PTAB

IPR2025-01147

Apple Inc v. CardWare Inc

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Electronic Payment Systems and Devices
  • Brief Description: The ’820 patent describes an electronic payment card or system designed to enhance security for financial transactions. The core technology involves generating a limited-duration or limited-use credit card number that is valid for a predetermined number of authorized transactions, thereby reducing the risk of theft or compromise of payment credentials.

3. Grounds for Unpatentability

Ground 1: Obviousness over Walker and Brown - Claims 1, 8, and 10 are obvious over Walker in view of Brown.

  • Prior Art Relied Upon: Walker (Application # 2006/0122931) and Brown (Application # 2007/0208671).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Walker teaches the core elements of a payment device that generates a single-use credit card number using a memory and a cryptographic processor. This device is activated by a PIN or biometric input and generates a limited-use number based on an incrementing transaction sequence count. Petitioner asserted that Brown teaches supplementary features, including a smart card with a "thin shaped body" (1mm thick), a dynamic magnetic stripe, and a wireless/NFC interface for communicating with conventional point-of-sale (POS) terminals. Brown also discloses a variable personal account number (PAN) displayed on the card, teaching a device without fixed payment numbers.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Brown's conventional physical form factor and communication interfaces with Walker's secure number generation. The motivation was to create a secure payment device that would be compatible with the ubiquitous magnetic stripe and NFC payment infrastructure and conform to consumer expectations for payment card dimensions, thereby facilitating market adoption.
    • Expectation of Success: A POSITA would have a reasonable expectation of success, as integrating known, standardized interfaces like a magnetic stripe or NFC chip into a smart card containing a processor was a well-understood and predictable design choice.

Ground 2: Obviousness over Walker, Brown, and Gauthier - Claims 4-7 and 9 are obvious over Walker, Brown, and Gauthier.

  • Prior Art Relied Upon: Walker (Application # 2006/0122931), Brown (Application # 2007/0208671), and Gauthier (Application # 2007/0055630).
  • Core Argument for this Ground:
    • Prior Art Mapping: Building on the Walker/Brown combination, Petitioner introduced Gauthier to teach enhanced security for wireless transactions. Gauthier discloses a secured account number used only for wireless transactions, which is different from the user's primary account number. Critically, if this secured number is intercepted and used in a card-not-present transaction (e.g., online), the card processing authority rejects it as invalid, preventing fraud. This maps to the claims requiring rejection of limited-use information when used improperly.
    • Motivation to Combine: The motivation was to increase the security of the Walker/Brown device. A POSITA would recognize that a single-use number, if intercepted during an NFC transaction, might still be vulnerable to fraudulent use online. Gauthier provides a solution by making the number's validity dependent on the transaction context (card-present vs. card-not-present), which would be a desirable and logical security enhancement.
    • Expectation of Success: Success would be expected, as the modification involves changing the logic of payment authorization based on transaction type, a known concept in the art, rather than requiring complex hardware integration.

Ground 3: Obviousness over Collinge, Kranzley, and Brown - Claims 11, 13-15, and 17-20 are obvious over Collinge, Kranzley, and Brown.

  • Prior Art Relied Upon: Collinge (Application # 2013/0262317), Kranzley (Application # 2010/0125509), and Brown (Application # 2007/0208671).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground addresses the "online payment system" claims. Petitioner argued that Collinge teaches a mobile payment system where a computing device (e.g., a smartphone) is provisioned with payment credentials to generate a single-use payment cryptogram for NFC transactions. Collinge, however, does not explicitly detail use for online e-commerce. Kranzley was introduced to supply this missing element, teaching a mobile payment application that displays a virtual payment account number (VPAN) and a dynamic code on the device's screen specifically for completing online transactions. Brown was cited for its teaching of a physical, thin-card device with no fixed numbers, which could be part of the overall system.
    • Motivation to Combine: A POSITA would combine the teachings to provide a more versatile payment system. The motivation was to extend the functionality of Collinge's secure NFC payment application to also support the large and growing e-commerce market, as taught by Kranzley. This would provide the user with a single, secure mobile wallet for both in-person and online purchases.
    • Expectation of Success: A POSITA would expect success because the combination primarily involves a software modification—displaying credentials already generated by the system on the device's screen—which is a predictable application of known user interface techniques.

  • Additional Grounds: Petitioner asserted additional obviousness challenges, including grounds combining Walker/Brown with Eng for adding printed indicia like logos (Claim 2), and with Patel for adding a dynamic CVV to a magnetic stripe (Claim 3).

4. Key Claim Construction Positions

  • Petitioner argued that several claim limitations directed to "printed matter" should be afforded no patentable weight. Specifically, terms such as "having no fixed payment numbers disposed thereon" and "bears only: the cardholders name; a brand logo..." were contended to lack a structural and functional relationship with the underlying substrate (the payment device). Petitioner asserted that these limitations describe only the content of information printed on the device and thus do not distinguish the claimed invention from the prior art.

5. Relief Requested

  • Petitioner requests institution of an inter partes review and cancellation of claims 1-20 of the ’820 patent as unpatentable.