Apple Inc v. Proxense LLC

1. Case Identification

• Case #: IPR2025-00600
• Patent #: 10,698,989
• Filed: March 18, 2025
• Petitioner(s): Apple Inc.
• Patent Owner(s): Proxense, LLC
• Challenged Claims: 1-9

2. Patent Overview

• Title: Biometric Personal Data Key (PDK) Authentication
• Brief Description: The ’989 patent discloses a method, smartphone, and system for conducting secure transactions. The system involves a smartphone persistently storing a user’s biometric data and a unique identification (ID) code received from a third-party trusted authority; upon successful local verification of the user’s biometric scan, the smartphone wirelessly sends the ID code to the trusted authority for final authentication to complete a transaction.

3. Grounds for Unpatentability

Ground 1: Claims 1-9 are obvious over Ludtke in view of Baird

• Prior Art Relied Upon: Ludtke (Patent 7,188,110) and Baird (Application # 2006/0075230).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Ludtke disclosed the core functionality of the challenged claims. Ludtke taught a portable "transaction device" (e.g., a "privacy card") that stores a user's fingerprint data and a unique device ID. To perform a transaction, the user provides a fingerprint scan; if it matches the stored data, the device sends its unique ID to a "transaction processing clearing house" (TPCH)—a trusted third party—for authentication and transaction approval. Petitioner contended that Baird supplied the missing teaching of implementing this functionality on a "smartphone." Baird disclosed a smartphone equipped with a biometric input device, such as a fingerprint reader, for authenticating a user to access network resources.
  • Motivation to Combine: Petitioner asserted that a person of ordinary skill in the art (POSITA) would combine these references to enhance user convenience. Ludtke suggested its transaction device could be used in proximity to a cell phone, making it obvious to integrate the two to reduce the number of devices a user must carry. Baird provided the known technical solution of incorporating biometric authentication directly into a smartphone. This combination represented a predictable design choice to create a more portable and integrated user authentication device.
  • Expectation of Success: A POSITA would have had a reasonable expectation of success because both references operate in the same field of biometric authentication for secure transactions and utilize overlapping, well-understood hardware components (e.g., fingerprint scanners, persistent memory, wireless transceivers). Modifying Baird's smartphone to incorporate Ludtke's transaction system would have involved routine software and hardware integration.

Ground 2: Claims 1-9 are obvious over Burger in view of Baird

• Prior Art Relied Upon: Burger (Application # 2005/0050367) and Baird (Application # 2006/0075230).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Burger, like Ludtke, disclosed the fundamental authentication method. Burger taught a handheld "Pocket Vault" device that stores authentication information, including user fingerprints and a unique chip ID. After a successful fingerprint scan, the Pocket Vault wirelessly transmits its encrypted chip ID to a network server (a trusted third party) for authorization to conduct financial transactions. As in Ground 1, Petitioner relied on Baird to teach the implementation of such a system on a smartphone.
  • Motivation to Combine: Petitioner contended that a POSITA would have been motivated to combine Burger and Baird to overcome the inconveniences in Burger's system. Burger’s Pocket Vault required interfacing with a separate personal docking station to perform certain network tasks, such as downloading financial data. A POSITA would recognize the advantage of integrating the Pocket Vault’s features into Baird’s self-contained smartphone, thereby eliminating the need for a separate docking station and improving the system's overall portability and ease of use.
  • Expectation of Success: The combination would have been successful and predictable. Both Burger's Pocket Vault and Baird's smartphone were described with similar and complementary hardware (controllers, memory, transceivers, biometric scanners). A POSITA would have understood that incorporating Burger's secure authentication logic into Baird's smartphone platform was a straightforward integration of known elements to achieve a predictable result.

4. Key Claim Construction Positions

• Petitioner argued that no claim terms required explicit construction beyond their plain and ordinary meaning.
• However, Petitioner noted the Board previously construed the key term "third-party trusted authority" in a related matter to mean "a trusted authority that is an entity separate from the parties to a transaction." Petitioner asserted that both Ludtke's TPCH and Burger's network server met this construction, as they were described as being distinct from the user/device and the vendor/retailer involved in the transaction.

5. Arguments Regarding Discretionary Denial

• §325(d) Denial: Petitioner argued denial would be improper because the prior art asserted in the petition (Ludtke, Baird, and Burger) was not considered during the original prosecution of the ’989 patent. Petitioner contended the new art and combinations were not cumulative to the art previously before the examiner.
• Discretionary Denial under Fintiv: Petitioner argued that the Fintiv factors weighed in favor of institution. The median time to trial in the parallel district court litigation (W.D. Tex.) would place the trial well after the statutory deadline for a Final Written Decision in the inter partes review (IPR). Furthermore, the litigation was in its early stages with minimal investment, and Petitioner stipulated that it would not pursue the same invalidity grounds in district court for any claim on which IPR is instituted.

6. Relief Requested

• Petitioner requested institution of an IPR and cancellation of claims 1-9 of the ’989 patent as unpatentable under 35 U.S.C. §103.