PTAB

IPR2023-00211

Samsung Electronics Co., Ltd. v. CardWare Inc.

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1. Case Identification

2. Patent Overview

  • Title: Multi-Functional Credit Card Type Portable Electronic Device
  • Brief Description: The ’520 patent describes an electronic payment card or device capable of generating and transmitting a "limited-duration number" to conduct a secure payment transaction, such as at an automated teller machine (ATM).

3. Grounds for Unpatentability

Ground 1: Obviousness over Gill, Smith, and Kay - Claims 18-21 and 24 are obvious over Gill in view of Smith and Kay.

  • Prior Art Relied Upon: Gill (Patent 9,098,846), Smith (Application # 2013/0232083), and Kay (Application # 2013/0124410).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that the combination of Gill, Smith, and Kay taught all limitations of the challenged claims. Gill disclosed a method for conducting contactless transactions at an ATM using a mobile device via a near-field communication (NFC) interface. However, Gill lacked detail on securing the transaction data. Smith addressed this gap by teaching a mobile device that uses a tokenized Mobile Cloud Account Number (MCA) and a payment cryptogram for contactless transactions, preventing the need to store or transmit the user's real card account number (RCA). Kay supplemented this by disclosing a graphical user interface (GUI) on a mobile device that allows a user to select specific ATM transaction types (e.g., withdraw, deposit) and enter transaction amounts. The combination renders obvious a method of facilitating an ATM transaction where the mobile device provides account and authorization information (from Smith) via a GUI (from Kay) to an ATM (per Gill).
    • Motivation to Combine: A person of ordinary skill in the art (POSITA) would combine Gill with Smith to improve the security of Gill's contactless ATM system, a known issue. Using Smith's tokenization (MCA) and cryptogram was a predictable solution to enhance security. A POSITA would further incorporate Kay’s GUI to improve the usability of the mobile device in Gill’s system, which already contemplated a GUI but lacked specific implementation details. Kay provided a known, user-friendly interface for selecting ATM transaction types on a mobile device.
    • Expectation of Success: A POSITA would have had a high expectation of success, as this involved applying known security techniques (Smith) and user interface designs (Kay) to a known system (Gill) to achieve the predictable results of improved security and usability.

Ground 2: Obviousness over Gill, Smith, Kay, and Gomez - Claims 18-24 are obvious over Gill in view of Smith, Kay, and Gomez.

  • Prior Art Relied Upon: Gill (Patent 9,098,846), Smith (Application # 2013/0232083), Kay (Application # 2013/0124410), and Gomez (Patent 9,600,808).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon the Gill-Smith-Kay combination by adding Gomez to provide specific implementation details for the dynamically generated cryptogram taught by Smith. While Smith disclosed a dynamic cryptogram, it did not specify how the cryptogram would change for each transaction. Gomez taught a payment card system that generates a unique, time-limited "authentication cryptogram" for each transaction based on a "temporal signal" (e.g., date/time or a sequence number) and a secret seed value. Petitioner argued that Gomez provided the missing details for generating the limited-use, dynamic number portions recited in claim 18. The combination, therefore, taught generating a static token (MCA from Smith) and a dynamic cryptogram (per the method of Gomez) to conduct a secure, contactless ATM transaction.
    • Motivation to Combine: A POSITA seeking to implement the dynamic cryptogram from the Gill-Smith-Kay combination would have been motivated to look for known methods of generating such cryptograms to prevent replay attacks. Gomez provided a well-understood solution by using a temporal signal, making it an obvious choice to implement the dynamic aspect of Smith’s cryptogram. The systems of Smith and Gomez were highly similar, both using a token account number paired with a transaction-specific cryptogram.
    • Expectation of Success: A POSITA would have expected success in integrating Gomez's cryptogram generation method into the Gill-Smith-Kay system. This was a straightforward application of a known cryptographic technique to achieve its intended, predictable purpose of enhancing transaction security.

4. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial would be inappropriate under both §325(d) and the Fintiv factors.
  • §325(d) Argument: Petitioner asserted that the petition presented new prior art and arguments, as none of the relied-upon references (Gill, Smith, Kay, or Gomez) were considered or applied by the Examiner during the original prosecution of the ’520 patent.
  • Fintiv Factors Argument: Petitioner contended that the Fintiv factors strongly favored institution. The parallel district court litigation was in its early stages, with minimal investment by the court or parties. The trial date was not expected until after the PTAB's Final Written Decision (FWD) would be due, based on median time-to-trial statistics for the district. Petitioner also stipulated that it would not pursue the same invalidity grounds in the district court if the IPR was instituted, eliminating concerns of overlap and duplicative efforts. Finally, Petitioner argued the petition presented compelling merits for unpatentability.

5. Relief Requested

  • Petitioner requested institution of an inter partes review and cancellation of claims 18-24 of the ’520 patent as unpatentable under 35 U.S.C. §103.