Twilio Inc v. TeleSign Corp

1. Case Identification

• Case #: IPR2016-00451
• Patent #: 8,687,038
• Filed: January 11, 2016
• Petitioner(s): Twilio Inc.
• Patent Owner(s): Telesign Corporation
• Challenged Claims: 1-22

2. Patent Overview

• Title: Registration, Verification and Notification System
• Brief Description: The ’038 discloses a telephone-based two-factor authentication system. The system performs an initial verification of a user's electronic contact address (e.g., phone number) during registration and subsequently performs a re-verification of that same address upon the occurrence of a pre-established "notification event."

3. Grounds for Unpatentability

Ground 1: Claims 1-22 are obvious over Bennett

• Prior Art Relied Upon: Bennett (Patent 8,781,975).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Bennett, which was not cited during prosecution, discloses all elements of the challenged claims. Bennett teaches an authentication system that performs two-factor authentication at registration and repeats the process upon the occurrence of notification events. Specifically, Bennett was alleged to disclose receiving a user’s phone number via a website (claim 1[a]), performing an initial verification by sending a code via a telephonic connection and having the user enter it on the website (claim 1[b]), establishing notification events like logging in from a new device (claim 1[c]), and re-verifying the user by repeating the same telephonic code process upon detecting such an event (claims 1[d]-[e]).
  • Key Aspects: Petitioner contended that Bennett's "decision-making module" with its rule-based database for determining when to require subsequent authentication directly corresponds to the ’038 patent’s system for establishing and detecting notification events.

Ground 2: Claims 1-22 are obvious over Bennett in view of Thoursie

• Prior Art Relied Upon: Bennett (Patent 8,781,975) and Thoursie (Patent 8,302,175).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground was presented as an alternative in case Bennett alone was found insufficient to teach the re-verification steps. Petitioner asserted that Thoursie explicitly discloses an authentication system that performs an initial verification and then stores the user's phone number for future authentications. Upon a subsequent event, such as an attempt to access the account, Thoursie "then called on the telephone number associated with the account" to provide a new verification code. Petitioner argued Thoursie's clear teaching of re-verification using a stored phone number renders the re-verification steps of claims 1 and 13 obvious.
  • Motivation to Combine: A POSITA would combine Bennett’s comprehensive authentication framework with Thoursie’s explicit re-verification process to enhance security. Because Bennett already taught using a telephone number for an initial verification, it would have been a simple and predictable modification to use Thoursie's method of re-using that same verified channel for subsequent authentications, improving security with minimal effort.
  • Expectation of Success: A POSITA would expect this combination to work predictably, as it involves using a known verification technique (out-of-band telephone call) in a known context (re-authenticating a user upon a trigger event) to achieve the predictable result of enhanced security.

Ground 3: Claims 6, 11, 17, and 21 are obvious over Bennett and Thoursie in view of Rolfe

• Prior Art Relied Upon: Bennett (Patent 8,781,975), Thoursie (Patent 8,302,175), and Rolfe (Application # 2003/0221125).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground specifically addressed dependent claims related to user-established notification events (claims 6, 17) and notifying the user of the event's occurrence during re-verification (claims 11, 21). Petitioner argued Rolfe teaches a system where a user can establish rules for when they wish to be notified of transactions, such as a high-value credit card purchase. When such a transaction occurs, Rolfe’s system calls the user to inform them of the specific transaction and seek authorization.
  • Motivation to Combine: A POSITA would be motivated to incorporate Rolfe’s user-defined notification triggers into the Bennett/Thoursie system to improve user experience and security. Allowing users to control when re-verification is triggered would reduce the annoyance of excessive authentication requests, a problem mentioned in Bennett. Combining Rolfe’s method of explicitly notifying the user of the triggering event (e.g., "You have requested a telephone call to approve any high value transaction...") with the re-verification process would provide context and enhance security by alerting a user to potentially fraudulent activity they did not initiate.
  • Expectation of Success: The combination was asserted to be a simple integration of known features. A POSITA would have found it a simple design choice to add a user-facing configuration menu (as suggested by Rolfe) to the administrative back-end already disclosed by Bennett, with a high expectation of success.

• Additional Grounds: Petitioner asserted an additional obviousness challenge for claims 6, 11, 17, and 21 based on Bennett in view of Rolfe, which relied on the same motivation to combine as Ground 3.

4. Key Claim Construction Positions

• "notification event": Petitioner proposed the broadest reasonable interpretation is "an event that results in the user being contacted either for re-verification or for notification that the event occurred." This broad construction was argued to be supported by the specification’s varied examples (e.g., ATM transactions, account access requests, news events) and statements made during prosecution of the parent ’920.

5. Key Technical Contentions (Beyond Claim Construction)

• Priority Date Entitlement: A central contention was that the ’038 patent was not entitled to the January 11, 2005 priority date of its grandparent (’421). Petitioner argued the ’421 application lacked written description support for the key claim terms "notification event" and "re-verification." Therefore, Petitioner asserted the correct priority date was October 5, 2006 (the filing date of the parent ’920 patent), which would qualify Bennett (filed May 23, 2005) as prior art under 35 U.S.C. §102(e).

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-22 of the ’038 patent as unpatentable.