PTAB

IPR2025-01151

Apple Inc v. CardWare Inc

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Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Electronic Payment Card System
  • Brief Description: The ’286 patent describes a secure electronic payment system involving a payment card and a computing device. The system generates a limited-duration credit card number for a predetermined number of authorized transactions, aiming to reduce opportunities for theft or compromise of payment credentials.

3. Grounds for Unpatentability

Ground 1: Obviousness over Collinge and Bona - Claims 15 and 17-18 are obvious over Collinge in view of Bona.

  • Prior Art Relied Upon: Collinge (Application # 2013/0262317) and Bona (Application # 2011/0140841).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Collinge taught a mobile payment system for generating and provisioning payment credentials, including single-use cryptograms, to a mobile device for NFC transactions. Bona taught an NFC-enabled companion payment card device that could be free of any fixed, visible payment numbers on its display when powered off, and was operable with traditional card readers like magnetic stripe readers.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Collinge's mobile payment system with Bona's physical companion card to provide payment flexibility. This combination would allow a user to make contactless payments via the mobile device where available, while also enabling payments at the vast number of point-of-sale terminals that, at the time, still only accepted a physical magstripe card.
    • Expectation of Success: A POSITA would have a reasonable expectation of success as both references were designed with reference to well-known industry standards (e.g., NFC, magstripe) and their teachings were compatible. Collinge already taught sending payment credentials via NFC, and Bona taught receiving them on a companion card via NFC.

Ground 2: Obviousness over Collinge, Bona, and Smith - Claims 1, 5, 8, 11, 14, and 20-27 are obvious over Collinge in view of Bona and Smith.

  • Prior Art Relied Upon: Collinge (Application # 2013/0262317), Bona (Application # 2011/0140841), and Smith (Application # 2010/0125508).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground builds on the Collinge and Bona combination by adding the teachings of Smith. Smith, also assigned to MasterCard like Collinge, taught replacing a traditional Primary Account Number (PAN) with a device-specific account number (a mobile PAN or PPAN). This PPAN is a static, alternative number mapped to the actual PAN but stored on the mobile device instead of the actual PAN.
    • Motivation to Combine: A POSITA would be motivated to incorporate Smith's PPAN into the Collinge system to increase security. Collinge's system, which taught use on a mobile device lacking a secure element, would be vulnerable if the sensitive PAN were stored on it. Replacing the PAN with Smith's PPAN would mitigate risk, as a lost or stolen device would only expose the PPAN, not the underlying account PAN. This was a known technique to enhance security.
    • Expectation of Success: A POSITA would expect success because Collinge already taught using a Virtual PAN as an alternative, and both Collinge and Smith discussed payment systems relying on MasterCard PayPass functionalities. Substituting one known type of account identifier (PAN) for another known, more secure alternative (PPAN) would be a predictable modification yielding the expected result of increased security.

Ground 3: Obviousness over Collinge, Bona, Smith, and Patterson - Claims 2-4 are obvious over Collinge in view of Bona, Smith, and Patterson.

  • Prior Art Relied Upon: Collinge (Application # 2013/0262317), Bona (Application # 2011/0140841), Smith (Application # 2010/0125508), and Patterson (Patent 8,103,588).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground adds Patterson's teachings to the base combination. Patterson taught a system where a user could specify "blocking criteria" for a payment account via a user interface, such as on a wireless phone. These criteria could include marking a card as "lost or stolen," setting spending limits, or restricting transactions by channel (e.g., e-commerce) or terminal ID, causing the issuer to deny transactions that meet the criteria.
    • Motivation to Combine: A POSITA would modify the base payment system to include Patterson's user-defined blocking criteria to provide enhanced, user-configurable security. Collinge already suggested high-level control limits, and Patterson provided a detailed implementation. This would predictably improve the system by allowing users to prevent overspending, reduce fraud, or temporarily lock a misplaced card.
    • Expectation of Success: A POSITA would have a reasonable expectation of success in integrating these features, as it involved combining known prior art elements (a mobile payment system and user-defined transaction controls) to achieve the predictable result of increased security and user control.

  • Additional Grounds: Petitioner asserted additional obviousness challenges based on the core combination of Collinge, Bona, and Smith in view of other references to teach specific features, including: Lin (for device-to-device transactions), Kranzley (for visual display of payment info), Eng (for displaying fixed cardholder information), Chin (for gesture-based authentication), Fisher (for online transactions), and Hammad (for using additional data elements in cryptogram generation).

4. Key Claim Construction Positions

  • Petitioner argued that several claim limitations are directed to non-functional printed matter and should be afforded no patentable weight under the printed matter doctrine.
  • Key examples cited include limitations such as "free of any fixed payment numbers visible thereon" (claim 1), "absent a payment number information necessary for completing an online transaction" (claim 5), and "free of any depictions of fixed payment numbers thereon" (claim 20). Petitioner contended these limitations describe the content of information on the claimed device without imparting any structural or functional distinction over the prior art.

5. Arguments Regarding Discretionary Denial

  • Petitioner reserved the right to address in further briefing any discretionary denial issues that may be raised by the Patent Owner. This reservation was made pursuant to the USPTO's Interim Process Concerning Institution published in March 2025.

6. Relief Requested

  • Petitioner requested the institution of an inter partes review and the cancellation of claims 1-27 of the ’286 patent as unpatentable.