PTAB

IPR2021-00658

Askeladden LLC v. Xylon Licensing LLC

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Key Events
Petition

1. Case Identification

2. Patent Overview

  • Title: Delegated Transactions Over Mobile
  • Brief Description: The ’165 patent relates to systems and methods for completing secure financial transactions using mobile devices. The invention allows a customer to delegate a transaction to another person's mobile device (a "delegate mobile device"), with security and finalization managed by a "customer secure computing device" or a central server.

3. Grounds for Unpatentability

Ground 1: Claims 1-7 and 15-18 are anticipated by or obvious over Wentker

  • Prior Art Relied Upon: Wentker (Application # 2009/0037982).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Wentker, which teaches a system for authenticating a party to a transaction, discloses every limitation of the challenged claims. Wentker describes a "presenter" (customer) using a personal computer to browse a merchant website who can verify their identity using a mobile phone. Petitioner contended that the claimed "customer secure computing device" corresponds to Wentker's combination of an "issuer look-up system" and a "merchant plug-in (MPI)," which collectively manage the transaction. The claimed "delegate mobile device" was mapped to the presenter's mobile phone, which receives an authentication challenge (e.g., via SMS) and sends back authentication data (e.g., a password). Petitioner asserted that Wentker's system acquires the delegate mobile device's phone number ("alias identifier") and transaction data, stores them, and automatically initiates payment authorization upon receiving a valid response from the mobile device, thus meeting the limitations of independent claims 1 and 15.
    • Motivation to Combine (for obviousness portion): To the extent any limitation was not explicitly disclosed, Petitioner argued its inclusion would have been obvious. For instance, a POSITA would find it obvious for the system to receive a merchant identifier as part of the transaction data to ensure the merchant is qualified to process transactions and receive payment, as this is a fundamental requirement of commercial transactions.
    • Expectation of Success: Petitioner implicitly argued for a high expectation of success, as the system described in Wentker uses conventional components and communication methods (web interfaces, SMS, databases) for remote transaction authentication and processing.

Ground 2: Claim 8 is obvious over Drokov in view of Phillips

  • Prior Art Relied Upon: Drokov (WO 2007/072001) and Phillips (Application # 2009/0166420).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Drokov, which teaches a system for dynamic multi-factor authentication, discloses most elements of server-side independent claim 8. Drokov's "remote authentication device" (a network server) was mapped to the claimed "secure transaction server," its "access terminal" (e.g., a POS terminal) was mapped to the "customer secure computing device," and the user's mobile phone was mapped to the "delegate mobile device." Drokov's server receives an authentication request with transaction details from the access terminal, sends an authentication code to the user's mobile device, and receives a response back to validate the transaction. Phillips, which describes enrolling merchant devices for contactless payments, was used to supply missing details.
    • Motivation to Combine: Petitioner asserted a POSITA would combine the teachings of Drokov and Phillips. While Drokov teaches the secure authentication flow, it does not explicitly detail the commercial aspects of the transaction, such as receiving a merchant identifier or the customer's mobile number from the access terminal. Phillips teaches that providing a merchant identifier and a mobile phone number during enrollment and transaction processing was a well-known and standard practice. A POSITA would combine Drokov's security method with Phillips's standard transaction data practices to create a commercially viable system that prevents fraud and ensures the correct merchant is paid. The motivation was to apply Drokov's robust authentication to a real-world payment transaction, which inherently requires the data elements taught by Phillips.
    • Expectation of Success: A POSITA would have a reasonable expectation of success in this combination because it involved implementing a known security protocol (Drokov) using standard, well-understood transaction data fields (Phillips) to improve its functionality and applicability to commercial payments.

4. Key Claim Construction Positions

  • "customer secure computing device" (claims 1-4, 6, 8, 15): Petitioner proposed this term be construed as any "device or devices interacting with or on behalf of the customer for processing customer authentication." This broad construction was central to the invalidity arguments, particularly for Ground 1, as it allowed Petitioner to map the claimed single "device" to a distributed system of multiple components in the prior art (e.g., Wentker’s issuer look-up system and merchant plug-in).
  • "instruction to enter" (claim 4): Petitioner proposed this term means a "message or signal that indicates, explicitly or implicitly, an action to perform." This construction supported mapping Wentker's authentication challenge (which requires a responsive action) to this claim limitation.
  • "client" (claims 16-17): Petitioner proposed this term means "a piece of computer hardware or software that accesses a service made available by a server." This construction supported mapping elements like Wentker's web page interface to the claimed "merchant delegation client."

5. Relief Requested

  • Petitioner requests institution of an inter partes review (IPR) and cancellation of claims 1-8 and 15-18 of Patent 8,719,165 as unpatentable.