PTAB

IPR2025-01235

Apple Inc v. Telcom Ventures LLC

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Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Adaptive Enablement of Communications Modes
  • Brief Description: The ’432 patent describes systems and methods for adaptively enabling functions on a mobile device based on satisfying a proximity criterion and sensing a physiological parameter. The challenged claims are directed to methods of using a smartphone for financial transactions, where a payment mode is enabled after detecting user proximity to an entity and sensing a physiological parameter.

3. Grounds for Unpatentability

Ground 1: Obviousness with Broad Interpretation - Claims 1-3, 5-6, and 10-15 are obvious over Carlson in view of Holloway and ISO-14443.

  • Prior Art Relied Upon: Carlson (Patent 8,229,852), Holloway (WO 02/49322), and ISO-14443 (an international standard).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Carlson taught the core method of conducting a secure financial transaction using a mobile device with two different communication modes: a long-range cellular link to a payment network to get a temporary account number (a PPAI), and a short-range NFC link to a point-of-sale (POS) terminal to complete the transaction. While Carlson mentioned using a fingerprint to unlock the device, it lacked implementation details. Holloway allegedly supplied this missing detail, teaching a mobile phone with an integrated fingerprint scanner for biometric authentication to enable transactions. Finally, Carlson suggested using the ISO-14443 standard for its NFC communication, and Petitioner asserted that the ISO-14443 document itself provided the low-level protocol details for establishing a short-range link based on proximity.
    • Motivation to Combine: A POSITA would combine Carlson with Holloway to implement the fingerprint unlocking feature contemplated by Carlson. Holloway provided a well-known, low-cost, and secure method for biometric authentication on a mobile device. A POSITA would have been motivated to consult the ISO-14443 standard because Carlson expressly referenced it, and it provided a standardized, efficient, and secure protocol for the short-range NFC transaction, reducing power consumption and interference risk.
    • Expectation of Success: Petitioner contended there was a high expectation of success because Holloway’s fingerprint sensor technology was mature and already manufactured in high volume. Similarly, implementing a standardized protocol like ISO-14443 for NFC communications was a routine task for a POSITA at the time.

Ground 2: Obviousness with Added Virtual Card Functionality - Claims 7-8 and 16-17 are obvious over Carlson in view of Holloway, ISO-14443, and Lin.

  • Prior Art Relied Upon: Carlson (Patent 8,229,852), Holloway (WO 02/49322), ISO-14443, and Lin (Patent 10,380,573).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon the combination in Ground 1 to address claim limitations related to adding a virtual payment card to the smartphone. Petitioner argued that while Carlson's method used a virtual card, it did not explain how the card was initially provisioned on the device. Lin allegedly taught this missing step, describing a method for a user to add credit card information to a mobile application, have it verified by the card issuer over a long-range network, and receive a verification code to authorize the virtual card for future use.
    • Motivation to Combine: A POSITA would combine Lin's teachings with the Carlson/Holloway system to address a clear design need: providing a mechanism for users to add the virtual cards that Carlson's system required for operation. Lin offered a predictable and practical solution for this necessary function.
    • Expectation of Success: Success was expected because Lin's method required only standard components (memory, processor, cellular radio) already present in Carlson's device, making the integration straightforward.

Ground 3: Obviousness with Narrow Interpretation - Claims 1-3, 5-6, and 10-15 are obvious over Carlson in view of Murakami and ISO-14443.

  • Prior Art Relied Upon: Carlson (Patent 8,229,852), Murakami (WO 01/95246), and ISO-14443.
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground presented an alternative to Ground 1, based on a narrower construction of "physiological parameter" consistent with the patent's specification (see Section 4 below). Instead of Holloway's static fingerprint sensor, this ground used Murakami to supply the biometric authentication. Petitioner asserted that Murakami taught a mobile device sensor that measured dynamic physiological parameters, such as a composite waveform reflecting blood flow, heart rate, and blood pressure, to authenticate a user and authorize a transaction. This dynamic data, Petitioner argued, directly corresponded to the examples listed in the ’432 patent.
    • Motivation to Combine: A POSITA would combine Murakami with Carlson to implement biometric authentication using a method that offered enhanced privacy and user convenience compared to fingerprints. Murakami explicitly noted that its method was less likely to raise privacy issues, did not require expensive scanning equipment, and was not subject to behavioral variability.
    • Expectation of Success: Success was reasonably expected as Murakami's sensor technology used simple, common components that could be readily integrated into a device like Carlson’s.
  • Additional Grounds: Petitioner asserted additional obviousness challenges based on the primary combinations above. These grounds added Sherman (for using WiMAX technology as the long-range air interface) and Jazayeri (for teaching specific steps of converting biometric data into a numeric value for authentication or for adding a second authentication step immediately before the transaction) to address other dependent claims.

4. Key Claim Construction Positions

  • "Physiological Parameter": This term was central to Petitioner's arguments. Petitioner presented two alternative interpretations.
    • Broad Interpretation (for Grounds 1-4): Consistent with the Patent Owner's alleged litigation position, this interpretation included static biometric data like a fingerprint. This allowed Petitioner to use prior art like Holloway, which taught fingerprint scanners.
    • Narrow Interpretation (for Grounds 5-8): Based on the ’432 patent's specification, which lists examples like blood pressure and heart rate, Petitioner argued the term should be construed to mean dynamic parameters that fluctuate over time. This interpretation supported using prior art like Murakami, which taught sensing blood flow and heart rate waveforms.

5. Relief Requested

  • Petitioner requested institution of an inter partes review and cancellation of claims 1-17 of the ’432 patent as unpatentable.