PTAB

PGR2023-00012

Samsung Electronics Co., Ltd. v. CardWare Inc.

Log In

1. Case Identification

2. Patent Overview

  • Title: MULTI-FUNCTION ELECTRONIC PAYMENT CARD AND DEVICE SYSTEM
  • Brief Description: The ’286 patent describes a payment system where a computing device (e.g., a smartphone) interacts with a payment card that is free of visible fixed payment numbers. The system is capable of generating limited-use or dynamic payment information for conducting secure transactions.

3. Grounds for Unpatentability

Ground 1A: Obviousness over Core References - Claims 1, 2, 7-10, 12-16, and 18 are obvious over Smith in view of Kobylkin and Gomez.

  • Prior Art Relied Upon: Smith (Application # 2013/0232083), Kobylkin (Application # 2013/0166441), and Gomez (Patent 9,600,808).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Smith taught the foundational payment system, including a mobile computing device with a processor, memory, wireless interface, and touch-screen that initiates transactions using a mobile cloud account number (MCA) instead of a real card number. Kobylkin was argued to teach a "substantially blank" disposable payment card, meeting the limitation of a card free of visible payment numbers. Gomez was cited for teaching security enhancements, such as generating an authentication cryptogram for each transaction based on a sequence counter, and only after the user provides a credential like a PIN or fingerprint.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Smith with Kobylkin to enhance the security of Smith's mobile payment system by using a physical card that does not display confidential information, reducing fraud risk from visual inspection. A POSITA would further integrate Gomez's teachings into the Smith/Kobylkin system to add another layer of security, preventing fraudulent use of a stolen mobile device and re-use of intercepted transaction data by requiring user authentication and using transaction-specific cryptograms.
    • Expectation of Success: Petitioner argued that a POSITA would have a reasonable expectation of success, as the references describe compatible technologies (mobile payment systems, secure cards, and cryptogram generation) and combining them involved applying known techniques to improve a known system for predictable results.

Ground 1B: Obviousness over Core References plus Saarisalo - Claim 3 is obvious over Smith in view of Kobylkin, Gomez, and Saarisalo.

  • Prior Art Relied Upon: Smith (Application # 2013/0232083), Kobylkin (Application # 2013/0166441), Gomez (Patent 9,600,808), and Saarisalo (Application # 2009/0291634).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon Ground 1A, adding Saarisalo to teach the limitations of claim 3. Petitioner argued that Saarisalo disclosed an NFC-enabled mobile device with a user interface that allows a user to enable and disable "card emulation" (i.e., NFC payment transactions).
    • Motivation to Combine: A POSITA would be motivated to add Saarisalo’s functionality to the base combination to provide the user with greater control over the device's security, such as disabling NFC functions when not in use to prevent unauthorized "skimming."

Ground 1C: Obviousness over Core References plus Saarisalo and Slonecker - Claim 4 is obvious over Smith in view of Kobylkin, Gomez, Saarisalo, and Slonecker.

  • Prior Art Relied Upon: Smith, Kobylkin, Gomez, Saarisalo, and Slonecker (Application # 2007/0045403).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground built upon Ground 1B, adding Slonecker to teach the limitations of claim 4. Petitioner asserted that Slonecker taught a system where a user can repeatedly lock and unlock a financial account card via a user interface, with transactions being denied when the card is locked.
    • Motivation to Combine: A POSITA would be motivated to incorporate Slonecker’s teachings to provide users with an additional, intuitive security feature, allowing them to immediately lock an account upon noticing suspicious activity, thereby reducing fraudulent transactions.

  • Additional Grounds: Petitioner asserted additional obviousness challenges based on the core Smith, Kobylkin, and Gomez combination, augmented with other references to meet specific dependent claim limitations. These included combinations with Mestre (for offline-only mode and user transaction approval), Sahota (for specific dynamic cryptogram generation methods), Moosavi (for adding an NFC logo to a device), and Mullen (for communicating transaction authorization status back to the mobile device).

4. Key Claim Construction Positions

  • Petitioner argued that several claim limitations should be given no patentable weight under the "printed matter" doctrine. These limitations, found in claims 1, 5, 15, 19, and 20, describe the absence or presence of information on the payment card (e.g., "free of any fixed payment numbers visible thereon"). Petitioner contended this information has no functional or structural relationship to the substrate (the card itself) and therefore cannot distinguish the invention from the prior art.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under §314(a) and the Fintiv factors would be inappropriate. The petition was filed early in a parallel district court litigation, before significant investment by the parties or the court. The projected trial date in the parallel case is May 2024, while a Final Written Decision (FWD) in the Post-Grant Review (PGR) is anticipated around July 2024, suggesting the PTAB could resolve validity issues with similar or greater efficiency than the district court. Petitioner also stipulated that, if the PGR is instituted, it will not pursue the same invalidity grounds in the district court, eliminating concerns of duplicative efforts and weighing against denial.

6. Relief Requested

  • Petitioner requests institution of a Post-Grant Review and cancellation of claims 1-27 of the ’286 patent as unpatentable.