Target Corp v. Proxicom Wireless LLC

1. Case Identification

• Case #: IPR2020-00933
• Patent #: 8,374,592
• Filed: May 15, 2020
• Petitioner(s): Target Corporation
• Patent Owner(s): Proxicom Wireless, LLC
• Challenged Claims: 19-23, 25-26, 28-29

2. Patent Overview

• Title: System for Brokering Information Exchange Between Wireless Devices
• Brief Description: The ’592 patent relates to a system using a central server to broker information exchange between two wireless devices. The system involves a first device detecting an identifier from a second device via a short-range wireless link, transmitting that identifier to the server via a wide-area network, and the server returning associated information, such as electronic coupons or loyalty rewards, to the first device.

3. Grounds for Unpatentability

Ground 1: Claims 19-23 are obvious over Perttila in view of Insolia.

• Prior Art Relied Upon: Perttila (Application # 2004/0243519) and Insolia (Patent 8,121,917).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Perttila taught the core architecture of the challenged claims. Perttila disclosed a system where a user's mobile device (the first wireless device) receives a "merchant-media ID code" from a short-range beacon, such as a Bluetooth or RFID tag located on a promotional display (the second wireless device). The mobile device then transmits this ID to a remote server over a wide-area network (e.g., a mobile network or the Internet). In response, the server generates and returns service information, such as a personalized electronic coupon, to the user's device. Petitioner contended that this system meets most limitations of independent claim 19. However, Perttila did not explicitly disclose delivering information representing a reward for participation in a "loyalty program." This limitation, Petitioner argued, was supplied by Insolia. Insolia taught a "loyalty server" that implements a loyalty program by providing benefits, such as "loyalty points," to a user's personal terminal when it comes into proximity with an "interaction terminal" associated with a product or promotional object.
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Insolia’s known loyalty program teachings with Perttila’s e-coupon system. The motivation was to improve Perttila's system by providing an additional, well-understood incentive for users to interact with the promotional media. This would predictably increase customer engagement and brand loyalty, a recognized goal in the art.
  • Expectation of Success: The combination involved applying a known incentive method (a loyalty program) to a known proximity-based e-commerce system. Petitioner asserted this was a predictable integration of established functions that would have yielded the claimed system with a high expectation of success.

Ground 2: Claims 25-26 and 28-29 are obvious over Perttila in view of Davis.

• Prior Art Relied Upon: Perttila (Application # 2004/0243519) and Davis (Application # 2010/0030638).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner again relied on Perttila for the foundational system of a mobile device interacting with a server based on proximity to a short-range beacon. Independent claim 25 requires the server to deliver information based in part upon "feedback ratings of past experiences" related to an entity or object near the second wireless device. Petitioner argued that Davis explicitly taught this missing element. Davis disclosed a "trust network rating system" for personalizing advertisements and coupons. In Davis, content is filtered and delivered to a user based on an "Effective Rating" calculated from an aggregation of ratings provided by other trusted users familiar with the advertised item or service.
  • Motivation to Combine: A POSITA would combine Davis’s feedback rating system into Perttila’s framework to improve the personalization of the promotional offers. Perttila already disclosed personalizing e-coupons based on user history. Davis provided a known and more sophisticated method for personalization, ensuring that users receive "only pertinent and interesting advertisements," thereby increasing the likelihood of a positive response. This combination represented a straightforward path to improving the effectiveness of the promotional system disclosed in Perttila.
  • Expectation of Success: Incorporating a known technique for personalizing content via user feedback (Davis) into a system designed to deliver promotional content (Perttila) was a simple design choice. A POSITA would have expected this combination to work predictably to create more effectively targeted advertisements.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial of the inter partes review (IPR) would be inappropriate.
  • Under 35 U.S.C. §325(d), Petitioner contended the grounds were not cumulative because the primary references—Perttila, Insolia, and Davis—were never considered by the USPTO during the original prosecution of the ’592 patent.
  • Under 35 U.S.C. §314(a) and the Fintiv factors, Petitioner asserted that the co-pending district court litigation was in its early stages, the court had a history of granting stays pending IPR outcomes, and there was no delay in filing the petition. Furthermore, Petitioner argued the IPR presented prior art and invalidity grounds that the USPTO had never considered, making Board review particularly valuable.

5. Relief Requested

• Petitioner requested institution of IPR and cancellation of claims 19-23, 25-26, and 28-29 as unpatentable under 35 U.S.C. §103.