Samsung Electronics Co Ltd v. Dynamics Inc

1. Case Identification

• Case #: IPR2020-00499
• Patent #: 8,827,153
• Filed: January 31, 2020
• Petitioner(s): Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Research America, Inc.
• Patent Owner(s): Dynamics Inc.
• Challenged Claims: 1, 5-8

2. Patent Overview

• Title: Systems and Methods for Waveform Generation for Dynamic Magnetic Stripe Communications Devices
• Brief Description: The ’153 patent describes a device, such as a payment card, featuring a magnetic stripe emulator that communicates with a standard magnetic stripe reader. The device includes a waveform generator that retrieves a digital representation of magnetic stripe data from memory, generates an analog waveform from it, and uses the emulator to transmit the waveform.

3. Grounds for Unpatentability

Ground 1: Obviousness over Gutman and Shoemaker - Claims 1, 5-8 are obvious over Gutman in view of Shoemaker.

• Prior Art Relied Upon: Gutman (Patent 6,206,293) and Shoemaker (Patent 7,690,580).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Gutman disclosed the core elements of claim 1: a magnetically communicative card (the claimed "device") with a conductor (the "magnetic stripe emulator") and a controller/driver circuit (the "waveform generator") to emulate magnetic stripe data. Petitioner contended Gutman’s "data signal" is a digital representation of track data. While Gutman’s generator produces a digital waveform, Petitioner argued it would have been obvious to add a standard digital-to-analog converter to produce the claimed analog waveform to improve readability and reduce noise. The key limitation added during prosecution, retrieving the digital representation from a "plurality of digital representations," was allegedly rendered obvious by Shoemaker. Shoemaker explicitly taught using multiple representations of the same track data to enable features like bi-directional swiping (e.g., forward and reverse data streams) or multiple user profiles (e.g., business and personal) for a single account.
  • Motivation to Combine: A POSITA would combine Shoemaker's teachings with Gutman's device to improve its functionality and commercial convenience. Implementing well-known features like bi-directional swiping would make Gutman's card more compatible with the existing infrastructure and more user-friendly.
  • Expectation of Success: Petitioner asserted that incorporating bi-directional swiping or user profiles were routine implementation details at the time, giving a POSITA a reasonable expectation of success.
  • Key Aspects: Petitioner argued that Gutman alone also rendered the dependent claims obvious. Gutman’s user interface with a "button" met the limitations of claims 5 and 6, and its disclosure of emulating cards with up to three tracks of data met the limitations of claims 7 (two tracks) and 8 (three tracks).

Ground 2: Obviousness over Lessin and Shoemaker - Claims 1, 5-8 are obvious over Lessin in view of Shoemaker.

• Prior Art Relied Upon: Lessin (Patent 4,868,376) and Shoemaker (Patent 7,690,580).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Lessin, like Gutman, disclosed the fundamental device of claim 1. Lessin described an "intelligent transaction card" with a magnetic head/transducer (the "magnetic stripe emulator") that transmits magnetically encoded information. Lessin’s device used a microprocessor and analog circuitry, explicitly described as a digital-to-analog converter, to generate an analog signal that emulates a credit card’s magnetic stripe, thus teaching the claimed "waveform generator" creating an "analog waveform." As in Ground 1, Petitioner relied on Shoemaker to teach the "plurality of digital representations" limitation, arguing that Shoemaker’s disclosure of bi-directional swiping and multiple user profiles was a known and obvious improvement.
  • Motivation to Combine: A POSITA would combine Shoemaker with Lessin to enhance the functionality of Lessin's card. Lessin itself recognized the motivation to add functionality to smart cards to make them more desirable and user-friendly, and Shoemaker provided a known path to do so.
  • Expectation of Success: As these were routine design choices for improving card functionality, a POSITA would have had a high expectation of success in combining the teachings.
  • Key Aspects: Petitioner contended that Lessin’s alphanumeric keypad with "YES" and "NO" keys for making purchases satisfied the "button" limitation of claims 5 and 6. Further, Lessin's teaching of emulating conventional credit cards, which had multiple tracks in the late 1980s, was argued to meet the limitations of claims 7 and 8.

4. Key Claim Construction Positions

• Petitioner argued that while no terms required construction to find the challenged claims obvious, it presented proposed constructions to resolve disputes from a related ITC case.
• "magnetic stripe emulator": Petitioner proposed "an emulator in a magnetic stripe form that can communicate magnetic information." Patent Owner proposed "plain and ordinary meaning."
• "digital representation of said at least one track of magnetic stripe data": Petitioner proposed "a digital waveform that represents said at least one track of magnetic stripe data." Patent Owner proposed "digital information that represents said at least one track of magnetic stripe data."
• Petitioner maintained that the challenged claims were obvious under either party's proposed constructions.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that the Board should not exercise its discretion to deny institution under §325(d) based on the Becton Dickinson factors.
• Petitioner asserted that the prior art and arguments presented were materially different from those considered during prosecution. Although Gutman was cited in a large Information Disclosure Statement (IDS) with over 200 other references, it was not substantively reviewed or used as the basis for any rejection by the Examiner.
• The other primary references, Lessin and Shoemaker, were never before the Examiner. Therefore, the specific combinations of art asserted in the petition were never evaluated during prosecution, and the asserted art is not cumulative of the art the Examiner considered.

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1 and 5-8 of Patent 8,827,153 as unpatentable.