stated it could agree with this construction, provided that the act of "sending a verification code" qualifies as a form of notification. However, if the Board were to adopt a narrower construction requiring a more explicit, word-based message stating that the event occurred, Petitioner contended that such a construction would be improperly narrow and unsupported by the specification. Petitioner maintained that the claims were unpatentable under either construction.

5. Key Technical Contentions (Beyond Claim Construction)

  • A central technical contention was the correct priority date of the '792 patent.
  • Petitioner argued that the '792 patent was not entitled to the January 11, 2005 priority date of its earliest parent, the '421 application. The argument was that the '421 application lacked written description support for the key claim limitation of a "notification event" that occurs after the initial user registration is complete.
  • Petitioner asserted that this concept was first introduced in a subsequent application filed on October 5, 2006, which should be considered the correct priority date. This distinction was critical to the case, as it determined whether the primary prior art references were valid under §102(a) or §102(e) for the purposes of the CBM proceeding.

6. Arguments Regarding Discretionary Denial

  • Petitioner argued against discretionary denial under §325(d), asserting that the grounds presented were not duplicative of issues reviewed during the original prosecution.
  • It was argued that the specific prior art combination of Bennett in view of Campbell was never cited by the examiner in a rejection.
  • Furthermore, the §101 abstract idea challenge was never raised during prosecution, making both grounds novel to the CBM proceeding and thus appropriate for institution.

7. Relief Requested

  • Petitioner requested the institution of a Covered Business Method (CBM) patent review and the cancellation of claims 1-18 of the '792 patent as unpatentable.