KioSoft Technologies LLC v. PayRange Inc

1. Case Identification

• Case #: PGR2021-00084
• Patent #: 10,891,608
• Filed: May 27, 2021
• Petitioner(s): KioSoft Technologies, LLC and TechTrex, Inc.
• Patent Owner(s): PayRange, Inc.
• Challenged Claims: 1-20

2. Patent Overview

• Title: Method and System for Offline-Payment Operated Machine to Accept Electronic Payments
• Brief Description: The ’608 patent discloses systems and methods for retrofitting conventional, offline, coin-operated machines (e.g., vending machines) with a payment module. This module allows the machines to accept electronic payments from a mobile device via a short-range wireless connection.

3. Grounds for Unpatentability

Ground 1: Invalidity under 35 U.S.C. §112 - Claims 1-20 are invalid under §112

• Core Argument for this Ground:
  • Lack of Written Description (§112(a)): Petitioner argued that claims 19-20 lack written description because the specification contradicts the claim language. Specifically, claim 19 requires a "second interface module" to count electrical pulses from a coin switch, but the specification and figures describe the "first interface module" performing this function, while the second module samples control signals from the control unit.
  • Indefiniteness (§112(b)): Petitioner argued that claims 1-20 are indefinite because terms like "first interface module" and "second interface module" are used as generic, non-structural placeholders defined only by their function. Petitioner asserted these terms are means-plus-function limitations under §112(f) for which the specification fails to disclose any corresponding structure, rendering them indefinite.
  • Improper Dependent Claims (§112(d)): Petitioner argued that claims 5, 11, and 17 are invalid because they fail to further limit the independent claims from which they depend. The independent claims already recite an "offline" machine, and these dependent claims add the redundant limitation that the machine "is not connected to any networks."

Ground 2: Anticipation by Breitenbach - Claims 1-20 are anticipated by Breitenbach under §102(a)

• Prior Art Relied Upon: Breitenbach (Patent 9,092,768).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner asserted that Breitenbach, which was not considered during prosecution, discloses every limitation of claims 1-20. Breitenbach describes a retrofit payment module for "standard" coin-operated vending machines to enable cashless sales via smartphones. The module includes a short-range wireless transceiver, processors, and memory. It is configured to interface with the machine's Vending Machine Controller (VMC) and emulate "coin-in" electrical pulses to "fool" the VMC into initiating a vend, thereby performing a cashless operation. Petitioner provided a detailed, element-by-element mapping showing that Breitenbach's disclosure of storing payment parameters, receiving wireless requests, determining the number of pulses to send, and sending post-transaction information meets all limitations of the challenged claims.

Ground 3: Obviousness over Breitenbach and Yung - Claims 1-20 are obvious over Breitenbach in view of Yung under §103

• Prior Art Relied Upon: Breitenbach (Patent 9,092,768) and Yung (Patent 7,110,954).

• Core Argument for this Ground:

  • Prior Art Mapping: Petitioner argued that while Breitenbach discloses all elements of the claims, Yung provides additional detail on specific hardware implementations that a Person of Ordinary Skill in the Art (POSITA) would have found obvious to incorporate. Yung discloses an electronic payment module with a coin-detection-and-simulation-interface (CDS) circuit. This circuit explicitly addresses the scenario of managing simultaneous coin-based and electronic transactions by disabling electronic payment when a cash operation is active.
  • Motivation to Combine: A POSITA would combine Breitenbach's general system with Yung's specific CDS circuit to solve a known problem not explicitly addressed by Breitenbach: preventing conflicts when one user inserts coins while another attempts a cashless transaction on the same machine. This combination would be a predictable solution to improve the robustness of Breitenbach's system.
  • Expectation of Success: A POSITA would have a reasonable expectation of success in integrating Yung's well-understood circuit design into Breitenbach's retrofit module, as both references operate in the same technical field of retrofitting vending machines for electronic payments.

• Additional Grounds: Petitioner asserted an additional obviousness challenge against claims 1-20 over Breitenbach in view of Cole (Patent 6,743,095). Cole teaches an intelligent metering system to accurately and securely track coin deposits, which Petitioner argued a POSITA would have been motivated to add to Breitenbach’s system to prevent tampering in remote, offline locations.

4. Key Claim Construction Positions

• "offline payment-operated machine": Petitioner proposed this term be construed to mean "a machine that is not connected to any network and that accepts cash to perform an operation, wherein the machine includes a coin receiving switch that generates an analog signal in response to insertion of a single coin." This construction is central to the §112(d) argument that certain dependent claims are redundant.
• "interface": Petitioner proposed this term be construed to mean "a place at which two or more systems connect to facilitate communication." This construction supports the argument that "interface module" is a generic term lacking sufficient structure, invoking means-plus-function analysis for the indefiniteness challenge.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that the Board should not exercise discretionary denial under §324(a) or §325(d). Regarding the Fintiv factors, Petitioner asserted that the parallel district court litigation is at a very early stage, with no claim construction or significant discovery completed. Furthermore, Petitioner stipulated that, if review is instituted, it will not pursue the same grounds or prior art in the district court, eliminating any overlap and concerns of inefficiency. Petitioner also argued that the prior art references (Breitenbach, Yung, and Cole) were not before the examiner during prosecution, and the petition presents strong evidence of unpatentability, weighing heavily in favor of institution.

6. Relief Requested

• Petitioner requests institution of a Post-Grant Review and cancellation of claims 1-20 of the ’608 patent as unpatentable.