Apple Inc v. CardWare Inc

1. Case Identification

• Case #: IPR2025-01145
• Patent #: 10,339,520
• Filed: June 24, 2025
• Petitioner(s): Apple Inc.
• Patent Owner(s): Cardware Inc.
• Challenged Claims: 1-17

2. Patent Overview

• Title: Electronic Payment Card
• Brief Description: The ’520 patent describes an electronic payment card or device capable of generating a "limited-duration number" for use in a financial transaction to enhance security. The device can communicate via near-field communication (NFC) and is intended to emulate the behavior of a traditional credit card.

3. Grounds for Unpatentability

Ground 1: Claims 10-13 are obvious over Toomer, Grigg, and Hammad

• Prior Art Relied Upon: Toomer (Application # 2009/0210308), Grigg (Application # 2014/0006276), and Hammad (Patent 7,740,168).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Toomer taught a mobile device with a wallet application for financial transactions, including storing and generating payment credentials. To satisfy the limitation of user input on a touch screen, Petitioner combined Toomer with Grigg, which taught a mobile payment application where a user inputs credit card information. For limitations related to generating a one-time limited-use number, Petitioner introduced Hammad, which taught dynamically generating a card verification value (dCVV) for each transaction using static and dynamic data elements (e.g., account number, transaction amount, time, sequence counter).
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Toomer and Grigg to provide the convenience of initializing and adding payment accounts directly on the mobile device, a predictable improvement. A POSITA would have been motivated to incorporate Hammad’s dynamic security code generation into the Toomer/Grigg system to increase transaction security, a known problem in the field of contactless payments. Using a dynamic number prevents fraud if transaction data is intercepted.
  • Expectation of Success: Petitioner asserted a POSITA would have a reasonable expectation of success because combining a user-input feature (Grigg) with a mobile wallet (Toomer) was a well-known and conventional practice. Similarly, integrating dynamic security code generation (Hammad) into a mobile payment system was a straightforward software modification to enhance a known security weakness.

Ground 2: Claims 14-17 are obvious over Toomer, Grigg, Hammad, Mullen '449, and Lin

• Prior Art Relied Upon: Toomer, Grigg, Hammad, plus Mullen '449 (Application # 2012/0290449) and Lin (WO 2010/039337).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground built upon the combination in Ground 1 to address dependent claims 14-17, which require rendering payment methods on a display with iconography and selecting a default payment method. Petitioner argued Toomer taught a user interface on a display for selecting payment vehicles. Mullen '449 was added because it explicitly taught displaying a mobile wallet with virtual representations of payment cards, including images, cardholder names, bank logos, and partial account numbers. Lin was added to teach selecting a "user-specified preferred or default payment account" from a list on the device's screen.
  • Motivation to Combine: A POSITA would combine Mullen '449's graphical interface with the base system to enhance the user experience, making it easier for users to identify and select from multiple stored payment methods. Adding Lin’s default payment option was argued to be a simple, obvious improvement for user convenience, increasing the speed of transactions by eliminating the need to select a card for every purchase.
  • Expectation of Success: Given that graphical user interfaces for mobile wallets (Mullen '449) and setting default applications/accounts (Lin) were conventional features on mobile devices at the time, a POSITA would have had a high expectation of success in implementing these features.

Ground 3: Claims 1, 4-6, and 8-9 are obvious over Toomer, Casey, Grigg, and Hammad

• Prior Art Relied Upon: Toomer, Grigg, Hammad, plus Casey (Patent 8,255,323).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground challenged independent device claim 1 and its dependents. Petitioner relied on Toomer for the core electronic device with an NFC unit, display, memory, and processor. To meet the "motion rate detection array" limitation of claim 1(d), Petitioner introduced Casey, which taught a mobile device with a motion sensing device (e.g., an accelerometer array) to confirm or deny transactions based on user gestures. Casey also taught user inputs like a PIN or gestures to confirm/deny transactions, mapping to claim 4. The teachings of Grigg and Hammad were incorporated for the same reasons as in Ground 1.
  • Motivation to Combine: A POSITA would be motivated to include Casey's motion-sensing capabilities in Toomer's device to provide an alternative, convenient method for transaction confirmation, enhancing the user experience. Adding PIN or gesture confirmation from Casey was argued to be a known method for increasing security, yielding the predictable result of a more secure payment device.
  • Expectation of Success: Petitioner argued that incorporating motion sensors into mobile devices was common at the time of the invention, and using gestures for user input was a known design choice. Therefore, a POSITA would have reasonably expected success in adding this functionality to a mobile wallet application.

• Additional Grounds: Petitioner asserted additional obviousness challenges for claim 7 over Toomer, Grigg, Hammad, Casey, and Lin; claims 1-2 over Toomer, Grigg, Hammad, and Mullen '760 (WO 2009/082760); and claim 3 over the previous combination plus Griffin (Application # 2011/0070826). These grounds primarily added single references to address narrow, specific claim limitations related to displaying transaction information and specific components of the motion rate detection array.

4. Relief Requested

• Petitioner requests the institution of an inter partes review and the cancellation of claims 1-17 of Patent 10,339,520 as unpatentable under 35 U.S.C. §103.