PTAB

IPR2019-00884

PayPal Inc v. IOEngine LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Apparatus, Method and System for a Tunneling Client Access Point
  • Brief Description: The ’047 patent describes a portable "tunneling client access point" (TCAP), such as a USB device, that connects to a host computer ("access terminal"). The TCAP uses the host computer's peripherals and network connection to access remote servers, effectively "tunneling" data through the host without requiring its own complex input/output components.

3. Grounds for Unpatentability

Ground 1: Claims 1-9, 13-16, 18-19, and 21-31 are obvious over Abbott in view of Shmueli.

  • Prior Art Relied Upon: Abbott (Patent 7,272,723) and Shmueli (Application # 2002/0147912).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Abbott disclosed the core invention: a "compact, self-contained, personal key" (a USB device) with its own processor and memory used for secure, authenticated access to remote servers over a network like a VPN. Petitioner argued Shmueli complemented this by disclosing a similar portable USB device designed to provide user convenience and a customized computing environment across different host computers. Shmueli’s device stores user data like web bookmarks and passwords and contains software ("keylets") that can automatically execute on the host to configure applications, such as launching a web browser with the user's preferred settings or automatically filling in login credentials. Petitioner contended that combining Abbott's secure hardware platform with Shmueli's user-centric software features rendered the challenged claims obvious.
    • Motivation to Combine: A POSITA would combine Abbott and Shmueli to gain the complementary benefits of both systems. Key motivations included: (1) enhancing Abbott's secure device with Shmueli's convenience features (e.g., auto-login, bookmarks) for a superior user experience; (2) using Abbott's onboard processor to provide more powerful processing for Shmueli’s software keylets; (3) integrating Shmueli’s browser toolbar shortcuts with Abbott’s secure document access system for one-click access to secure files; (4) leveraging the use of platform-independent Java in both references to easily create a portable application that works on a wide variety of platforms; and (5) improving the security of Shmueli's system by adopting Abbott's authentication method where the user's PIN never leaves the trusted portable device.
    • Expectation of Success: A POSITA would have a high expectation of success. Both references disclosed compact, USB-compatible portable devices with similar form factors, components, and communication interfaces. Both targeted common computing environments (e.g., Windows hosts), and Shmueli explicitly described using the Windows "autorun" capability, which a POSITA would expect to work on the Windows host disclosed in Abbott.

Ground 2: Claims 12 and 20 are obvious over Abbott in view of Shmueli and Brockmann.

  • Prior Art Relied Upon: Abbott (Patent 7,272,723), Shmueli (Application # 2002/0147912), and Brockmann (Patent 6,487,657).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground specifically targeted claims 12 and 20, which required the communications network to be a "wireless local area network" (WLAN). Petitioner argued that while the primary combination of Abbott and Shmueli taught using a local area network (LAN) to connect to a remote server, neither explicitly described a wireless LAN. Brockmann was introduced to supply this missing element, as it expressly related to a "data communication network" comprising a "substantially wireless LAN."
    • Motivation to Combine: A POSITA, seeking to implement the LAN taught by the Abbott/Shmueli combination, would be motivated to use a wireless LAN for its well-known benefits. Brockmann taught these exact advantages, stating that wireless LANs provide "a great degree of flexibility, mobility, and...lower the otherwise necessary costs for infrastructure and control." These known advantages would have motivated a POSITA to use a wireless LAN, as taught by Brockmann, to implement the network connection in the combined Abbott/Shmueli system.
    • Expectation of Success: The expectation of success would be high, as Brockmann itself stated that wireless LANs had "been known in practice for years," making their implementation a routine matter for a POSITA.

4. Key Claim Construction Positions

  • "[first/second/third] program code": Petitioner argued that these terms should not be construed to require separate and distinct software files or modules. Instead, they should be understood as mere shorthand for referring to different functions performed by program code. Petitioner asserted that a POSITA would understand that a single executable file, source code file, or software module could be written to perform more than one of the recited functions, and treating them as mutually exclusive would ignore the realities of how software is written and executed.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that its petition should not be denied based on other proceedings. It distinguished its petition from a concurrent inter partes review (IPR) filed by Ingenico Inc. against the same patent, noting that the Ingenico IPR relied on "completely different technological art" (digital cameras vs. USB devices), challenged a different subset of claims, and was prepared by different counsel and experts. Petitioner also asserted that the co-pending district court litigation was in its early stages, with a Markman hearing still five months away and trial not scheduled for more than a year, justifying the Board's review.

6. Relief Requested

  • Petitioner requested the institution of an IPR and the cancellation of claims 1-9, 12-16, and 18-31 of the ’047 patent as unpatentable.