Target Corp v. Proxicom Wireless LLC

1. Case Identification

• Case #: IPR2020-00934
• Patent #: 8,385,896
• Filed: May 27, 2020
• Petitioner(s): Target Corporation
• Patent Owner(s): Proxicom Wireless, LLC
• Challenged Claims: 1-3, 5-6, 8-9, 17-18, 40-41, 44, 48-53, and 56

2. Patent Overview

• Title: Server for Brokering Information Exchange Between Wireless Devices
• Brief Description: The ’896 patent describes a method and system where a central server facilitates an e-commerce transaction between two wireless devices. The system utilizes a combination of short-range wireless communication (e.g., Bluetooth) for proximity detection and long-range wireless communication (e.g., cellular) for connecting to the server.

3. Grounds for Unpatentability

Ground 1: Claims 1-3, 5-6, 8, 17-18, 40-41, 44, 48-53, and 56 are obvious over Perttila in view of Emmons.

• Prior Art Relied Upon: Perttila (Application # 2004/0243519) and Emmons (Patent 7,963,441), which incorporates by reference Recktenwald (Patent 6,439,345) and Attia (Patent 7,156,311).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Perttila disclosed the core architecture of the ’896 patent. In Perttila, a user's mobile device (the "first wireless device") receives an identifier from a merchant's beacon device (the "second wireless device") via a short-range link like Bluetooth when in proximity. The mobile device then sends this identifier to a remote server over the internet, and the server returns "merchant-based service information," such as a personalized electronic coupon. Petitioner contended that while Perttila established the communication framework, it lacked explicit details for completing a purchase. Emmons allegedly supplied these missing elements by teaching a complete mobile e-commerce system for "self service checkout and product delivery." Emmons disclosed using a mobile device to scan a product, which sends information to a server. The server then presents a webpage allowing the user to add the item to a cart, confirm the purchase, select payment and delivery options, and receive a receipt. Petitioner asserted that combining these references taught all limitations of the challenged independent claims (1 and 40) and their dependents.
  • Motivation to Combine: Petitioner asserted that a person of ordinary skill in the art (POSITA) would combine Emmons’s detailed mobile purchasing and checkout system with Perttila’s proximity-based promotional e-coupon system. The motivation was to enhance Perttila’s system by allowing a user to seamlessly purchase the very products for which they received a promotional offer, which Petitioner described as an obvious and advantageous improvement to facilitate merchant transactions.
  • Expectation of Success: Petitioner argued that combining these known systems would have been straightforward. A POSITA would have had a reasonable expectation of success because it involved applying a conventional mobile checkout process (Emmons) to a system that already delivered product promotions to a mobile device (Perttila), a combination of known elements yielding predictable results.

Ground 2: Claim 9 is obvious over Perttila in view of Emmons and Insolia.

• Prior Art Relied Upon: Perttila (Application # 2004/0243519), Emmons (Patent 7,963,441), and Insolia (Patent 8,121,917).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground specifically addressed claim 9, which added the limitation of "crediting said purchase in a reward program." Petitioner argued that the base combination of Perttila and Emmons, as established in Ground 1, provided the underlying e-commerce method but did not explicitly teach a rewards program. Insolia was introduced to provide this missing element. Insolia taught a system with a "loyalty server" designed to implement a "loyalty program" that provides a "benefit" or "additional reward" to a user when they purchase a product.
  • Motivation to Combine: Petitioner argued that a POSITA, having already combined Perttila and Emmons to create a functional promotional e-commerce system, would be motivated to incorporate the teachings of Insolia. The motivation was to further improve the system by adding a known loyalty program to encourage repeat business and enhance customer loyalty, a common and well-understood business practice. Adding a rewards feature to an e-commerce platform was presented as an obvious way to increase user engagement and sales.
  • Expectation of Success: Petitioner contended that a POSITA would have expected success in this combination. Integrating a known software-based loyalty program (Insolia) into an existing e-commerce transaction flow (Perttila/Emmons) was a predictable implementation that used established techniques to achieve a known business goal.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that the Board should not exercise discretionary denial under §325(d) because the primary references (Perttila, Emmons, Insolia) were never cited or considered by the examiner during the prosecution of the ’896 patent, making the petition's arguments new and non-cumulative.
• Petitioner also presented arguments against discretionary denial under Fintiv, asserting that: (1) the related district court litigation was in its early stages with no substantive rulings; (2) Petitioner had not delayed in filing the IPR petition; and (3) a stay of the district court case pending the outcome of the IPR was likely, weighing in favor of institution.

5. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-3, 5-6, 8-9, 17-18, 40-41, 44, 48-53, and 56 of the ’896 patent as unpatentable under 35 U.S.C. §103.