Twilio Inc v. TeleSign Corp

1. Case Identification

• Case #: IPR2016-01688
• Patent #: 9,300,792
• Filed: August 29, 2016
• Petitioner(s): Twilio, Inc.
• Patent Owner(s): Telesign Corporation
• Challenged Claims: 1-6, 8, 10-15, 17

2. Patent Overview

• Title: Registration, Verification and Notification System
• Brief Description: The ’792 patent describes a fraud prevention method where a system registers and verifies a user's telephone number. Subsequently, upon detecting a predefined "notification event" (e.g., a suspicious transaction), the system sends a message to the verified number and requires the user to acknowledge the event to confirm its legitimacy.

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.

• Prior Art Relied Upon: Bennett (Patent 8,781,975) and Campbell (Application # 2006/0020816).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that Bennett taught nearly all limitations of the challenged claims. Bennett disclosed a two-factor authentication system that verifies a user’s phone number during registration (e.g., via SMS with a code) and stores it. Post-registration, Bennett’s system used pre-set “decision rules” to identify triggering events, such as a login from a new device, and would then send a new completion code via SMS to the verified number, requiring the user to enter the code as an acknowledgment. Petitioner argued that to the extent Bennett’s sending of a code was not an explicit notification, Campbell supplied this element. Campbell taught a fraud prevention system that, upon detecting an event like multiple failed logins, automatically sent a word-based SMS message explicitly stating the account was suspended and instructing the user to contact the provider for acknowledgment.
  • Motivation to Combine: A POSITA would combine Campbell’s explicit, word-based notification message with Bennett’s code-based verification message to provide better customer service and instill user confidence. Both references addressed the same problem of fraud prevention using SMS notifications for high-risk events. Therefore, adding a clear descriptive sentence to Bennett’s existing SMS message would have been a simple, predictable modification to improve its functionality.
  • Expectation of Success: A POSITA would have a high expectation of success, as combining the teachings required only adding a sentence of text to an SMS message, a trivial and well-understood task.

Ground 2: Obviousness over Bennett and Geddes - Claims 1-6, 8, 10-15, and 17 are obvious over Bennett in view of Geddes.

• Prior Art Relied Upon: Bennett (Patent 8,781,975) and Geddes (Patent 7,142,840).
• Core Argument for this Ground: Petitioner presented this ground as an alternative to Ground 1, asserting it applied regardless of the ’792 patent’s effective priority date, as Geddes qualified as prior art under 35 U.S.C. §102(e).
  • Prior Art Mapping: The argument largely mirrored Ground 1, with Bennett providing the foundational system for two-factor authentication and event-triggered re-verification. Geddes was used to supply the element of an explicit notification message. Geddes taught an out-of-band authentication system where, upon a user attempting to access a restricted service, the system transmitted an SMS message to a trusted number. This message explicitly identified the triggering event (e.g., “Access requested by jsmith to service.net”) and included a request to send a confirmation code to verify.
  • Motivation to Combine: A POSITA would combine Geddes’s practice of sending an informative message with Bennett’s system to enhance usability and security. Informing the user of the specific reason for receiving a verification code would be a logical improvement. Since both systems aimed to verify user actions via a secondary channel, the combination was a predictable application of known techniques to achieve an improved result.
  • Expectation of Success: A POSITA would have reasonably expected success in modifying Bennett’s system to include the informative text taught by Geddes, as it was a simple addition of text to a standard SMS communication.

4. Key Claim Construction Positions

• "notification event": Petitioner argued this term was central to the patentability analysis. It contended that under the broadest reasonable interpretation, the act of sending a verification code in response to a triggering event (as taught by Bennett) inherently served as notification of that event. However, Petitioner also argued that even if the Board adopted a narrower construction requiring a more explicit textual notification (as it had in a related IPR), the proposed combinations with Campbell or Geddes would still render the claims obvious, as those references explicitly taught such messages.

5. Key Technical Contentions (Beyond Claim Construction)

• Priority Date Entitlement: A crucial contention was that the ’792 patent was not entitled to a priority date earlier than October 5, 2006. Petitioner argued that the parent ’421 application, filed January 11, 2005, lacked written description for the key limitation of a "notification event" that occurs after the initial user registration and verification process is complete. This argument was foundational to establishing that Campbell, published in January 2006, was available as prior art under 35 U.S.C. §102(a).

6. Relief Requested

• Petitioner requested the institution of an inter partes review and the cancellation of claims 1-6, 8, 10-15, and 17 of the ’792 patent as unpatentable.