Microsoft Corp v. Proxense LLC

1. Case Identification

• Case #: IPR2024-00405
• Patent #: 10,073,960
• Filed: January 16, 2024
• Petitioner(s): Microsoft Corporation
• Patent Owner(s): Proxense, LLC
• Challenged Claims: 1-20

2. Patent Overview

• Title: Hybrid Device Having a Personal Digital Key and Receiver-Decoder Circuit and Methods of Use
• Brief Description: The ’960 patent relates to a hybrid device comprising an integrated Personal Digital Key (PDK) with secure memory and an integrated wireless communication interface. The device is designed to communicate wirelessly with external devices in a proximity zone to enable applications, functions, or services based on the local, secured information it stores.

3. Grounds for Unpatentability

Ground 1: Claims 1-20 are obvious over Giobbi-157 in view of Giobbi-139, with further support from Dua.

• Prior Art Relied Upon: Giobbi-157 (Application # 2007/0245157), Giobbi-139 (Application # 2004/0255139), and Dua (Patent 9,042,819).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Giobbi-157 teaches a portable device, such as a cell phone, that incorporates a Personal Digital Key (PDK) with tamper-proof memory for storing secure user information (e.g., biometrics, financial data). Giobbi-139 teaches integrating a receiver-decoder circuit (RDC) into a similar portable device (e.g., a cell phone) to enable or disable device functions based on communication with a PDK. The combination of these references was argued to disclose a battery-powered device with both an integrated secure memory (from Giobbi-157's PDK) and an integrated wireless communication interface (from Giobbi-139's RDC), which communicates with external devices to enable services. Dua was presented as corroborating evidence, disclosing a similar architecture where an RFID tag (analogous to the PDK) and an RFID reader (analogous to the RDC) are integrated into a single mobile device for secure transactions.
  • Motivation to Combine: A POSITA would combine the teachings of Giobbi-157 and Giobbi-139 because they were developed by the same applicant, address the common technical goal of providing secure access via portable devices, and use a compatible PDK/RDC architecture. The combination would yield the predictable benefit of a single, convenient device that could secure both its own internal assets (per Giobbi-139) and enable secure transactions with external systems (per Giobbi-157).
  • Expectation of Success: Petitioner contended there was a high expectation of success in combining the references. The integration involved applying known security components (PDKs and RDCs) to a known platform (a cell phone) to achieve the predictable result of unified, enhanced security. The feasibility of such integration was further supported by analogous systems like the one described in Dua.

Ground 2: Claims 1-20 are obvious over Broadcom in view of Giobbi-157.

• Prior Art Relied Upon: Broadcom (European Patent # EP 1 536 306) and Giobbi-157 (Application # 2007/0245157).

• Core Argument for this Ground:

  • Prior Art Mapping: Petitioner asserted that Broadcom discloses the fundamental elements of the claimed invention. Broadcom teaches an "access device" (e.g., a mobile phone) containing a secure "authentication component" (the claimed integrated secure memory) and a "wireless proximity reader" (the claimed wireless interface). This access device communicates with an external "wireless proximity token" to enable access to a secured service. Giobbi-157 was cited to provide teachings for limitations found primarily in dependent claims, such as implementing the external token in "jewelry" or a "watch" (addressing claims 12, 13, and 20) and using an external authentication database that is separate from a merchant in a financial transaction (addressing claim 9).
  • Motivation to Combine: A POSITA, starting with Broadcom's secure access system, would be motivated to incorporate the teachings of Giobbi-157 to add further implementation details and features. Giobbi-157’s disclosures on alternative form factors (e.g., watches) for external tokens and specific transaction architectures (e.g., third-party authentication) were argued to be well-known, compatible, and advantageous enhancements to Broadcom's system.
  • Expectation of Success: The combination was asserted to have a high likelihood of success because it involved augmenting Broadcom's system with conventional and compatible features from Giobbi-157. This amounted to incorporating known design choices and system configurations into an existing, suitable framework.

• Additional Grounds: Petitioner asserted an additional obviousness challenge against claims 1-8, 10-11, and 14-19 based on the teachings of Broadcom alone.

4. Key Claim Construction Positions

• Petitioner argued for a specific construction of the term "Personal Digital Key ('PDK')" as it appears in claim 20.
• The proposed construction is: "an operably connected collection of elements including an antenna and a transceiver for communicating with a RDC and a controller and memory for storing information particular to a user." This construction was adopted from a related district court case and was argued to be necessary to demonstrate how prior art references meet the limitations of claim 20.

5. Arguments Regarding Discretionary Denial

• §325(d) (Same or Substantially Same Art or Arguments): Petitioner argued against discretionary denial under §325(d), contending that the Examiner never considered the asserted prior art references or the specific combinations presented in the petition during the original prosecution of the ’960 patent. This failure to consider the asserted art was characterized as a material error.
• Fintiv Factors (Parallel Litigation): Petitioner contended that the Fintiv factors strongly favor institution. The arguments centered on the uncertainty of the parallel district court litigation schedule, noting a pending motion to transfer venue and a recently cancelled Markman hearing. Petitioner also highlighted that the IPR was filed diligently, months ahead of the statutory deadline, and asserted that the petition's merits are particularly strong, outweighing any potential inefficiencies from parallel proceedings.

6. Relief Requested

• Petitioner requests the institution of an inter partes review and the cancellation of claims 1-20 of Patent 10,073,960 as unpatentable under 35 U.S.C. §103.