Askeladden LLC v. Purple Leaf

1. Case Identification

• Case #: IPR2016-01720
• Patent #: 8,527,407
• Filed: September 2, 2016
• Petitioner(s): Askeladden LLC
• Patent Owner(s): Purple Leaf, LLC
• Challenged Claims: 1-11

2. Patent Overview

• Title: Method and Apparatus for Conducting a Transaction
• Brief Description: The ’407 patent discloses methods for conducting electronic transactions initiated via a wireless computing device. The invention centers on sending a payment instruction to the wireless device, which then initiates the payment using remittance information arranged within a computer-readable data structure.

3. Grounds for Unpatentability

Ground 1: Anticipation - Claims 1, 3, and 6-9 are anticipated by Takayama.

• Prior Art Relied Upon: Takayama (European Application # 950968 A1).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Takayama discloses every limitation of independent claim 1. Takayama described a transaction system using a "mobile user terminal" (a wireless device) that communicates with a merchant terminal via infrared. Petitioner asserted that Takayama teaches receiving a payor's authorization in the form of a "payment offer message," sending a "payment offer response" to the wireless device as a payment instruction, and initiating payment by transmitting a "payment request message" to a service provider. This payment request message allegedly constitutes payment remittance information arranged in a computer-readable data structure that is delivered via the wireless device. Petitioner further argued that Takayama discloses the limitations of dependent claims, including the wireless device being a cellular telephone (claim 3) and the remittance information comprising the payor's account via a credit card service code (claim 6).

Ground 2: Obviousness - Claims 10 and 11 are obvious over Takayama in view of Rolf.

• Prior Art Relied Upon: Takayama (European Application # 950968 A1) and Rolf (Patent 7,376,583).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Takayama discloses most limitations of independent claim 10, including accepting a payment instruction from a payor, communicating it to initiate payment, routing the paid amount, and storing a receipt in memory. Specifically, Takayama’s service provider generates a "receipt message" and transmits it to the user’s cellular phone for storage. However, Petitioner contended that Takayama only discloses presenting a simple "clearing completion notification" to the payee (merchant), not the full receipt. Rolf was cited to cure this deficiency, as it teaches a point-of-sale system where, after a transaction, detailed "information relating to the sale just made" is displayed to the merchant payee. The combination allegedly renders claim 10's limitation of "presenting the receipt to the payee" obvious. Claim 11's requirement of communicating with an intermediary was argued to be met by Takayama’s "service providing system."
  • Motivation to Combine: A POSITA would combine Takayama's system with Rolf's teaching on receipt presentation to provide the payee with immediate, detailed transaction information for verification and record-keeping, a known and commercially desirable feature for point-of-sale systems.
  • Expectation of Success: The proposed modification involved applying a conventional display technique from Rolf to the established mobile payment framework of Takayama, which would have been a straightforward integration with a high expectation of success.

Ground 3: Obviousness - Claim 4 is obvious over Takayama, Hughes, and Kitchen.

• Prior Art Relied Upon: Takayama (European Application # 950968 A1), Hughes (Patent 5,754,655), and Kitchen (Patent 6,289,322).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground targets dependent claim 4, which adds the limitation that the payment remittance information comprises a "minimum acceptable payment." Petitioner argued that Takayama provides the foundational merchant payment system. Hughes was cited for teaching the adaptation of such a wireless payment system to perform both purchase payments and bill payment transactions, disclosing parallel processes for each. Kitchen was then introduced for its specific disclosure of an electronic bill payment method using a mobile phone, wherein a payor can select an option to pay the "minimum amount due," which generates an instruction containing this minimum payment information.
  • Motivation to Combine: A POSITA would have been motivated to first combine Takayama and Hughes to create a more versatile payment device, adding the convenience of bill payment functionality. To further enhance this feature, a POSITA would incorporate the common and convenient option of paying a minimum amount, as taught by Kitchen. This would provide users with greater flexibility in managing bill obligations, a clear and recognized benefit.
  • Expectation of Success: Integrating these known financial transaction features—bill pay functionality and minimum payment options—into a mobile payment system was well within the ordinary skill in the art and presented no significant technical obstacles.

• Additional Grounds: Petitioner asserted additional obviousness challenges, including for claim 2 over Takayama and Neuman (to add a payor's first name to remittance data) and for claim 5 over Takayama, Hughes, and Vazvan (to add a payment due date for bill payments), relying on similar design modification theories to enhance system functionality.

4. Key Claim Construction Positions

• Petitioner proposed a construction for the term "receipt" that was consistent with a prior Board construction in a related Covered Business Method (CBM) patent review.
• The proposed construction asserted that "receipt" should encompass both (1) an acknowledgement that payment was received, and (2) a request for payment. This broad interpretation was critical to Petitioner's arguments, as it allowed various messages and data structures described in the prior art to satisfy the "receipt" limitations of the challenged claims.

5. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-11 of Patent 8,527,407 as unpatentable.