Microsoft Corp v. Proxense LLC

1. Case Identification

• Case #: IPR2024-01328
• Patent #: 9,298,905
• Filed: August 20, 2024
• Petitioner(s): Microsoft Corporation
• Patent Owner(s): Proxense, LLC
• Challenged Claims: 1-7 and 9-18

2. Patent Overview

• Title: Authentication Responsive to Biometric Verification
• Brief Description: The ’905 patent discloses methods, devices, and systems for user authentication to complete a financial transaction. The technology involves an integrated device that performs a local biometric verification of a user and, upon a successful match, wirelessly sends an ID code to a separate third-party trusted authority for final authentication.

3. Grounds for Unpatentability

Ground 1: Obviousness over Ludtke - Claims 1, 3-7, 9-10, and 12-18 are obvious over Ludtke

• Prior Art Relied Upon: Ludtke (Patent 7,188,110)
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Ludtke, filed in 2000, discloses all limitations of the challenged claims. Ludtke teaches a "biometric device" or "transaction device," such as a privacy card or digital wallet, that persistently stores authorized biometric data (fingerprint samples) and a unique device ID. When a user initiates a transaction, the device prompts for a fingerprint, compares the scanned data to the stored data, and upon a successful match, authorizes the user. Responsive to this local verification, the device ID is sent to a Transaction Privacy Clearing House (TPCH). Petitioner asserted that Ludtke's TPCH performs the role of the claimed "third-party trusted authority," as it is a centralized, secure entity, separate from the user and vendor, that receives the device ID, compares it against registered IDs, and sends back a confirmation to authorize the completion of a financial transaction. The communication, including sending the ID code and receiving the confirmation, is disclosed as occurring wirelessly.
  • Key Aspects: A central contention is that Ludtke’s TPCH is analogous to the ’905 patent’s "third-party trusted authority." Petitioner supported this by highlighting Ludtke's description of the TPCH as a secure, trusted "middleman" that is external to the primary parties of the transaction (the user's device and the vendor).

Ground 2: Obviousness over Ludtke and Kon - Claims 2 and 11 are obvious over Ludtke in view of Kon

• Prior Art Relied Upon: Ludtke (Patent 7,188,110) and Kon (Application # 2002/0046336)
• Core Argument for this Ground:
  • Prior Art Mapping: This ground asserted that the system of Ludtke would have been rendered obvious by combining it with the teachings of Kon. Claims 2 and 11 add the limitation of "registering an age verification for the user in association with the ID code." Petitioner argued that Kon explicitly teaches this feature. Kon discloses a system for creating a person identification certificate (IDC) which stores various user attributes. Specifically, Kon teaches storing a device ID in a "Subject" field and personal information, including the user's "age," in a "subject Directory Attributes" field within the same certificate, thereby associating the age verification with the ID code.
  • Motivation to Combine: Petitioner argued a person of ordinary skill in the art (POSITA) would combine Kon's age registration feature with Ludtke's biometric transaction system for predictable and beneficial results. The primary motivation would be to enhance Ludtke's system to support age-restricted transactions, such as the purchase of alcohol or access to age-limited content. Adding age as another data point for authentication was a known technique to improve security and control access to services.
  • Expectation of Success: A POSITA would have had a high expectation of success in this combination. Both references operate in the same field of user authentication for transactions, and integrating a data field for age into an existing authentication framework like Ludtke's would have been a straightforward application of known data management principles.

4. Key Claim Construction Positions

• Petitioner asserted that no claim terms require construction to resolve unpatentability. However, it noted that in prior proceedings, the Board interpreted "third-party trusted authority" to mean "a trusted authority that is an entity separate from the parties to a transaction." Petitioner contended that Ludtke's TPCH meets this construction and that the prior art also discloses features consistent with prior district court constructions of "ID Code" and "Access Message."

5. Arguments Regarding Discretionary Denial

• Fintiv Factors: Petitioner argued that discretionary denial under Fintiv is not warranted because it has presented a Sotera stipulation to the Patent Owner, agreeing not to pursue the same grounds in the parallel district court litigation if an inter partes review (IPR) is instituted.
• General Plastic Factors: Petitioner argued against denial based on a prior IPR filed by Samsung (IPR2021-01447), asserting that as a non-party to that proceeding, it should not be penalized. It stated that the grounds presented are new, the petition was filed diligently after being sued, and the merits are strong, favoring institution to improve patent quality.
• § 325(d) Factors: Petitioner asserted that denial under § 325(d) is improper because the primary references, Ludtke and Kon, were not considered during the original prosecution or in the prior Samsung IPR. While Ludtke is part of a pending ex parte reexamination, Petitioner argued that its reliance on Ludtke as a single-reference ground is a new and materially different argument than presented in the reexamination, which relies on Ludtke in combination with other references.

6. Relief Requested

• Petitioner requests institution of IPR and cancellation of claims 1-7 and 9-18 of the ’905 patent as unpatentable.