Visa Inc v. Stambler Leon

1. Case Identification

• Case #: IPR2014-00694
• Patent #: 5,793,302
• Filed: April 25, 2014
• Petitioner(s): Visa Inc.
• Patent Owner(s): Leon Stambler
• Challenged Claims: 51, 53, 55, 56

2. Patent Overview

• Title: Method for Securing Information Relevant to a Transaction
• Brief Description: The ’302 patent discloses methods for securing transactions by using a "variable authentication number" (VAN). The VAN is generated by coding information associated with a party, which is stored in a "credential," to authenticate the party or the communication itself.

3. Grounds for Unpatentability

Ground 1: Anticipation of Claims 51, 53, and 55 under 35 U.S.C. §102 by Davies

• Prior Art Relied Upon: Davies (D. W. Davies et al., Security for Computer Networks, 1989)
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Davies disclosed every element of claims 51, 53, and 55. Davies described secure electronic funds transfer systems, including point-of-sale payments using an electronic check. This system performed the claimed method of authenticating a fund transfer by:
    • Receiving funds transfer information (payer identity, payee identity, amount).
    • Using a "credential" previously issued by a trusted party (a digital certificate containing a public key, issued by a key registry).
    • Generating a VAN (a digital signature created using a secret key) based on the transfer information.
    • Verifying the authenticity of the transfer information using the VAN and the credential information (the public key).
    • Transferring funds only if the VAN and information are determined to be authentic.
  • Key Aspects: Petitioner contended that Davies's disclosure of a digital signature on an electronic check qualified as the claimed VAN, and the public key certificate issued by a trusted key registry constituted the claimed "credential." The process of signing transaction data and then verifying that signature before approving payment was argued to read directly on the limitations of the challenged claims.

Ground 2: Obviousness of Claims 51, 53, and 55 under 35 U.S.C. §103 over Davies in view of Nechvatal

• Prior Art Relied Upon: Davies (a 1989 publication) and Nechvatal (James Nechvatal, Public-key Cryptography, NIST Special Publication 800-2, Apr. 1991).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground asserted that even if Davies did not explicitly disclose generating the VAN from an "error detection code" (EDC) as required by claim 55, the combination with Nechvatal rendered this limitation obvious. Davies taught generating digital signatures (the VAN) for transaction authentication. Nechvatal taught that hash functions are a type of EDC used as a standard intermediate step in creating digital signatures to condense a message into a fixed-size representation before signing. Petitioner argued that applying Nechvatal's hashing method to the transaction data in Davies before signing it would result in the claimed invention.
  • Motivation to Combine: A POSITA would combine Davies with Nechvatal to improve the efficiency and security of the digital signature process. Nechvatal explicitly explained that using hash functions mitigates data expansion, reduces computational load, and lowers bandwidth requirements—all well-known benefits that would have motivated a skilled artisan to apply this standard technique to the electronic payment system described in Davies.
  • Expectation of Success: The combination involved applying a well-understood cryptographic primitive (hashing) for its intended and known purpose, leading to a high expectation of success in producing a more efficient and predictable result.

Ground 3: Obviousness of Claim 56 under 35 U.S.C. §103 over Davies in view of Fischer and Piosenka

• Prior Art Relied Upon: Davies (a 1989 publication), Fischer (Patent 4,868,877), and Piosenka (Patent 4,993,068).
• Core Argument for this Ground:
  • Prior Art Mapping: Claim 56 adds limitations for further securing the transfer, including using a second VAN (VAN1) to secure the credential information itself and denying the transfer if the credential cannot be authenticated using VAN1. Petitioner argued this was obvious over the combination. Davies taught authenticating a transaction message with a first VAN. Fischer taught a hierarchical signature verification procedure where a credential's authenticity is itself verified by checking a signature on it (VAN1) from a higher authority before the credential is used. Piosenka explicitly taught denying a request for access or a transaction if a signature verification fails.
  • Motivation to Combine: A POSITA would combine these references to create a more robust, end-to-end secure transaction system. A POSITA would augment Davies's system with Fischer's method for verifying the credential itself to establish a chain of trust, a known way to increase security. To complete the system, a POSITA would incorporate Piosenka's explicit teaching to deny the transaction upon a verification failure, which is the logical and necessary outcome in any secure authentication process.
  • Expectation of Success: Combining these references involved integrating known security features for their predictable purposes: hierarchical certificate validation for enhanced trust and transaction denial upon authentication failure. A POSITA would have had a high expectation of success in creating a more secure version of Davies's system.

4. Key Claim Construction Positions

• "Variable Authentication Number (VAN)": Petitioner proposed construing VAN as "a variable number resulting from a coding operation that can be used in verifying the identity of a party or the integrity of information or both." This construction was broad enough to encompass digital signatures as taught in the prior art, which was central to mapping the prior art to the claims.
• "Credential": Petitioner proposed construing "credential" as "a document or information obtained from a trusted source that is transferred or presented to establish the identity of a party." This construction allowed Petitioner to identify public key certificates issued by a trusted authority, as described in Davies, as the claimed credential.
• "Error Detection Code (EDC)": Petitioner proposed construing EDC as "the result of applying an algorithm for coding information that...creates coded information wherein changes to the coded information can be detected without complete recovery of the original information." This construction was argued to encompass cryptographic hash functions, as taught by Nechvatal, which was critical for the obviousness argument in Ground 2.

5. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 51, 53, 55, and 56 of the ’302 patent as unpatentable.