Microsoft Corp v. Proxense LLC

1. Case Identification

• Case #: IPR2024-00407
• Patent #: 9,679,289
• 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 ’289 patent discloses a "hybrid device" that integrates both a secure memory for storing local information (e.g., a personal digital key or "PDK") and an integrated reader-decoder circuit ("RDC"). The device wirelessly communicates with external devices or RDCs to enable applications, functions, and services based on the stored secure information.

3. Grounds for Unpatentability

Ground 1: Obviousness over Giobbi-157, Giobbi-139, and Dua - 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 key aspects of the claimed invention, including a Personal Digital Key (PDK) with secure, tamper-proof memory for storing biometric or financial profiles. Giobbi-157 explicitly discloses integrating this PDK into a portable electronic device, such as a cellphone, to communicate with an external reader-decoder circuit (RDC) to authorize transactions. Separately, Giobbi-139 teaches integrating an RDC directly into a mobile device (e.g., a cellphone) to secure the device itself, enabling or disabling its functions based on communication with a PDK. The combination of these references results in a single mobile device—a "hybrid device"—containing both an integrated secure memory (PDK) and an integrated RDC, as claimed.
  • Motivation to Combine: Petitioner asserted a POSITA would combine the teachings of Giobbi-157 and Giobbi-139 to create a single, more secure and convenient device. Integrating Giobbi-157’s PDK and Giobbi-139’s RDC into one cellphone would allow a user to use the integrated PDK to securely access external assets (per Giobbi-157) and use the integrated RDC to protect internal assets on the phone itself (per Giobbi-139). Dua was presented as corroborating the common practice of integrating both transmitter (like a PDK) and receiver (like an RDC) components into a single mobile device for proximity-based functions.
  • Expectation of Success: A POSITA would have a high expectation of success because both Giobbi references describe compatible PDK/RDC architectures for the same type of devices (cellphones), were filed by the same applicant, and address similar security objectives.

Ground 2: Obviousness over Broadcom - Claims 1-8, 10-11, and 14-19 are obvious over Broadcom.

• Prior Art Relied Upon: Broadcom (European Patent # EP 1 536 306).

• Core Argument for this Ground:

  • Prior Art Mapping: Petitioner contended that Broadcom alone discloses all elements of the challenged claims. Broadcom teaches an "access device," which can be a mobile phone, that functions as the claimed "hybrid device." This access device includes an integrated "wireless proximity reader" (the claimed integrated RDC) and a secure, tamper-resistant "authentication component" that stores credentials locally (the claimed integrated, secure memory). Broadcom’s access device communicates wirelessly with an external "wireless proximity token" within a proximity zone to authenticate a user and enable access to a secured service, thereby meeting the limitations of independent claims 1 and 14.
  • Key Aspects: Petitioner argued that Broadcom’s disclosure of an integrated system for proximity-based authentication in a mobile device renders the claims obvious without needing a combination of references. Dependent claim features, such as using biometric or financial information, were also asserted to be taught by Broadcom’s disclosure of using fingerprint data or credit card information stored on its tokens.

• Additional Grounds: Petitioner asserted additional obviousness challenges for all claims (1-20) based on the combination of Broadcom in view of Giobbi-157. This ground argued that a POSITA would have been motivated to incorporate Giobbi-157's teachings on implementing tokens in various form factors (like watches or jewelry) and using third-party registries for authentication into Broadcom's foundational system.

4. Key Claim Construction Positions

• "hybrid device": Petitioner argued this term should be construed to mean "a device comprising an integrated, secure memory storing local, secured information and an integrated receiver-decoder circuit." This proposed construction directly reflects the elements recited in independent claim 1. Petitioner noted this modifies a construction from a related litigation involving a patent family member because the ’289 patent's independent claims do not recite a "PDK" but rather the more generic "integrated, secure memory."
• "PDK" and "RDC": For the purposes of the inter partes review (IPR), Petitioner adopted constructions for "Personal Digital Key (PDK)" and "Receiver-decoder circuit (RDC)" that were previously adopted in a related district court case.

5. Arguments Regarding Discretionary Denial

• §325(d) (Advanced Bionics): Petitioner argued that discretionary denial under §325(d) is unwarranted because the asserted prior art (Giobbi-157, Giobbi-139, Dua, and Broadcom) was never cited or considered by the Examiner during prosecution. Therefore, the petition does not present art or arguments substantially similar to those previously presented to the Office. Petitioner asserted the claims were allowed due to the Examiner's material error in failing to consider this highly relevant, uncited prior art.
• Fintiv Factors: Petitioner argued that the Fintiv factors weigh in favor of institution. The parallel district court litigation was described as being in its very early stages, with an uncertain trial schedule due to a pending motion to transfer venue and a recently cancelled Markman hearing. Petitioner contended that the IPR would conclude well before any potential trial, and the strong merits of the petition outweigh any potential inefficiencies of parallel proceedings.

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-20 of the ’289 patent as unpatentable.