PTAB

IPR2019-00930

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 ’703 patent describes a portable device, termed a "tunneling client access point (TCAP)," such as a USB drive, that connects to a terminal (e.g., a laptop) to provide secure, network-based services. The system uses various software modules on both the portable device and the terminal to manage communications and user interactions.

3. Grounds for Unpatentability

Ground 1: Obviousness over Abbott and Shmueli - Claims 55-65, 67-72, 74-75, 77-79, 81-87, 89-90, 92-98, 100-101, 103-114, 116-121, 123-124, and 126-129 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 argued that Abbott discloses a "compact, self-contained, personal key" (a USB device) with a processor and memory used to establish secure network connections like a Virtual Private Network (VPN) with a host computer. Shmueli discloses a similar portable USB device that interacts with host computers to provide a customized user environment, such as portable bookmarks and password management, and can automatically launch software on the host. Petitioner contended that the combination of Abbott's secure portable device architecture with Shmueli's user customization and convenience features taught all limitations of the challenged claims, including a portable device causing the execution of code on a terminal to present a user interface and facilitate network communications.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Abbott and Shmueli for several reasons. First, it would be a simple and predictable combination to add Shmueli’s convenience features (e.g., portable bookmarks, password management) to Abbott’s secure device to create a product that was both secure and easy to use across multiple computers. Second, a POSITA would be motivated to use Abbott's on-board processor to implement Shmueli's software ("keylets") for more powerful and flexible functionality. Third, combining Shmueli’s user-friendly web browser plug-ins (e.g., a launch bar) with Abbott's secure document access system would provide more intuitive access to secure files. Fourth, both references teach using platform-independent Java, motivating a POSITA to use Shmueli’s Java-based password manager to satisfy Abbott’s stated need for cross-platform password management. Finally, a POSITA would implement Abbott’s more secure authentication protocol—where the PIN is verified on the portable device itself—into Shmueli's system to enhance its security.
    • Expectation of Success: Petitioner asserted a POSITA would have a high expectation of success. Both references describe physically similar USB devices, utilize standard interfaces, and operate in similar computing environments (e.g., connecting to a Windows-based host computer). This similarity would ensure that features like Shmueli's "autorun" capability would predictably function on Abbott's host system.

Ground 2: Obviousness over Abbott, Shmueli, and Cannata - Claims 66 and 115 are obvious over Abbott in view of Shmueli and further in view of Cannata.

  • Prior Art Relied Upon: Abbott (Patent 7,272,723), Shmueli (Application # 2002/0147912), and Cannata (Patent 6,917,962).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon the combination of Abbott and Shmueli to address the additional limitation in claims 66 and 115 requiring the "transmission of a live data feed to the terminal." Petitioner argued that while Abbott and Shmueli provided the foundational system for secure, portable network access, they did not explicitly disclose a live data feed. Cannata was introduced to supply this missing element, as it describes a system that displays current stock prices (a "stock ticker") on a terminal, which Petitioner asserted is an exemplary live data feed as contemplated by the ’703 patent.
    • Motivation to Combine: A POSITA would have been motivated to integrate the live data feed taught by Cannata into the secure access framework of Abbott and Shmueli. Abbott explicitly states its portable device is intended to provide secure access to various network resources, such as online banking and account management systems. Petitioner argued that online stock trading platforms, which rely on live data feeds like that in Cannata, are a well-known example of such a resource, making the combination a logical and obvious design choice to enhance the utility of the base system.

4. Key Claim Construction Positions

  • Petitioner argued for a specific construction of the term "[first/second/third] program code." The petition asserted that these numerical prefixes do not require structurally separate and distinct software modules for each recited function. Instead, a POSITA would understand them as mere shorthand for referring to different functionalities. Therefore, a single program code, such as one executable file or routine, could perform the functions of more than one numbered "program code" limitation recited in the claims. This construction was central to Petitioner's argument that prior art teaching a single software component performing multiple claimed functions would satisfy the claim limitations.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that the Board should not exercise its discretion to deny institution. The petition contended that its challenge was starkly different from parallel IPRs filed by another party (Ingenico), as PayPal’s petition relied on USB-based prior art while Ingenico’s relied on digital camera art. Petitioner also noted that the co-pending district court litigation was in its early stages, with trial not scheduled for more than a year, making the inter partes review (IPR) an efficient alternative for resolving the validity dispute. Finally, Petitioner asserted it had not engaged in undue delay or "lying in wait" to gain a tactical advantage.

6. Relief Requested

  • Petitioner requested institution of an IPR and cancellation of claims 55-72, 74-75, 77-79, 81-87, 89-90, 92-98, 100-101, 103-121, 123-124, and 126-129 of the ’703 patent as unpatentable.