Target Corp v. Proxicom Wireless LLC

1. Case Identification

• Case #: IPR2020-00978
• Patent #: 8,116,749
• Filed: June 1, 2020
• Petitioner(s): Target Corporation
• Patent Owner(s): Proxicom Wireless, LLC
• Challenged Claims: 1-3, 13-14, 17-20

2. Patent Overview

• Title: Facilitating Information Exchange Between Wireless Devices Using a Central Server
• Brief Description: The ’749 patent discloses a system and method where a central server facilitates the exchange of information between two wireless devices. The system uses both a short-range wireless link (e.g., Bluetooth) for direct device-to-device communication and a long-range wireless link (e.g., cellular) for communication with the central server, coordinating the periodic modification of device identifiers to maintain user privacy.

3. Grounds for Unpatentability

Ground 1: Anticipation and Obviousness over Mgrdechian - Claims 1-3, 13-14, 17-20 are anticipated or obvious over Mgrdechian

• Prior Art Relied Upon: Mgrdechian (Patent 7,545,784).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Mgrdechian discloses all elements of the challenged claims. Mgrdechian teaches a wireless communication system where a first device receives a unique identifier (ID) from a second device over a short-range "local wireless protocol" like Bluetooth. The first device then transmits this ID to a remote server over a second, long-range wireless network. The server stores and associates these IDs with user profile information. Crucially, Mgrdechian explicitly teaches that these device IDs can be "dynamic or pseudo-random," changing over time to protect user anonymity. The server is aware of these ID changes to maintain the association, thus disclosing the claimed cycle of receiving an initial ID, followed by a modified ID, and communicating both to a central server.
  • Motivation to Combine (for §103 grounds): Petitioner asserted that, to the extent any limitation is not explicitly disclosed, a Person of Ordinary Skill in the Art (POSITA) would have found it obvious to implement the claimed features based on Mgrdechian's own teachings. Mgrdechian’s stated goal of enabling anonymous or pseudonymous information exchange would have motivated a POSITA to implement its dynamic ID feature in the manner claimed to ensure user profiles remain accessible via the server while protecting user privacy, which was a well-known objective in the art.
  • Expectation of Success: A POSITA would have had a high expectation of success because using a server to manage dynamically changing device IDs to maintain user associations while enhancing privacy was a known and predictable technique. Implementing this within Mgrdechian's disclosed architecture would have predictably achieved its stated security and privacy goals.

Ground 2: Obviousness over Mgrdechian in view of Kulakowski - Claims 1-3, 13-14, 17-20 are obvious over Mgrdechian in view of Kulakowski

• Prior Art Relied Upon: Mgrdechian (Patent 7,545,784) and Kulakowski (WO 2007/084973).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner contended that if Mgrdechian is found to lack specific details regarding the timing, procedure, or purpose of changing identifiers, Kulakowski supplies these missing elements. Kulakowski describes a network security system for detecting cloned devices by using "covert identifiers" that are updated based on predetermined events. These events include an elapsed time, a number of uses, or the occurrence of a specific operational event (e.g., sending or receiving a message). This teaching directly maps to limitations in the challenged claims requiring the identifier change to occur upon a "predetermined event" and for the purpose of validating the device or transaction.
  • Motivation to Combine: A POSITA starting with Mgrdechian's system for anonymous communication using dynamic IDs would be motivated to incorporate Kulakowski's teachings to improve security and provide a concrete mechanism for managing the ID changes. Kulakowski is directed to the same technical field (client-server communication security) and addresses the same problems (spoofing, fraud, privacy). A POSITA would combine Kulakowski’s method for generating and updating identifiers based on operational events with Mgrdechian’s architecture to create a more robust and secure system for validating devices and protecting user data.
  • Expectation of Success: The combination would have yielded predictable results. Applying Kulakowski's established security protocols for updating identifiers to Mgrdechian's wireless communication framework was a straightforward application of known security principles to a known system architecture. A POSITA would have reasonably expected this combination to successfully enhance the security and functionality of Mgrdechian's system as claimed.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §325(d) was inappropriate because the primary prior art references, Mgrdechian and Kulakowski, were never substantively applied by the examiner during the original prosecution of the ’749 patent. Therefore, the petition presented new and non-cumulative arguments.
• Petitioner further argued against discretionary denial under §314(a) based on the Fintiv factors, asserting that the co-pending district court litigation was in its early stages, a trial was not imminent, and Petitioner had not delayed in filing the IPR petition.

5. Relief Requested

• Petitioner requests the institution of an inter partes review and the cancellation of claims 1-3, 13-14, and 17-20 of the ’749 patent as unpatentable under 35 U.S.C. §102 and/or §103.